Concerns around tariffs could be impacting the demand for U.S. watermelons in Canada. "Some Canadian chain customers are hesitant to bring in U.S. fruit due to the tariffs and the overwhelming consumer discontent with the rhetoric coming from the United States. There has been a very real consumer sentiment push to "Buy Canadian", but that isn't an option with watermelons at this time of year," says Hutch Morton, senior vice president of J.E. Russell Produce Ltd.
He says if Canadian consumers want the best watermelons right now, those are coming from Florida. "Independent retailers continue using the Ontario Food Terminal to buy the best fruit available, regardless of where it comes from. That's our core customer and it is where we excel," he says. "We believe that having the best quality products at the best prices, while providing a great customer experience will always be the right way to do business."
This concern comes at a time when Canada is undergoing a national election and some Canadians are expressing concerns over the U.S. administration. "Nationalist pride has always been a badge of honor for Canadians, and we wear our colors proudly," he says, noting that the anti-U.S. sentiment is helping drive consumers away from U.S. produce items. "We are a very proud Canadian company that only serves the Canadian market. We support local growers and will always bring exciting local offerings to our customers. However, we can't pretend that Canada is a tropical island that will somehow start growing tropical fruits, or more to the point, watermelons in January. We are very lucky to have access to all categories of fresh produce year-round because of robust global supply chains. The biggest source of that fresh and healthy produce comes from the U.S. and the sooner we get back to focusing on feeding Canadian families with the best available produce, regardless of where it comes from, the better off we will be."
Pirri says the Florida growing conditions have been fantastic this year which is showing in the quality of this season's Florida crop.
Florida production underway
Meanwhile, on supply, J.E. Russell Produce has started importing South Florida watermelons given it has some early shippers that start before most farms in Florida do. "There is beautiful and excellent tasting fruit available and it's moving," says Mike Pirri, J.E. Russell Produce's category manager for melons, grapes, citrus. "With a slower start to warmer spring weather in Ontario, there has been a little less demand for watermelons, but for those looking for a taste of summer, these watermelons from South Florida really deliver. The growing conditions have been fantastic this year which is showing in the quality of this season's Florida crop."
The supply that is coming out of the region is on par with last year's supply at this time--growers are about four days behind last year's start date. Central Florida farms will also start in the next few days which is consistent with the timing from the South Florida farms.
There is also industry supply from Mexico, which is in full swing with its production. Texas will start its watermelons as Mexico winds down in a month or so.
The supply that is coming out of the region is on par with last year's supply at this time–growers are about four days behind last year's start date.
Tariffs and pricing
As for pricing, prices this year have started very similar to prices last year out of the state. "They are up maybe five percent at the beginning of the deal, but the real challenge will be the 25 percent tariffs entering Canada. When you're talking about a case of fruit or vegetable that has a low unit cost, you won't feel the impact of the tariffs as much, but on a bin of watermelons, you're adding an extra $50-$70 increase per bin," says Morton. "The reality of the produce industry is that we all operate with very thin margins and these costs simply get passed along to consumers. During watermelon season, if a consumer wants a watermelon, they will pay to satisfy that craving."
Looking ahead, while volumes will increase significantly with the Central and North Florida farms starting their crops which typically helps push the prices down a bit, significant price relief isn't expected until after July 4th. Ontario production typically starts in later July and runs until September.
For more information:
Hutch Morton
J.E. Russell Produce Ltd.
[email protected]
https://www.jerussell.ca/