Fewer plantings of California leafy greens are expected to result in less shipments during the next few months. This is because of declines in foodservice demand related to the COVID-19 pandemic.
RaboResearch conversations with vegetable shippers reveal they are likely to cut acreage by 10 to 15 percent over the next 60 days.
Because of reduced demand over the past six weeks, growers for foodservice have walked away from fields. Many are hoping to redirect shipments to retailers.
The acreage not being used now represents 50 to 85 percent of the land normally planted for product destined to restaurants, schools and other foodservice accounts. Vegetables generally are directed to foodservice accounts more than fruits. Tomatoes and lettuce are two of the higher volume vegetables going to foodservice.
About 15 percent of fresh fruit is shipped for foodservice.
Increased shipments to retail have helped compensate for lagging foodservice demand.
Retail statistics for the four weeks ending April 12 reveal fresh produce sales increased 17 percent compared with the same period last year.
Fresh fruit sales were up about 9 percent for the four-week period, while fresh vegetable sales were up 25 percent.
Orange sales for the period were up 55 percent, but sales of grapes, melons and pears were down.
The 25 percent overall increase in vegetables was highlighted by gains in potatoes and sweet potatoes, at 80 percent and 55 increases, respectively.
Packaged salad sales for the four-week period ending April 12 were up only 7 percent.
On the plus side foodservice shipments are likely to increase when states end lockdowns.
Technomic, a research company dedicated to the foodservice channel recently released their annual results report. Over half of the U.S. food dollar is now spent eating out at foodservice vs. retail, as more people go out to eat, rely on takeout or look for supermarket foodservice (convenient prepared food) options. Foodservice is now also the largest sales channel for potatoes in the U.S.
The $845 billion-dollar foodservice industry grew 1.6% in 2016, with the sectors of fast food/quick service, fast casual, fine dining and convenience stores seeing the most growth. All sectors are expected to grow in 2017 with overall sales projected to be up 1.7%. The fastest growing segment should remain fast casual, with an expected sales increase of 6.1% in 2017, followed by an emerging sector, supermarket foodservice with projected 6% growth. Noncommercial Foodservice (e.g. Healthcare, Schools) is also a bright spot, and is expected to continue to grow at a steady pace. Fine dining, which has been down in recent years, is expected to grow 3.1% in 2017.
Potato Exports Increasing
U.S. exports of frozen and fresh potatoes continued to grow in December while dehydrated exports were still down but by a lesser degree. The strong dollar continues to be an issue, but tight exportable supplies are also having an impact on future sales.
Frozen export volume increased 22% in December and is up 6% for the first six months of the marketing year. Exports for the month were up 27% to Japan, 30% to Taiwan and 59% to Central America. Exports to China and Mexico continued to slip, down 21% and 2% respectively for December.
Exports of dehydrated potatoes declined 20% in December and are down 21% for the marketing year to date. December exports to Japan were down 37%, to the Philippines down 70% and to Mexico down 14%. Canada is up 10% for the month, but is still down 6% for the year.
Exports of fresh potatoes, both chip-stock and table-stock, increased 16% in December and are up 26% for the marketing year. Exports for December to Canada were up 26%, with a 47% increase to Central America, 116% to Taiwan and 10% to the Philippines. With the early opening of the Japan shipping window in December the U.S. exported 5,560 MT of additional chipping potatoes there. Exports to Mexico continues to decline down 10% for December, with Korea down 49% and Malaysia down 17%.