Could tomato prices strengthen? That's the question following the supply that is coming out of key growing regions.
"There are only a few small areas of Florida with very limited quantities due to the effects of the freeze," says Roger Riehm of Blue Creek Produce, noting that regions such as Homestead, an area that would normally have good supply at this time of year, has very little. "They are pretty much drying up on rounds and Romas and quality has not been the best. I expect supply to stay very limited until the end of their growing season, which is June."
In turn, some Florida growers have invoked the Act of God clause due to the freeze and other weather conditions affecting plants, which includes a subsequent blossom drop.
What about Mexico? "Supply out of Mexico has been up and down," says Riehm. "As they're changing growing regions, different areas have started to come in with product."
However in areas such as Sonora, production is very sporadic. "It's been this way all year. We've had ups and downs on the tomato market for most of the year and that's continuing. Mexico has had its own weather issues and between that and viruses, it's impacted crossings from Mexico," says Riehm.
© Blue Creek Produce
Mexican market and pricing
There are a few other factors that are affecting both demand and pricing on tomatoes. For instance, there are questions around how much product the Mexican market will demand for tomatoes and in turn, that will affect availability and pricing on product coming into the U.S.
Then there's also increasing freight rates which have risen by 25 percent in the last week. "Overall, it's all been unstable and the inconsistency is making things uneasy with customers. They're wondering: do I buy? Did I buy wrong?" says Riehm.
Looking ahead, it's a very real possibility that markets will get stronger given Florida cannot supply the full marketplace. "That means there could be more demand for Mexican product and how great of a price increase we'll see will also be determined by the Mexican market," says Riehm, noting that pricing could fluctuate for between $4-$6/case in the next few weeks.
On top of that, gas and diesel pricing has increased by at least 25 percent in the last week or so and there is also tighter availability of trucks. Both factors could also lead towards stronger pricing.
Meanwhile, the war in the Middle East is also likely to increase the cost of growing inputs such as fertilizer. "It's been a strange year overall because this up and down has been this way for the last six months and nobody knows how to plan," says Riehm.
For more information:
Roger Riehm
Blue Creek Produce
Tel: +1 (630) 513-3075
[email protected]
https://bluecreekproduce.com/
