Western melon shippers feeling the increase in freight costs

“Supply’s probably been too high and I think it’s because of the freight costs,” says Jim Malanca of Westside Produce in Firebaugh, Ca. Malanca notes supply of cantaloupes and honeydew melons is moving from being sourced in the desert region to the central California area. “The freight costs have been a little higher than in previous years and when freight is higher, the delivered cost to retail makes it so that they don’t get to retail at a good price. And then not as many are purchased.”

Overall, Malanca notes the Western industry’s national distribution has not been as good as years past.

The freight costs are, of course, related to the Federal Motor Carrier Safety Administration ruling that came in at the end of last year requiring trucks to carry electronic logging devices (ELDs). “And while demand is moderate to good, it’s not been like in years past because chain stores aren’t taking the same quantities that they would have before. You can’t call it the same demand,” says Malanca.

While demand on the foodservice and cut-produce side of the business is consistent, growers like Westside are feeling the drop from retailers who are still ordering melons but generally taking less volume.

While on the East Coast, Malanca notes that Athena melons are still competing and being sourced from regions such as Georgia and the Carolinas and will move up the East Coast as summer progresses.

That puts pricing at challenging levels. “As an industry, we’re fighting to stay at break even levels of pricing,” says Malanca. “My expectations for this July aren’t good. Last July was the highest we’ve ever seen. And looking ahead, August has never been a good month. We’re all fighting to stay close to break even and we’re not doing very well.”