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Heat and cold produce hot lettuce market

Some fairly high temperatures in June were followed by lower-than-normal daily averages in early July causing California’s lettuce production to be light and prices high.

The hot weather hit in mid-June, causing some quality issues as well as lighter heads resulting in less yields by the end of the month. The market began to tighten the last week of June and on July 6, Denny Donovan, sales manager for Fresh Kist Produce LLC in Santa Maria, CA, said the wrapped lettuce market had risen to a strong $16 to $17. “With the type of demand that appears to be out there and the lack of supplies, we think it [the market] could be in the $20s by the end of the week.”

Donovan said it is a tricky business trying to predict too far out but he said lettuce supplies should remain tight at least through the week of July 11-18. It is the summertime and though coastal California temperatures were reaching into only the 60s during the first week of July that can change quickly, which could bring on slow-growing fields much quicker. Donovan said Fresh Kist, like many of the California lettuce producers, tends to cut down its summer acreage because of the regional deals that surface at this time of the year, decreasing demand for California’s production. “I don’t know what is going on with those deals but the demand for California lettuce is very strong right now.”

Again, he couldn’t predict how long the market would last but said producers tend to cut down on production through August, ramping up again after Labor Day.

Doug Classen, sales manager for The Nunes Co. in Salinas, CA, had a very similar report for production from the Salinas Valley. “The market is in the high teens,” he said on July 6. “It’s been strong for the last 10 days and we expect it to remain that way for at least the next five to 10 days.”

He said the warmer-than-usual weather reduced yields and created the spike in the market. “It’s very hard to say how long this will last. It all depends on the weather.”

Classen said the romaine market was also trending upward and cauliflower prices were similarly on the rise.

While summer usually means less demand and lower prices, the Nunes executive said that pattern has not held true for the past several years. Summer prices, he said, have been better than one might historically expect.

Also weighing in on the issue was the supply outlook newsletter published regularly by the Tanimura & Antle marketing team. Specifically discussing the outlook for lettuce for the period of July 4 through July 23, the report noted, “While quality remains strong, weights have slowly declined as a result of cooler-than-normal temperatures. Expect Northern Valley available volumes to decline as fields are pushed off due to sizing and weight concerns. High temperatures in south county have caused quality concerns along with a decline in yields. We are projecting a sharp market reaction with limited availability for non-committed volumes and increased market pricing.”

That newsletter also predicted strong demand for broccoli and cauliflower through that marketing period, noting that there are not promotable volumes at this time for broccoli and that cauliflower is “projected to be well short of plan for the next three weeks.”

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