High Prices Greet Organic Vegetable Transition

As winter vegetable production from Mexico and the deserts of Arizona and California starts to wind down, weather issues continue to cause supply gaps, and prices on some organic items are reaching record levels.

“We are seeing historically high prices on some items,” said Robert Lichtenberg, director of purchasing for Earl’s Organic Produce, which is located on the San Francisco Wholesale Produce Market.  “Cauliflower and celery are as high as I have ever seen them.  Broccoli isn’t so bad, but baby broccoli is very high.”

Lichtenberg said there has been so many weather-related disruptions this winter that supplies of organic vegetable have been anything but steady. “This week is going to continue to be unsettled and we will just have to wait and see moving forward,” he said.

Organic asparagus from the Salinas Valley is currently running more than a month behind last year’s schedule because of the cold, inclement weather, Lichtenberg said. Last year, Earl’s Organics bought organic asparagus from a supplier in Gonzales, CA, on Feb. 4.  On March 5 of this year, he said the company hadn’t shipped any asparagus, and it would be later this week before he got his first load. 

Underscoring Lichtenberg comments on Monday, March 4, was the National Specialty Crop Organic Summary released by the USDA. For example, organic celery from Oxnard, CA, had a range of $55-$60 per carton, while organic cauliflower from western Arizona was listed at $42 to $46 per carton.  At the same time, organic iceberg lettuce was $16-$20, while romaine was a couple of dollars less per carton and the market price for organic leafy greens was mostly in the mid-$20s range.

From north to south, California has registered much more rain this winter than in previous years as well as more individual rainy days. The weather, of course, does not respect borders and both Arizona and Mexico have also been hit with unsettled weather.

Doug Classen, VP of Sales, The Nunes Company

Doug Classen, vice president of sales for The Nunes Company, said it has been a very difficult winter for desert supplies with freezing temperatures and rain being a common occurrence. “We’ve had ice (in the fields) many, many mornings,” he said.

And the constant rain in the Salinas Valley has disrupted planting schedules.  “The weather conditions over the past two months is causing significant challenges in supply, quality, condition, size and weights on ALL COMMODITIES,” Classen  wrote in the company’s late February “Market Update” newsletter, including the capital letter emphasis.  “Buyers and receivers should be very aware of the challenges associated with the weather conditions and how it affects all products. Expect market volatility on ALL COMMODITIES through the end of the Yuma deal and into transition.”

Lucas Rose, Salesman, D'Arrigo Bros

Lucas Rose, a salesman for D’Arrigo Bros. of California, another Salinas-based operation, said  his firm’s  transition to Salinas will start  in late March with the hardier items coming first, followed by the other vegetables.  Rose said there could be some gaps in supplies between the desert and Salinas on some crops and singled out organic rapini (broccoli rabe) as one item where there will be a gap at the end of March.

As the transition occurs from the desert to the coast and from winter to spring, the industry is looking for a less volatile situation to prevail.  Overall, there have been some strong spikes in the market price of organic vegetables but those are typically because of uncertainty in supply.  Classen agreed that it is always a balancing act trying to produce sufficient supplies for your customers, but avoiding an oversupply situation that results in underwater f.o.b. pricing.

It does not appear that “oversupply” will play a role, at least not in March.  The long-term weather forecast for the West Coast from the National Weather Service is for colder-than-normal March temperatures with greater-than-normal precipitation.