Natural Foods Merchandiser

Florida freeze will raise prices at stores

Freezing temperatures in Florida this past weekend are likely to raise prices and slow demand at grocery retailers, according to experts.

Private forecaster estimated that losses of Florida's citrus crop may approach 10 percent. “I predict that it will be somewhere between 5 percent and 20 percent more in the coming weeks,” said Robert Schueller, director of public relations for Los Angeles-based distributor Melissa’s/World Variety Produce. “Ten percent is a pretty small number in agriculture. Over 50 percent would be really detrimental.”

However, “certain regions—mid-Florida, for example—saw a complete crop loss,” said Jason Hollinger, director of procurement at Ephrata, Pa.-based distributor Four Seasons Produce. Affected items include tomatoes, bell peppers, zucchini, cucumber, eggplant, strawberries, kale, collards, lettuces and more. In southern Florida, the damage was less significant. “We will see tomatoes out of there in a few weeks,” Hollinger said.

“In the short term, the little [amount of] crop that has already been picked has a higher price,” Hollinger said. “As the prices translate out to retail, it will slow down movement for several weeks. Farmers like high prices, but demand-slowing prices aren’t good for anyone.” Hollinger predicted that the price hike will be about the same for organic produce as conventional.

If prices go too high, consumers will likely turn to other items. Schueller said that grocers will take mauled crops off advertisements; instead, Hollinger predicted that retailers will create bigger displays of cheap lettuce and broccoli from California.

To fill in gaps in produce sections, both distributors—Four Seasons and Melissa’s/World Variety—will move their buying to either Mexico or sunbelt states like California, Texas and Arizona.

“We multisource, so not all our produce is from Florida,” said Schueller, who pointed out that fickle Mother Nature strikes different U.S. territories in different years. “It’s not such a problem for us, but it will affect regional distributors more.”

Southeast retailers who rely on nearby distributors already have started to reach out to national distributors to fill out their produce section. “Many retailers are contacting us,” said Schueller. “They may not have done business with us for months or years. Now we’re getting calls.”

Hollinger and Schueller expected the freeze to affect market supply and prices for several months—or longer. “For 90-day items like peppers, by the time Florida farmers can replant, it will be too late in the spring. It won’t be worth it to replant,” said Hollinger. “Georgia farmers will plant peppers there, but it will be later than usual because of the freeze.”

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