Obviously the freeze is bad news for many in the produce industry and we’ll be analyzing it as the situation clarifies. The key with freezes is that you can lose some crop and as long as you still have a significant amount to sell, the crop losses can be ameliorated with higher prices.
This assumes of course that no foreign producer is ready to zoom in and prevent tremendous price increases.
This is when it pays to be diversified. The Pundit wrote Diversify Sunkist? after another catastrophic freeze. If the citrus crop winds up being 50 to 75% destroyed as anticipated, Sunkist and its growers will sure be glad it has streams of income from South Africa and Australia. It might even think about opening packing sheds in China, as the Pundit has urged.
And, of course, those diversified not just geographically but by product are usually well positioned to handle such setbacks as higher retail prices for freeze-affected commodities tend to lead to reduced shelf space and less retail advertising support for affected commodities. This means, of course, that shelf space and retail promotional efforts are available for other items. Everyone hates zero sum games but sometimes that is the way it is.
One important thing in a freeze is to protect the integrity of the product in the eyes of the consumer. California Citrus Mutual made an announcement on January 14, 2007:
Most importantly, today the industry implemented a statewide consumer protection program. The inspection/shipping protocols are a joint effort with the packing houses and the county agriculture commissioners to insure that only quality citrus reaches the consumer.
This was followed by an announcement January 15, 2007:
Aside from continuing to protect the remaining crop, the industry is focusing its attention on consumers and making sure that damaged fruit does not enter distribution channels.
State and county officials have responded to industry requests to implement measures to protect the public from bad fruit.
The County Ag Commissioners in all counties where citrus is grown and/or packed have placed all fruit harvested on or after January 12, 2007 under a Disposal Order and requested that packers voluntarily hold that fruit for five days in order to determine whether it is damaged. This means that no fruit can be packed for fresh market distribution. This will assure a sufficient amount of time for the damage to show up before it is packed and moved into distribution channels.
At the direction of California State Department of Food and Agricultural all state and county inspectors throughout the state will be increasing the level of inspection throughout the distribution system and those caught attempting to move damaged fruit will be prosecuted to the full extent of the law.
Consumers can be assured that the fruit currently on supermarket shelves is fruit that was shipped prior to the freeze. The California citrus industry is committed to doing whatever is necessary to continue delivering only high quality citrus to the marketplace.
Bravo for them. It is maintaining consumer confidence in the quality of the produce that is always the key to long term success.
We asked Pundit Investigator and Special Projects Editor, Mira Slott to gather some information as to the extent of the damage:
Carolyn O’Donnell, Issues and Food Safety Manager, California Strawberry Commission, Watsonville, California
I just came out of an industry meeting about the freeze. We’re hearing some damage to crop currently in the field, some fruit and some blossoms on the plants. Damage varies depending on what crop protection measures were put in place. But there’s a caveat on this. The great thing about strawberries: they are continuously produced over several months; there is not just one blossom and one fruit for the year. The freeze happened over a couple of days, so we are waiting to better assess the damage. This is pretty much the low part of the season. It’s winter so we expect to have bumps.
If the strawberry field is ice-encased, it’s a strategic crop protection measure. When water forms ice it gives off heat. When it warms up by noon or 1:00 p.m. the plants are fresh and green.
Something very interesting came out of the meeting. Farmers realize the chill in the long run will benefit the plants, especially in northern production areas. It is an opportunity to give the plant strong root structure to support larger plants that will produce more strawberries.
Bob Blakely, Director of Grower Services, California Citrus Mutual, Exeter, California
The industry had a lot of fruit left to be harvested that froze, but it’s not a total lost. First industry estimates won’t come out until next week. Most reports are based on what individual companies are seeing in their own operations, estimates averaging 50 percent to 75 percent in losses. I’m sure the industry number will be over 50 percent.
Claire Smith, director of corporate communications, Sunkist Growers,
Overall, 70 to 75 percent of the citrus crop, the bulk of fruit that goes to the fresh market, was still on the trees in California and Arizona.
Unfortunately, we still are having more freezing temperatures in the San Joaquin Valley, the largest navel growing area.
The bulk of the navel crop is in the Central Valley, which was badly hit for long durations. In California there are so many micro climates. It is being reported that there were some pockets where it stayed warmer. There may still be some good fruit, but the industry was awfully badly hit.
We’re expecting at least 50 percent of fruit on the tree to be damaged and up to 70 percent when assessments are done. It will be a pretty massive decline.
The lemons in the Central Valley were also badly hit. One of biggest growing areas is down in Ventura. Fortunately winds kept temperatures warmer near the trees, so damage was not nearly as bad as in the Valley.
Specialty tangerines, mandarins and tangelo varieties were still on the trees too. They are a winter crop just like navels, but tend to have thinner rinds, so we expect damage there too.
The last really bad freeze was in 1998. That was very devastating, but 1990 was a killer. It took the entire crop. No one had fruit in the industry for 9 months.
Bob Martin, General Manager of Rio Farms, King City, California
We’ve lost some acres of cabbage, cauliflower and broccoli. It’s too early to tell if we’ve lost anything else. By the time it thaws out, it freezes again. We’ve held off transplanting because there’s no sense putting something in that will die. In a freeze, I’d still rather be this kind of farmer than in the avocado or citrus business.
I don’t know if there’s that much damage to leafy greens, but cabbage transplanted in the last couple of weeks — as well as broccoli, cauliflower, anything small that wasn’t established — is pretty much history. The freeze will probably affect more than just this harvest. Cold will postpone, slow down late winter/spring harvest here in Salinas Valley. Also, you’ll see differences in the desert regions, because of freezes there too.
It is creating a shortage of product right now. Desert production will come in later and finish later, and we’ll get started later. As far as the overall impact, I don’t know if we’ll see a huge impact on the pricing structure come March and April. A lot of times, we expect a major market, and it’s just not there. We end up with gluts. Rain makes more of a market. It’s a mixed bag, you’ve got less products to offer but they’re worth a heck of a lot more. Some farmers won’t have any product and some will escape damage and do well.
We started transplanting in early November. I did lose some cauliflower because we had an early 24 degree frost early December. Within the last week or two, we’re really taking it in the shorts. It’s going to shorten our supply in March and early April, but it’s a temporary situation, and we’ll recover fast. We’re continuously planting new crops. This is a chink in the armor. Extended cold will slow things down. It will create a hole in production and all of sudden a glut as the crops in the ground catch up.
The California Avocado Commission issued a press release:
The major freeze event that hit Southern California January 14-16, 2007 caused significant damage to the 2007 avocado crop, according to a press report from the California Avocado Commission (CAC).
It will be several weeks before industry experts can determine how much fruit has been damaged by the cold weather, but early reports suggest that losses could reach 10-20% of 2007’s projected 400 million pound crop.
Use of wind machines and irrigation water may have kept some avocado groves from freezing in warmer locations, but reports of damage are coming into the Commission from San Diego to California’s Central Coast.
Though the freeze caused serious damage on groves directly in its path, most of the state’s 6500 growers who farm 60,000 acres in California will be able to supply the market to meet consumer demand in 2007.
“Commitments to retailers for the high-consumption Super Bowl weekend February 4-5 will be met, though consumer prices will likely rise,” said Commission President & CEO Mark Affleck.
According to a Commission press release, CAC is working closely with government officials to do everything possible to help affected growers recover and get back into production.
Louis Ivanovich of West Lake Fresh was kind enough to send us a few photos of strawberry fields with crop protection.
We spoke with him to get a further explanation:
Louis Ivanovich, Partner, West Lake Fresh, Watsonville, California
Q: From your perspective, how is the freeze impacting the strawberry industry?
A: As a broker and merchant of strawberries for 20 years, I’ve seen occasional spotty freezes, but nothing of this magnitude since 1990. Plants have been saved, but supplies for the next five weeks are going to be very sporadic because a lot of the crop is burnt, all the way from ripe fruit to the blossom. Although there will be lighter volumes and higher FOB’s for Valentine’s Day, we are very optimistic going into March and Easter promotions. Fortunately, the industry was very successful in its protection efforts.
Q: Could you elaborate?
A: Different people use different methods. The most drastic is spraying water through open air irrigation pipes. Sprinkler heads on pipes apply a spray of water over plants to create an ice canopy to insulate plants from subfreezing temperatures that could possibly kill the plants. It broadcasts moisture in the air, coats plants and fruits, and makes a protective ice barrier.
Q: How broadly was this strategy implemented?
A: It was widely used in Orange County and Oxnard areas. It depends on the stage of production. People further north in Santa Maria and Watsonville, where plants are still dormant, didn’t have to apply those strategies because plants weren’t actively producing, which is more of a concern.
If the temperature is well below freezing, the name of the game is to save the plant for later. Your fruit is damaged. When you apply the water, it protects the plant from being killed, although when it thaws, much of the fruit hanging on it is water logged and has to be thrown away.
Some use wind machines, others rent helicopters to fly over fields. That works in the threshold of freezing. The ice canopy method, readily used by Florida growers of strawberries but rarely used in the state of California, saw widespread use during this past cold snap as temperatures reached as low as the mid 20’s.
Q: Doesn’t the cyclical nature of the business help minimize the damage as well?
A: Fortunately for the strawberry industry, it is constantly regenerating itself in stages from flowers to ripe fruit. This freeze is less of a seasonal catastrophe to the strawberry industry than to other commodities. The strawberry growers can make up lost time, getting good yields and solid quality fruit with expected or above expected tonnage for the year. This is certainly not a season breaker. Given that it happened early in the season helped. Not a lot of promotion was in place at this time, so it was not as disruptive as if it happened in a month’s time, making it easier to handle from a marketing standpoint.
Q: Are there any advantages to a cold spell?
A: Yes. In a cold winter, the roots stretch, plants get established and very hearty, the workers will clean off damaged fruit and plants will start pressing new flowers from the crown and the whole process will start over.
If plants are in too warm of conditions, they grow shallow roots, and don’t produce as well when the really warm weather hits later. Usually for strawberries, it is favorable to have a cool start to make a strong plant. While this has been a difficult time for our shippers, the season is still in its infancy and they can turn it around.
We appreciate everyone taking time out during this busy period to keep the industry informed. We wish everyone well.
We’ll be back with more as we see how things resolve themselves.