By Doug Plantada, ALC Los Angeles
Imagine you’re walking down your local produce aisle, looking to cross some fruits and veggies off your list, and you notice something is a bit off. The lemons are a little smaller than usual, watermelons have a slightly different look to their rind. Your favorite Hass avocados aren’t quite as meaty and you can’t put your finger on them but their shape is different than you’re used to as well.
As food demands increase as a result of Covid-19 and the natural disasters of the past two years, this exact experience is becoming more common as imports of fresh produce have risen dramatically across the country. In 2021, U.S. imports of fresh vegetables from January through May were at $4.88 billion, up 4% compared with 2020.
Of the many diverse commodities grown in the United States, onions are one of the hardest hit by import increases, up 14% at $221.1 million this year. Typically, onion imports would support the industry by providing supply during the off-season, but mid-February freezing temperatures in South Texas significantly reduced yields for onion crops, and that has translated to higher prices this year.
Onion shippers are looking to imports to make up for lost crops, which according to Dante Galeazzi, president, and CEO of the Texas International Produce Association, estimates point to damage of 20% to 30% of crops in 2021. In order to maintain control over market conditions in cases like natural disasters and the increased demand due to the pandemic, the USDA has historically agreed with producers/shippers to create something called a “Marketing Order.”
Marketing agreements and orders are initiated by the food industry to help provide stable markets for dairy products, fruits, vegetables, and specialty crops. Each order and agreement is tailored to the individual industry’s needs. Marketing Orders are a binding regulation for the entire industry in a geographical area and are approved by the producers and the Secretary of Agriculture. In short, Marketing Orders would allow onion growers in Texas to promote their products by collectively influencing the supply, demand, or price of particular varieties of onion.
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Doug Plantada has been with the Allen Lund Company for two years and is currently a broker in training at the Los Angeles office.