The carrot market’s “perfect storm” is making carrot supplies tight.
Domestically out of Texas, the state has little to no production. “It’s extremely light. Whatever is around domestically in Texas is basically all going to processing and not entering the fresh market,” says Tony Martinez of Primo Trading Services LLC in McAllen, TX, who notes that generally Texas carrot production has continued to decrease in the past 10 to 15 years thanks to increased farming and labor costs and competing against Mexican production.
And out of Mexico? “There are big supply gaps out of all growing regions and there are a number of things happening,” he says.
Starting with what growers of virtually all commodities are seeing: increased costs. “The costs of farming have gone up as high as 45 percent over previous years and that includes land costs, fertilizer programs, spray programs and seed costs,” he says.
Sourcing seed
Accessing seeds has also been an issue. Martinez says most hybrid seed used for farming comes from Europe and Africa and dealing with ocean freight since the pandemic has been extremely difficult. Furthermore, many fertilizer and seed vendors have gone away from the conventional “Crop Terms” with growers of 90 day terms and have now implemented a “Cash Basis” terms instead. “So a lot of mom and pop growers are going away because they can’t afford to pay that up front cost,” Martinez says.
There’s also less acreage on the ground in Mexico. “In the areas we farm, the Pacific and the Gulf, right now the Gulf is out of production,” says Martinez. “We have an off-cycle crop that’s very small out of there. And we’re starting 200 acres out of the Pacific but if I look around where we’re farming, I don’t see much.”
And then there’s Canadian production which is winding down its storage crop. In turn, that influences sizing. The U.S. and Canada prefer jumbo-sized carrots while Mexico uses generally more mediums and baby-sized. But the overall pressure on carrot supplies has increased pricing and has growers beginning to harvest carrots prematurely and selling medium-sized carrots, thus making the jumbo market even tighter. Mexico has also been on the receiving end of regular cold fronts which slows down the growth of carrots.
All of this means prices, which had been fairly depressed, are going up and moving into more of spot-market pricing. “The real market right now is $11-$12 on premiums and $10-$11 on regulars and it looks like it might get tighter,” says Martinez.
That said, Martinez says Primo Trading does have carrots planted year–round out of various growing regions in Mexico which allow for steady supplies 52 weeks a year.
For more information:
Tony Martinez
Primo Trading Services LLC
Tel: +1 (956) 800-4343
[email protected]
