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Nogales Crossing Delays; Bananas are now Arriving at Wilmington

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DSCN9002Delays in Mexican produce crossing the border, which also means in delays for produce haulers picking up product at distribution centers, is occurring at Nogales, AZ…..Also, bananas are now arriving for the first time by boat at Wilmington, NC.

Nogales is a leading port of entry for Mexican fresh vegetables, amounting to $2 billion in 2016, is having delays due in large part from a shortage of officers.

A shortage of as many ad 300 officers is reported a US. Customs and Broker Protection (CBP). The results are long lines delaying produce border crossings.

Citing security reasons the CBP doesn’t reveal exactly how many officers are currently working at the gateway.  However, they acknowledge the port is rotating staff by bring in officers from other ports around the U.S. to Nogales for 90-day work assignments.  As many as 175 officers have relocated to the Nogales for temporary duty, reports the National Treasury Employees Union.

In 2016 alone, $8.3 billion worth of U.S. exports when from Arizona into Mexico.  Also in 2016, $7.4 billion in Mexican goods were imported into Arizona.

Not only is commerce adversely affected by the delays at Nogales, but travelers looking to cross the border are looking at lengthy delays.

Anthony Reardon, president of the Nogales, National Treasury Employees notes CBP’s protracted and complicated hiring process, strict polygraph testing, and extensive training times are all at play when he recently testified before congress.  This has resulted in 3700 vacant positions for the agency, simply due to the 12 to 18 month hiring process.

Banana Imports at Wilmington

Bananas imported from Central America recently began arriving at the Port of Wilmington (NC).    The inital arrival marks the beginning of a 12-month commitment to bring weekly deliveries of bananas for distribution by truck to distribution centers across North Carolina and South Carolina.

Wilmington is the first South Atlantic port to implement both phases of the Department of Agriculture’s Southeast In-Transit Cold Treatment Pilot program, which allows for more direct imports of produce.

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A Look at Produce Shipments from the Eastern Time Zone of the U.S.

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A1Produce trucking can be frustrating this time of year as spring is still a month away (March 20th), rates are down from earlier in the year, and spring vegetable shipments have yet to seasonally take off.

An interesting note is imported truck loads that include everything from Nogales and South Texas, as well as ports on both coasts, there were 7000 fewer truck loads shipped than during the same week in 2017.  Part of the explanation is many imported produce items are maturing on a more normal schedule this year, compared to last year when warmer weather resulted in a lot of early crops.

Florida spring shipments won’t hit volume for several weeks, but there are signs of life.  The new season for red potatoes out of Southern areas is underway, and we are seeing light but increasing volume with vegetables such as beans and cabbage.  Tomatoes (mostly mature greens) are averaging around 750 truck loads weekly, although most loads out of the state involve multiple pick ups.  Plant City area strawberries are averaging around 500 truck loads a week.

Florida produce – grossing around $3000 to New York City.

Port of Philadelphia

Chilean fruit arrivals are growing in volume.  Early season Chilean grapes haven’t been that impressive quality-wise, but it’s good enough you shouldn’t face claims issues over it.  There also is increasing volume with peaches, plums and nectarines.  However, the biggest single volume item may be pineapples from Costa Rica and other Central American countries.

Otherwise, it is pretty much slim pickings from the Eastern time zone.  You’ve got light volume out of New York state with apples, cabbage and storage onions.  Eastern North Carolina is shipping around 250 truck loads of sweet potatoes each week, which is more than double the other leading states of California, Mississippi and Louisiana combined.

Michigan is moving about 150 truck loads of apples weekly, primarily from the Grand Rapids region.  Some shippers buy items such as potatoes and onions from Western states, repack them, and then ship it out.

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Fresh Del Monte and Mann Packing – A Potent Combination of Vast Innovation and Experience

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010By Jim Prevor’s Perishable Pundit

With relentless pressure on margins in all commodity produce driven by the ever-increasing power of large buyers, the necessity of innovation has never been greater.  Fresh Del Monte has invested in innovation, whether varietal — its Del Monte Gold Pineapple was the single greatest leverage tool in the produce industry for a while — or structural — methodically building a network of regional processors.  Now Fresh Del Monte decided, in one fell swoop, to buy an innovation factory and scale up its product line to be able to face retailers across a broader spectrum. We speak, of course, of the announcement that Fresh Del Monte will purchase Mann Packing.

From a business perspective, it is hard to think of a more synergistic acquisition. The storied Del Monte brand had its roots in vegetables, with canned green beans and the like creating billions of multi-generational impressions that have sunk into the collective sub-conscious of the nation and the world. Yet the fresh company had its strength in fruit — pineapples and bananas notably, but also fresh-fruit processing. Now, in one fell swoop, Fresh Del Monte has a division that is a leader in fresh-cut vegetables.

No business strategies have been announced, and for the moment, there will be no changes for customers. The Mann management team stays, and the company will operate just as before. But one doesn’t have to have inside information to imagine the Del Monte brand starting to appear on fresh-cut vegetable packs and other innovative products that Mann is known for.

The deal also points to the evolution in the business that is favoring multi-product companies. Once one company starts to broaden its range, others find the necessity to do the same; otherwise competitors, profiting on other lines, can eviscerate margins on the one competitive category and kill a business. Broad diversity of product, geography and customer type makes a company invulnerable to this strategy. So, Del Monte is acquiring not just a source for new product ideas and not just a new business line, but a strategically more defensible position in the industry.

The whole deal reminds us of something that has often been dismissed in recent times: The enormous value of experience. Deals like this involve many people doing many things but, despite its good sense, the deal might never have happened if Fresh Del Monte had not hired Emanuel Lazopoulos, now Senior Vice President of North America Sales, Marketing and Product Management.

Emanuel joined Fresh Del Monte back in 2005 to run its Fresh-Cut operation. His career, though, includes time as the Managing Director of NewStar Fresh Foods, as Vice President of DNA Plant Technology and as Vice President of Dole Fresh Vegetables — in other words, he spent a lot of time in Salinas. There are many companies that are buying other companies today — there is private equity and venture capital funds, for example. But for a family business like Mann, finding a home that will lead to success for grower partners, for employees, for the living embodiment of generations of sweat and tears, these are not trivial matters.

Over and over again, we have heard the same story: a team of super-smart, super-educated private equity analysts march into a business to review the numbers and do the analytics but also say they have no interest in touring the plant, so they turn off the very people they need to get excited about a potential combination. It is no stretch to imagine that decades of familiarity raised the comfort level and facilitated the deal.

There has been an enormous drain of produce experience from important produce companies and their retail customers. But deals like this remind us that though the loss may not always be evident or be easily quantified, it is real. One opportunity, one moment, one connection, can cover a lifetime of salary.

Selling a successful family business is always filled with both excitement and trepidation, hope and a tinge of melancholy.  But family businesses are always challenged by the mere passage of time. With each successive generation, ownership gets more diffused, difficult decisions have to be made about how to deal with the differing financial interests of those family members who work in the company and those who do not; estate taxes must be paid with each generation, and shareholders, once bound by love, respect, history, familiarity and propinquity — so often become strangers. If the right situation presents itself at the right time, a sale solves many problems and actually sets the business up for continued growth.

This particular story is a great drama. It includes great loss, but also stands as testament to the extraordinary resilience of the human spirit and the extraordinary importance of the individual.

It has a heroine… Lorri Koster, née Nucci, Chairman and CEO of Mann Packing Co., shepherded Mann through this process. She ran this ball down the field and carried it over the line. But she was not the football player in the family.

The plans once made called for her brother, Joe, to head up the company, who died several ago unexpectedly.  When these settled plans were disrupted, nine out of ten companies would have never recovered. But the Nucci’s and the Ramsey’s circled the wagons. Lorri’s father, Don Nucci, and Bill Ramsey jumped in, but Don died shortly thereafter.  Lorri, though, always connected to the family business, had left full time employment to try other things, including a stint at a produce dot com, setting up her own marketing agency, buying a local magazine.

But in the aftermath of the passing of both her brother and her father, this baseball Mom, with support of her sisters DeeDee and Gina, would come to guide Mann Packing to its present prosperity. To take a reputation for ethical business conduct, combine it with innovation, position it as Moms selling to Moms and complete the transformation of what was once the largest commodity broccoli shipper in the country into a kind of produce skunkworks that boosts sales and consumption with the quality of ideas well-executed.

Fresh Del Monte is a good home for Mann. The company knows growers, has facilities that can be jointly leveraged — say regional vegetable processing — it won’t run from a food safety issue, and both companies combined can leverage transportation and procurement.

This story, though, tells us that buildings and equipment are just the public manifestation of the story. It is the character of people that matters more than anything. Emanuel had to be seen as a man of good character and integrity; not having been in Salinas would have been a negative. Lorri had to undertake responsibilities when others might not have done so. She had to persevere under tragic circumstances when others would have not been able to. Amidst darkness, she had to broadcast a light that would inspire others to follow —and she did.

In business, everyone will look for opportunities to trade and engage with the new, larger, Fresh Del Monte, but the profit to be derived by watching this deal is the lesson that experience matters, that perseverance matters and the character matters —above all.

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Stemilt Launches Honeyhill Premium Honeycrisp Program to Extend the Season

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 DSCN0450By Stemilt Growers

WENATCHEE, Wash. – Honeycrisp apples will have a longer Honeycrisp season this spring and summer.  Stemilt Growers will be expanding their Honeycrisp shipping season through mid-summer with a new brand called Honeyhill™.

“Honeyhill™ is an exciting addition to include in our family of brands as we will be offering one of the most popular apple varieties for a longer timeframe,” states Roger Pepperl, Stemilt marketing director. “We’re choosing the best Honeycrisp apples for Honeyhill™ boxes…. that taste as if you had just picked them from the tree back in the fall.”

Stemilt is not allowing just any Honeycrisp apple to be packed under the Honeyhill™ name. Only high-color Honeycrisp apples will qualify for the Honeyhill™ brand. The main strain that is producing high-color and high-quality Honeycrisp apples late in the season is Royal,  a new sport of Honeycrisp apples that is actually quite different than the rest of the pack.

“The Royal Honeycrisp is a beautiful strain with great color and finish. Its real advantage is that our teams can pick full-colored fruit at the right starch levels in order to store well in our controlled atmosphere rooms. When we pull these apples out at a later date, the starches have converted to sugars with good acides that deliver that amazing fall flavor in the spring and summer months,”  said Pepperl.

Planted in some of Stemilt’s most pristine orchards throughout Washington State, Stemilt’s field team works effortlessly to ensure each Royal Honeycrisp can maximize it’s time on the tree. The Royal strains ability to color well allows Stemilt to pick the fruit in an ideal window where the fruit starch levels allow it to be stored for long-term success. Stemilt also utilizes shade cloth and windscreens to further care for its Royal Honeycrisp apples.

Organic Honeycrisp apples are also available and currently being packed under Stemilt’s Artisan Organics™ label. “We all know organic is a growing category….,” states Pepperl. “We’re excited about Honeyhill™.

About Stemilt

Stemilt Growers is a leading tree fruit growing, packing and shipping company based in Wenatchee, Washington. Owned and operated by the Mathison family, Stemilt is the leading shipper of sweet cherries and one of the nation’s largest suppliers of organic tree fruits. Stemilt has also demonstrated a commitment to sustainable agriculture and social responsibility since 1989, when founder Tom Mathison launched the company’s Responsible Choice program.

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California Avocado Shipments to Ramp Up in March; Mexico is Still Strong; Golden Kiwi Update

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AA7Avocado shipments from both California and Mexico are looking strong, while a big increase is seen coming for imported golden kiwifruit.

Mexican avocado shipping volumes are big the second and third week of January, but reaches a peak in the fourth week of the month leading up the big game February 4th.  It is known as the Super Bowl effect.

The Hass Avocado Board reports 204 million pounds of avocados were shipped into the U.S. during the first four weeks of January.    Of the total amount of avocados, 93 percent were imported from Mexico, with 3.6 percent coming from from California, with 2.7 percent from the Dominican Republic with Chile supplying 0.7 percent.

Despite widespread shortages of trucks being reported around the U.S. in the first half of January, it apparently had minimal affect on shipments for the Super Bowl.

California Avocado Shipping Forecast

Avocado shipments are currently originating both from Mexico and California, although the vast majority are coming from South of the U.S. border.

For example, West Pak Avocado Inc. of Murrieta, CA  sources most of its avocados from Mexico and California and sees good supply and quality this season from both areas.  Mexico will have strong volume continuing into the summer.  California should have good shipments totaling around 374 million pounds.

There was limited California volume is available for the Super Bowl because it is so early in the season, when the limited shipments are typically directed to California receivers.   National California avocado shipments typically ramps up in March and April.

Golden Kiwi Shipments

The golden kiwifruit season for imports from New Zealand recently ended, but importers already are laying plans from the new arrivals coming in May.

Golden kiwifruit imports more than doubled in 2017, with the SunGold variety from Zespri accounting for 80 percent of the category.  The company is based in New Zealand  and set a record with 27.8 million pounds of the fruit imported.

Zespri is planning a 50 percent growth for the coming year and extend the season at the season into March and April.

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Del Monte Fresh Produce Announces Acquisition of Mann Packing Co.

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DSCN0441By Del Monte Fresh Produce N.A. Inc.

Coral Gables, FL. – Del Monte Fresh Produce N.A., Inc. (“Del Monte”) entered into a definitive agreement on February 5th, to acquire Mann Packing Co., Inc. (“Mann Packing”), an award-winning innovator and leading grower, processor and supplier of a broad variety of fresh and value-added vegetable products in North America.  Mann Packing’s annual sales were approximately $535 million in 2017.

Del Monte will acquire Mann Packing for an aggregate consideration of approximately $361 million. The transaction is subject to regulatory approvals and other conditions that are customary for transactions of this type and is expected to close during the first quarter of 2018.

“We are extremely pleased about our acquisition of Mann Packing, a leader in the fresh and value-added vegetable category,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer of Fresh Del Monte.  “Mann Packing’s strength in the vegetable category, one of the fastest growing fresh food segments, will provide us with synergies, enhancing our ability to better serve our combined customers and address consumers’ needs for healthier products.  This acquisition is a significant step toward our goal to be the world’s leading supplier of healthful, wholesome and nutritious fresh and prepared food and beverages for consumers.”

“Everyone at Mann is excited with this development” said Lorri Koster, Chairman and Chief Executive Officer of Mann Packing. “We share Del Monte’s values and commitment of providing fresh, high-quality produce based foods that are nutritious and delicious. Both our companies have been successful in their own right with their superior quality, service and value to our customers and consumers in all channels throughout North America. This will only be enhanced by combining the business expertise and skills of two of the industry’s premiere organizations.”

About Del Monte Fresh Produce

Del Monte Fresh Produce N.A., Inc. is one of North America’s leading marketers and distributors of high-quality fresh and fresh-cut fruit and vegetables.  Del Monte Fresh Produce N.A., Inc. markets its products in North America under the Del Monte® brand (as well as other brands), a symbol of product innovation, quality, freshness and reliability for more than 125 years.

About Mann Packing Co.

Mann Packing, established in 1939 and based in Salinas, California, is a leading grower and supplier in North America of fresh vegetables, including washed and ready to eat fresh-cut vegetables, snack packs and party trays, and washed and trimmed lettuce products for the food service and retail markets.

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Imports are Shaping up Well for Mexican Mangoes and Pineapples from Costa Rica

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AA9

Mexican mango imports are now taking center stage for U.S. markets, while the imported pineapple season from Costa Rica is starting out with flying colors.

While increased mango volume from Peru was seen December and January, Mexican volume started in late January and now is closing in on 1 million mango boxes per week.

During 2017 Mexican mango volume exported to the United States hit a record at 80 million cases. In fact, Mexico accounts for 62 percent of the mangos exported to the U.S.

Mexican mango exports have increased from 59 million in 2014, to 80 million cases last year.

There was a drop in Mexican exports from 2013, when a then-record 70 million cases were shipped to the U.S.  However, there was increased Mexican mango volume each year for at least 10 years, with 40 million cases shipped in 2004.

A total of 23 Mexican states produce mango, with about 25 percent of Mexico’s mango crop being exported fresh.

Imported Pineapples

Strong supplies of imported pineapples are  seen through the first half of 2018.  Dole Food Co., Westlake Village, CA is a leading importer of the tropical fruit.   Costa Rica provides about 80 percent of pineapples in the U.S. as the first half of the year looks better than recent few years.  A normal dip in Costa Rican volumes is expected in the late summer and early fall with volumes returning in the fourth quarter.  Mexico also is expected to have good supplies, although volume to the U.S. is much less than with Costa Rica.

Over the last four years, cut pineapple has grown much faster than bulk in the U.S.

As recently as 1991, Hawaii provided half of the total U.S. fresh pineapple supply. That year, total supply of fresh pineapple totaled 503 million pounds, of which Hawaii accounted for 250 million pounds and imports provided 254 million pounds.

Fast-forward to 2006 and Hawaii supplied only 192 million pounds of fresh pineapples and import volume ballooned to 1.4 billion pounds.

By 2015, Hawaii’s contribution to the fresh pineapple supply disappeared altogether, while imports supplied all the fresh pineapple supply of 2.3 billion pounds.  Hawaii’s demise in the pineapple  industry was primarily due to high costs  of operation, compared to other areas around the world..

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How President Trump is Growing Business and Creating Jobs

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img_6361By Larry Oscar

I get a lot of questions these days about business. Maybe it’s because we are finally beginning to see some light at the end of an eight-year tunnel after the United States has had the most anti business leadership in U.S. history.

Or maybe it’s because we now have a business man in the White House rather than a career politician.  For whatever the reason this is a positive sign. It has always been my contention business is a natural right of man.  Just as is free speech or freedom of association, business is also a natural state of mankind.  The right to produce more than you need and barter or sell the excess for a profit is a natural right that goes all the way back to the cave men.

Capitalism, by its very nature, is a natural state of man.  It is human nature to want to look over the fence and desire the things we don’t currently have.  However, there are many among us today that let their jealousy and envy rule their hearts.  They think that success is evil, and that our lives need to be controlled or we will have the successful among us make the unsuccessful “feel” bad.

Somehow their little minds think the insecure emotions of others are someone else’s responsibility.  No where was this stupid idea more prevalent than in the Obama administration.  Obama and his minions spent almost all their time trying to stop the rich from getting richer.  And they did this at the expense of the poor. They had the idea somehow by keeping the rich from getting richer it was going to benefit the poor.  Instead it had the opposite effect. By keeping the rich from getting richer Obama constrained business growth and the jobs that businesses create.

This left the poor with the lowest wage growth in U.S. history.  We saw business after business either move out of our country or close its doors.  Workers had to take the jobs of teenagers just to provide for their families.  Many of us who understand how business works were vehemently opposed to Obama’s stupid socialistic ideas, but when we spoke out we were accused of being racist.

Obama got a pass because of the color of his skin.  Shame on those of you who let Obama suck you in.  Under the Obama administration the United States had to suffer from the poorest example of leadership we may have ever had.  Obama added $10 trillion to the nation’s debt with big government spending and what do we have to show for it?  He drew red lines in the sand that were meaningless.  Anybody with half a brain knows threats never work.

He told us the lost jobs aren’t coming back” and that a 1 ½ percent increase in the GDP was the new normal . Obama was the champion of mediocrity.  My how fast times change.  It has only been a year since Donald Trump, a business man, took office and look at where our business community is now.

(Larry Oscar is a graduate from the University of Tulsa and holds a degree in electrical engineering. He is retired and lives with his wife on a lake in Oklahoma where he brews his own beer, sails, and is a member of numerous clubs and organizations.)

 

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Transportation Rates Are Lower, But Many Remain Higher than Last Year

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DSCN0299It is a bit amusing watching the produce industry’s reaction to transportation rates and other issues.

Little thought is given to transportation – trucking or rail – until there are problems.  Those problems almost always center first on what’s the cost of the truck?  Find the cheapest truck available is pretty the industry’s unwritten motto.

This has typically been most true after demand for refrigerated equipment subsides entering the fall as produce volume is seasonally lower.  It continues until around March or so when spring produce shipments are increasing and demand for equipment rises accordingly.

Since last year this has all changed.  Another cycle in trucking has arrived.  These cycles typically last maybe three to five years.  The cycle that has ended saw rates for produce truckers remain pretty stagnant.  A sluggish economy with stagnant wages did not present as many attractive employment opportunities.

That’s now in the rear view mirror as demand for trucks, and drivers is often outstripping supply.  Now there’s near panic is some produce industry corners. Not only are freight rates substantially higher, but getting a truck at any cost is often a challenge.

Truck rates have recently backed off some, but spring is coming soon and we’ll see how long that trend lasts.

The federal mandate for electronic logbooks certainly isn’t going to help no one.  Truckers currently are allotted 14 hours of operating time, but how often do they waste much of this time at loading and unloading docks? When multiple pickups and drops are involved, the problems is only compounded.

While truck rates have plunged from only a month ago, they are still much higher than a year ago.

Rates from the California desert are currently about $7,400 to  New York City, off 15 percent from three weeks earlier.  However, the current rate is still 20 percent above the same time a year ago.

For a load of apples out of  the Yakima Valley in Washington state the gross freight rate is around $4,600 to Dallas, 20 percent below only a few weeks ago, but very similar to rates at the same time last year.

Rates from south and central Florida for tomatoes and veggies are mostly below $3000 now, which is 20 percent more that a year ago.

 

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Mushroom Shipments Should Improve, But Florida Citrus has More Bad News

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AA11Mushroom shipments look good for the first quarter of 2018, which will be an improvement, at least for some areas of the country….Meanwhile, the forecast for Florida citrus shipments takes another hit.

Shipments of mushrooms from Texas and Florida should be better this year as the region has recovered from hurricane damage last fall.  While mushrooms are grown indoors, production still depends on the quality of compost, which is grown outside.

As long as growers don’t have to deal with frozen compost, a relatively mild fall has led to improved conditions.   At the same time companies such as Oakshire Mushroom Farm of Kennett Square, PA, which markets mushrooms under the Dole label, see adequate labor as a continuing problem, like other operations, because mushrooms are a very labor-intense crop.

Monterey Mushrooms Inc. of Watsonville, CA also anticipates an good crop for early 2018.  The company has 10 farms strategically located around the United States and Mexico and it  makes its own compost.

White mushrooms still constitute most mushroom shipments, but brown mushrooms continue to gain.  Ten years or more ago, white mushrooms represented over 90 percent of shipments.  That has now shrunk to about  70 percent, because baby portabellas are still increasing in popularity.  Portabellas have been fairly stable, accounting for around  6 to 7 percent of total volume.  Specialty mushrooms, particularly shiitake and oyster, also are gaining in volume. 

Florida Citrus Shipments

45 million boxes of oranges from Florida are predicted to be shipped, down 2 percent from the USDA January forecast.

The 2017-18 crop will be the smallest in over 75 years, assuming the estimate is accurate.   Hurricane Irma devastated much of the production in the state when the storm hit last September, compounding the low production numbers caused by citrus greening disease.

The current crop projection is off 35 percent from the 2016-17 season.

The forecast for valencias is now 26 million boxes, down 4 percent from the January estimate.The projections for non-valencia oranges and grapefruit are unchanged at 19 million boxes and 4.65 million boxes, respectively.

Before the hurricane, private estimates suggested Florida was set to produce 75 million boxes of oranges this season.

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