Export demand is starting to return on West Coast vegetables following the transition to Yuma, Arizona for production.
“Things are looking a lot better in terms of supplies and pricing,” says Tom Selfridge of Paramount Export Co. of vegetables such as lettuce, cauliflower and celery. “In exports, the last few months the business has been way down which was driven by high pricing. Now that pricing is coming down to more traditional levels, demand is picking up.”
That said, initial supplies in Yuma are lower, especially following the challenges in California between October-December on vegetable supplies, particularly lettuce. “People tried to make the jump as soon as they could to get away from the issues in Salinas,” he says. “We saw a bit of a holiday rush with items too so between that and people starting early there, it put pressure on supplies. That kept pricing high.”
Coming off of market highs
For Paramount Export, it focuses on exporting product to the Middle East and Asia, but also domestically to Hawaii. “We’re seeing more orders and that’s good. These are customers who haven’t had orders for the past two to three months, mostly because of pricing. We fly the majority of these items and by the time it got to market there, it was $10-$15 for a head of lettuce. You could only move so much. When the price gets that high, especially in Asia, they look to cheaper options outside the U.S.,” says Selfridge.
Couple those softening commodity prices with freight rates that are coming down in both air and ocean freight over the past few months and all of this helps make Arizona product more attractive.
That said, Selfridge notes that this year could be a tough year on commodities out of the U.S. “There is the high U.S. dollar, high costs, higher freight rates and short crops so there will be more overseas opportunities with the strong dollar. Yet, while we’re paying them in U.S. dollars, they’re paying their expenses in local currencies so we’re seeing more focus on third-country sourcing supplying our customers around the world,” he says. “It will probably swing back to the U.S. next year when we may have a better year with the dollar depreciating a little bit and crops coming back to more normal levels.”
For more information:
Tom Selfridge
Paramount Export Co.
Tel: +1 (510) 839-0150
https://www.paramountexport.net/
