Stronger supply of leafy greens from the desert region is expected in the short term. "The rains in California did hasten the transition a little bit, maybe slightly ahead of the desert being prepared for it. Though that's well behind us as we're into the heart of the Yuma, Arizona district now," says Mark Vaughan of Fresh Avenue.
Production in the Yuma district also falls in line with general West Coast leafy green production this year and even last year–that is, that plantings are down and more open ground not in production "Last year Yuma was below expectation–the numbers from the seed suppliers vary from five to 15 percent down," says Vaughan. "It's about the same this year for lettuce varieties. There was another drop over what they've historically seen over the past 10-year average. Over the past two seasons, leafy greens plantings might be down between 10 and 18 percent, depending on the variety and the grower."
Plantings are down not only due to escalating production costs but the fact that generally leafy greens have been a challenging market for growers to make money in. Growers these days are also more risk adverse.
At the same time, there are other districts such as Florida and the East Coast that still have some lettuce production at this time of year. However, they have been impacted by weather which has affected the quality of the product. "Yields generally have also been lower than expected in both the Western U.S. and the regional deals," says Vaughan.
© Fresh Avenue
December demand for leafy greens
On top of this, this time of year is also when demand slows generally for leafy greens–not only do shopping habits change around the holidays, but institutions such as schools also have less demand for leafy greens right now.
All of this has resulted in recent higher markets on leafy greens. "Maybe we finally did reach the bottom where the supply is starting to impact price," he says. "It's been fairly robust price-wise through the past three to five weeks."
However pricing is coming down this week and they're expected to not be as strong into January–another slower month for leafy green demand. "So in the near term, I'm expecting relief on pricing but the underlying causes of less acreage and regional deals not panning out are still a factor," he adds.
So while product is tight now, in the near term quite a bit of product is coming on in Yuma which is expected to continue to moderate prices. "However with planted acreage being down, if there's disease or demand spike, we're in for a kind of a roller coaster situation," adds Vaughan.
For more information:
Mark Vaughan
Fresh Avenue
Tel: + 1 (888) 373-7440
[email protected]
www.freshavenue.com
