Currently, cucumbers are seeing pricing as high as $40-$44/box (supers). "Markets have reached these levels before but not in mid-February during peak production," says Tony Incaviglia, vice president of sales at GR Fresh.
The cause traces back to plantings for the winter season that began in Mexico in August and September. This was intended to produce cucumbers after the transition from summer/fall growing region to a new winter region for availability beginning in November. "Looking back at the growing conditions then, first there was a drought concern which reduced the volumes planted," he says. "Then two major storm systems hit and impacted those plantings that were early. So we began cleaning up, rebuilding shade houses, and replanting."
Then in December and into January, an abnormally cold spell hit, which hurt a lot of those plantings. Now, in February, many plantings did not produce, or at least yields have not been as projected. "Many growing partners were severely impacted. So, it has been one heck of a journey," says Incaviglia.
This has led to subsequent high pricing, which could stay until the early summer plantings happen in the next growing regions. Normally, February can be a plentiful supply month for cucumbers and pricing may run between $8-$12/box. (Though Incaviglia says generally, during this time frame, a box of nice retail-quality Supers will run $14-$16/box.) "$40 markets are only good if you have supply and demand is good—but the reason they're $40 is supply is short and inconsistent," he says.
"It's a very tough deal."
That tight supply also means retail contracts in the industry have been subject to prorated POs. "Normally, if you get caught short or yields are off, you can talk to your vertically integrated growing partners to help. However, it won't help when you have contracts in the teens, and the market is $40. It is an unsustainable proposition, which is where it's at now," says Incaviglia. "If we continue to do this for the next few months, some very difficult decisions as growers will need to be considered."
While Mexico is the predominant supplying country, cucumbers are available domestically in the southeast and by boat from Honduras.
Meanwhile, while demand is there, the market is dictating tough decisions: pay the high price and fill contract orders at huge unsustainable financial impacts and go without open market business. "There's no excess activity, no ads that you would normally have," says Incaviglia.
As for relief, it may not happen until spring when the next round of plantings comes on. "My gut tells me it's not going to turn around here anytime soon," he says. "Don't be surprised if we see $50 cucumbers here in a few days."
For more information:
Tony Incaviglia
GR Fresh
Tel.: +1 (956) 631-8135 Ext. 3
tony@grfresh.us
www.grfresh.us