Southland Vegetable Vendors Are Caught in a Cost-Price Squeeze

Southern Californians are unlikely to see dramatic produce price increases even though the wholesale costs of some vegetables have risen nearly 100% in the past few weeks.

The damage inflicted by Florida’s big freeze has been compounded by unexpected rains in Mexico to drive the market price of some fresh vegetables, such as corn, green beans, broccoli and cabbage, to nearly double their wholesale costs in mid-January.

However, competitive pressure is forcing local supermarket chains to sell a number of produce items at cost, and in some cases even at a loss, in order to maintain sales.

Indicative of the uncertain supply situation are the price fluctuations facing supermarkets. Jack Hodges, a 34-year veteran of the produce industry, said that food stores will be hit hard in the next several days. The supermarkets will be caught between increasing wholesale prices and competitive pressure to resist passing along the higher costs to consumers.

“If we raised our retail prices along with the increases we are paying, then it would be time to ‘stop the music’ because we would price ourselves out of business,” said Hodges, vice president, Ralphs Grocery Co.

One example of the upward trend in vegetable prices is seen in green beans, the wholesale costs of which have risen 50% since earlier this month yet the counter price has only gone up 24%, Hodges said.

“Cabbage, which was selling at 25 cents retail, is now at 39 cents, a 56% increase., However, our price for cabbage went up 89% in the same period.”

Winter produce supplies do not look favorable and most industry observers have written off Florida as a source of any fresh fruits or vegetables in the immediate future. The loss is fairly substantial because U.S. Department of Agriculture statistics show that, at this time of year, Florida is the nation’s primary supplier of beans, cabbage, celery, corn and tomatoes.

Florida’s demise in a number of commodities has left Mexico as virtually the only source for many produce items.

“Mexico will have the (produce) market to themselves till about mid-April,” according to Bud Linden, sales representative for Cal Fruit, a large-volume Los Angeles produce wholesaler. “Right now there are no Florida tomatoes, so for the spring, Mexico has a monopoly.”

The shortfall raises the possibility that wholesale prices for tomatoes may reach $1 a pound.

Another impacted crop is Mexican-grown fresh corn, which Linden explained increased from a wholesale price of $4 per case at the advent of Florida’s weather problems to its current $12.

Elementary economics dictate that when supplies are reduced prices are forced upward. Consequently, Florida’s misfortune has been a monetary blessing for other growing regions.

For instance, California grapefruit growers are also likely to benefit. Wholesale grapefruit prices rose from $8 per case in mid-January to their recent level of $11, according to one produce broker.

“California growers always try to ride on other peoples’ misfortunes,” said one Los Angeles area wholesaler who asked for anonymity. “(Problems elsewhere) mean automatic price increases.”

There are a number of fruits and vegetables that will not be affected by spiraling prices. Hodges said that Washington state apples, locally grown carrots, lettuce, white rose potatoes, tangerines and green onions should all be high in quality with fair prices in the coming days.

On an even brighter note is that Southern California strawberries should be in supermarkets about mid-February.

Canning Tradition--The 50th anniversary of the beer can is not a date to be celebrated by Cal Trans highway crews. Nevertheless, the Can Manfacturers Institute is heavily promoting the beer cans advent half a century ago when the Kreuger Brewing Co. of Richmond, Va., rolled out the first suds-filled metal container.

Some other memorable trivia in beer can history: 610 billion cans have been produced since 1935, the first cans weighed 3 ounces while today’s version is a mere 0.6 ounce and 52% of all beer sold comes in a can.

Nutty Bouquet--The Bronco Wine Co. has pioneered a new category in sparkling wine with its recently released CC Vineyard Almond Champagne.

The firm does not ferment or age the bubbly with a few choice roasted almonds inside the casks or bottles. Rather, the unique blend is made by simply adding almond flavoring to a sparkling blend of French Colombard and Chenin Blanc.

The almond Champagne is a little on the sweet side, and the firm recommends serving it with “plain cake.”