What I learned at the PMA

Good morning and Happy Sunday. I decided to write this in article format this week so I don't have word restraints. I am sitting in my hotel room anxiously awaiting my trip home from this year's PMA. I have been coming to these events for 30 plus years and I honestly don't remember a show that had so many vendors. It took all the show's operating hours to get from start to finish and I had to ship the floral section to get it done. The floral selection was spectacular and I would have loved to spend more time there.

OK my take away. I think avocados were the star of the show. There was so many participants large and small from different parts of the world getting on the avocado bandwagon. Avocados are definitely a growth area and it seems every country capable of growing avocados was represented and are ready to supply the demand.

In case you didn't notice protected agriculture is the way of the future in our industry and was vigorously represented .Why not? Greater yields, less pest and chemicals, and weather becomes much less of a mitigating factor. Many of the participants are in the process of major expansions in their green house footprints. Major meaning 30, 50,100 hectares expansions and this is in addition to their existing programs. My first thought was 50 hectares in greenhouses generally translates into 150 hectares of conventionally grown product, who are you going to sell it to? Which usually leads to a blank stare back to me. Now if you have the business and the customer base to sell 30%-50% more produce than you are currently selling the God bless you and you keep building and adding greenhouses and continue to prosper. Unfortunately no one stated that scenario. So that would me to believe the following. Either you are growing an abundance to either offset an unanticipated drop in your own production or you are waiting for another region to get hit with bad circumstances you can take advantage of the market shortages or you are hoping to put the competition out of business. I can only speak for myself here but I never went into a program where hoping someone did bad so I could do well. To me that is a poor business plan. Last season we saw what happened when the weather was perfect in several growing areas. We had depressed markets for months where product was sold far below production costs or had to be dumped. Another example would be the tomato suspension agreement change a few years ago when the minimum was raised to $8.30. Many growers started growing tomatoes an existing growers planted more because $8.30 minimum makes money, good money! What they failed to realize is they had to sell them. The market could not handle all the extra volume so many of the tomatoes were sent to Canada or stayed in Mexico for $1-$3 or were dumped. A much better scenario you would know what you can sell and plan your production accordingly and add a little extra for growth not visa versa.

There is a solution but it will not happen overnight. I believe when this overproduction all comes to fruition this may push major retailers to become part of the solution and start to decrease their ridiculous margins and help push volume. All it takes is one Walmart, Amazon, Supervalu, HEB etc to get the ball rolling and the rest will have to fall in line or go extinct. Today's consumers want fresh produce but the also have a budget for their food dollars. We can win the war on $.99 macaroni and cheese with what is over produced or with in season fruits and vegetables but retailers will have to stop with the 200% markups telling us they work on 40%. The economy is getting better, grocery margins are shrinking it's time to sell fresh produce the way it was meant to be sold, fresh, fast, in volume, repeat. I have written past articles addressing these issues please feel free to read and your comments are welcome.

This weeks items. Red peppers will be short in California due to seasonal decline in Central/Northern California and Coachella about 2 weeks away. The caveat here is the greenhouse production. which ,ay take the edge off of this market. I call this market higher and if you need LaRouge variety they will be short.

Cucumbers and Summer squashes and do't see anything on the horizon to take these markets higher so keep pushing.

Roma tomatoes steady as she goes at the new lower prices.

Avocados have firmed up and will be steady.

Watermelons this market will drop off significantly on increased volume and lackluster demand.

Western hard squashes have adjusted lower and should start to be able to compete with local product.

That is all I have for today, I have to catch my flight home. Have a great day.

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