Uneven Winter Transition Results in Hot Lettuce Market

Lack of supplies and volatility in the market have led to soaring organic lettuce prices as western shippers transition to their winter programs. As the Salinas lettuce deal limps to its conclusion, winter production is not yet ready to take over, leading to a demand-exceeds-supply situation in several items.

“On organic iceberg, the Salinas Valley is finishing up ahead of schedule and supplies are on the lighter side,” said Gabe Tegenkamp, commodity manager of iceberg lettuce for Braga Fresh Family Farms in Soledad, CA. “Although overall quality looks to be very nice, the desert is five to seven days behind schedule due to the mild weather in the region preventing product from sizing up on track. The elevated conventional market, which is short in supply and seeing light weights, has also created an increased demand for organic. We anticipate seeing markets remain active into the Thanksgiving holiday and beyond.”

Gabe Tegenkamp, Commodity Manager, Iceberg Lettuce, Braga Fresh Family Farms

“The elevated conventional market, which is short in supply and seeing light weights, has also created an increased demand for organic.” – Gabe Tegenkamp

Tegenkamp's colleague, Elisha Cope, who is Braga Fresh’s commodity manager for romaine and leaf lettuce had a similar report on romaine. “Organic romaine in the Salinas Valley is finishing roughly eight to ten days ahead of schedule, and the market is very active. To avoid gaps in supply, shippers have begun [transitioning] early to the desert, resulting in smaller yields due to smaller sizing being harvested,” she said. “Overall quality to start the season in the desert looks very nice. With the Thanksgiving pull approaching, demand will continue to increase, and the market should remain active for at least the next three to four weeks.” 

Elisha Cope, Commodity Manager, Romaine and Leaf Lettuce, Braga Fresh Family Farms

Also weighing in on the subject was Katie Tossie, organic commodity manager for Castroville, CA-based Ocean Mist Farms. She said the lack of conventional iceberg lettuce has led to the rare situation where some organic vegetable SKUs are lower priced than their conventional counterparts. “The organic iceberg market is currently cheaper than the conventional market,” she said this week. “However, availability seems to have tightened up, and the organic market will likely follow suit with increased pricing as we get closer to the [Thanksgiving] holiday pull. Romaine and leafy green volumes should remain steady through Thanksgiving, and markets look to remain active.

Katie Tossie, Organic Commodity Manager, Ocean Mist Farms

“Overall quality to start the season in the desert looks very nice. With the Thanksgiving pull approaching, demand will continue to increase, and the market should remain active for at least the next three to four weeks.” – Elisha Cope

A look at the USDA Specialty Crop Market News Division summaries for that date confirmed the price juxtaposition. Market News noted that demand exceeded supply in organic iceberg, with the FOB price in the mid-$20s. Organic romaine and the leaf items were in the low to mid-$30s. At the same time, conventional iceberg lettuce prices were all over the map, but they were mostly in the mid- to high $40s. Conventional romaine FOB prices were similar to organic in the mid-$30s.

Mark McBride, a salesperson at Coastline Family Farms in Salinas, which specializes in conventional crops, said volatility in conventional supplies due to disease issues has driven the lettuce prices sky high. “You have a very different equation every day,” he said, noting that it’s impossible to predict what the day’s harvest will bring.

Both weather and soil diseases “are playing havoc with yields,” McBride said, “We’ve seen a $50-plus market on iceberg for over a week. Now it’s bleeding into romaine.” The hot market is projected to last through Thanksgiving, with Huron production (which often fills the gap before the winter deal gets going) projected lower as less acreage was planted this season.

“You have a very different equation every day,” Mark McBride said, noting that it’s impossible to predict what the day’s harvest will bring.

McBride does not believe the conventional market price will top the organic price for very long. While conventional lettuce cannot be sold as organic, organic lettuce can be packed in a conventional carton. He indicated that if the price gap remains at or near $20, it makes sense that some organic fields will be packed as conventional to meet demand (and get a better price) in that market. That will result in pressure to hike the FOB price on organic lettuce.