Romaine market expected to rebound
Monday, December 10, 2018
The late November voluntary suspension of romaine shipments by the industry in response to consumer advisories by federal agencies is not expected to sideline demand for long, Chicago wholesalers believe.
“I might be optimistic, but I don’t see any long-term damage done to the romaine market as a commodity or as an item,” said TJ Fleming, vice president of Chicago-based Strube Celery & Vegetable Co. .
“I think John Q. Public is going to forget in the long term ... and just chalk it up to a (particular) instance,” he said.
“I don’t see a long-term effect on the commodity as a whole.”
From the time the advisory began Nov. 20 to nearly the end of November, markets were disrupted as romaine supplies were removed from the market until the Centers for Disease Control and Prevention and the Food and Drug Administration instructed suppliers to label romaine shipments by harvest date and district.
After having nothing to offer the week of Nov. 26, Fleming said romaine packed according to the new directives was expected to arrive in Chicago on Dec. 3.
The CDC and FDA advisory amplified an already tight market.
“It drove up demand and f.o.b.s on leaf lettuce got crazy pricey,” he said, noting f.o.b. levels in the $50 range.
Compared with markets in the teens and low $20s, Fleming said extremely elevated markets make it tough on everybody.
“You can’t make your margin at these numbers,” he said. “It is hard to sell lettuce for $70 per carton. “Times like this are few and far between,” he said.
Vance Jackson, owner of Vegetable Fresh Inc., Chicago, said romaine shipments will have region and date of production on their packaging.
The absence of romaine from the market caused other leafy items to trade at extremely high levels.
“Green leaf just skyrocketed in price and became it became almost not available after a few days,” he said.
“There was just very short supplies on green leaf and then everybody goes to mesclun and spinach, and then everybody was running out of those items,” he said.
Jackson said the dearth of romaine also created demand for commodities like Brussels sprouts, which were featured by some foodservice outlets.
Cold weather conditions in Western growing areas affected supplies of broccoli and cauliflower and caused prices to trade higher than $40 for cauliflower and up to $39 per carton for broccoli.
Jackson called the destruction of romaine “horrendous.”
“The thing that gets me is the effect that it has on so many innocent people, between the growers and the shippers and the distributors and people like myself and who get stuck with thousands of dollars of product that is good, and you can’t sell it because they made a knee-jerk reaction and said, ‘Stop selling it.”
Jackson said demand for romaine may come back after two to three months.
“I think everybody has basically short memories when it comes to this stuff, and I think overall, people have confidence in the supply of our products,” Jackson said.
“I think they believe that the government and everybody else has enough wherewithal to track down the problem and solve the problem before too long,” Jackson said.
Gaining perspective on the limited number of people affected by an outbreak in relation to the total population is key, he said.
“You have got 300 million people in the country, and probably at any given time, a quarter of those people might be eating whatever product is part of the outbreak,” he said.
“It’s a pretty insignificant amount of people that actually were affected by it.”