Mexico loses 80-100% of crops to freeze, US prices to skyrocket
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By Lynn Herrmann 2/11/11
digitaljournal.com
Houston - The cold weather experienced across much of the US in early February made its way deep into Mexico and early reports estimate 80-100 percent crop losses which are having an immediate impact on prices at US grocery stores with more volatility to come.
Wholesale food suppliers have already sent notices to supermarket retailers describing the produce losses in Mexico and the impact shoppers can expect. Sysco sent out a release(pdf) this week stating the early February freeze reached as far south as Los Mochis and south of Culiacan, both located in the state of Sinaloa, along the Gulf of California. The freezing temperatures were the worst the region has seen since 1957.
According to Sysco’s notice sent out this week:
“The early reports are still coming in but most are showing losses of crops in the range of 80 to 100%. Even shade house product was hit by the extremely cold temps. It will take 7-10 days to have a clearer picture from growers and field supervisors, but these growing regions haven’t had cold like this in over half a century.”
At this time of year, Mexico is a major supplier to the US and Canada for green beans, cucumbers, squash, eggplant, asparagus, peppers and round and Roma tomatoes. Compounding the problem is the freezing cold that hit Florida in December and January.
Sysco continued with its dire report:
“Florida normally is a major supplier for these items as well but they have already been struck with severe freeze damage in December and January and up until now have had to purchase product out of Mexico to fill their commitments, that is no longer an option.”
Validating that statement, The Packer released a statement at the end of December stating:
“Freeze damage to Florida crops could increase demand for Mexican vegetables for the rest of winter, grower-shippers say.”
That December report noted Florida’s cold temperatures and crop loss but was optimistic over Mexico’s produce, even if prices were climbing. “My gut feeling tells me the Mexican deal is going to be very active,” said Ken Maples, sales manager for Plantation Produce in Mission, Texas, according to The Packer.
“Green beans in Florida were seriously hurt. Romas that are $10 or $10.95 today in 25-pound bulk, I look for it to be in the mid-teens,” Maples added.
But that was December. On Wednesday, The Packer reported that:
“Supplies of tomatoes, peppers, cucumbers and other vegetables from Mexico will be severely limited until at least March following an early February freeze.”
Wholesale prices for many crops have already begun climbing, doubling and almost tripling what they were at the beginning of February.
The Packer notes that the short-term, mid-term and long-term outlook for some crops is “devastating” and using this week’s pricing as a gauge of what is in store for consumers noted:
“On Feb. 8, the U.S. Department of Agriculture reported prices of $22.95-24.95 for two-layer cartons of 4x4, 5x5 and 5x6 vine-ripe field-grown tomatoes from Mexico, up from $6.95-9.95 the week before and $5.95-7.95 the year before.”
Jerry Wagner, sales and marketing director for Farmer’s Best, based in Nogales, AZ, said: “The end of February and the first half of March, there will be even worse shortages of product” than during the first part of February, The Packer reports.
Wagner called it “a miracle” if 20 percent of the cucumber crop survives. Yellow, green and grey squash took the biggest hit. “Some plants will come back but the vast majority is lost,” Wagner added.
Sysco called the Mexico freeze an “unprecedented disaster” and noted the volatility of the matter in its release:
“With the series of weather disasters that has occurred in both of these major growing areas we will experience immediate volatile prices, expected limited availability, and mediocre quality at best.”
Mike Alton, marketing director for Prime Time International LLC based in Coachella, CA said: “We’re in for a long, tough haul,” according to The Packer.
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