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Economy taking a bite out of produce profits

By Denise Holley
Published Friday, February 27, 2009 9:09 AM MST

Don’t put those tomatoes in the refrigerator. The cold temperature can cause them to lose flavor and become mealy, said Jim Cathey, general manager at Del Campo Supreme Inc., a produce distributor on West Frontage Road.



Most likely, those tomatoes grew up in sunny Sinaloa, Mexico, and traveled several hundred miles by truck, kept at 50-60 degrees, to arrive at your local store, Cathey said.

“We’ve had ideal growing conditions (for the 2009 harvest),” Cathey said. But this doesn’t translate into good financial returns for the growers and distributors. “We have beautiful tomatoes being sold cheap because the economy is not good.”

During the winter, Mexico grows the crops Americans associate with summer “ peppers, squash, corn, cucumbers and tomatoes. Some 4 billion pounds of Mexican produce will come through the Mariposa Port of Entry each year to produce distributors in Nogales and Rio Rico. From here, trucks carry the vegetables and fruit to stores all over North America.

“We grow the opposite of the U.S. season for every state except Florida,” Cathey said.

Mexican growers plant tomatoes in September and harvest between November and June, Cathey said. Tomatoes are a perishable crop and the price goes up and down according to supply and demand.

“When your supply reaches the level of demand or surpasses it, your price goes down,” said Allison Moore, communications director for the Fresh Produce Association of the Americas (FPAA).

Recently in the Midwest, snow-bound customers couldn’t get to the stores and when they could, they bought mostly non-perishable foods, Moore said.

The recession has dampened the U.S. appetite for fresh vegetables, said Alicia Martin, who is in charge of grower relations at Wilson Produce on Gold Hill Road. “Our contracts with club stores (Costco, Sam’s Club) are down. Overall, people are buying less.”

Less orders

Some “white tablecloth” restaurants are ordering less produce because fewer people are eating out, said Enrique “Kiki” Arana, sales manager.

Ironically, the decline is happening at a time when many Americans were beginning to consume more vegetables and fruits, Arana said. Latinos, Asians, Greeks and Italians eat more tomatoes than the rest of the U.S. population. But Americans can’t compete with the vegetable-hungry Canadians, he said.

Habits

“Canadians are more fresh-oriented and more conscientious about what they eat,” Arana said. “Americans want convenience.”

More markets are offering pre-made salads and fruit platters, Martin said. “Fruits and vegetables are thought of as expensive, but the long-term benefits are huge.”

No country can grow every crop it wants 365 days a year, Moore said. “It’s warm now in Mexico. Then the heat travels north and it becomes too hot to grow in Mexico. At different times of the year, Mexico imports pears, apples, tomatoes and lettuce.”

Although part of the produce from Sonora and Sinaloa stays in the Mexican national market, the export market to the United States and Canada drives most of its production and creates jobs in Mexico and Santa Cruz County.

At Del Campo’s farms in Culiacan, some 6,000 to 8,000 workers pick and pack tomatoes and colored peppers at the peak of harvest, Cathey said. In Nogales, Del Campo employs 12 people in the office. Another 20 workers zip around on pallet jacks, moving boxes of tomatoes in the 120,000 square-foot warehouse.

Wilson Produce imports its vegetables from a family farm in Bamoa, Sinaloa, Martin said. Her grandmother, Esther Alcalde de Wilson, founded the farm in 1937. Her mother, Barbara Wilson de Bon, is up to her elbows in Roma tomatoes at the farm, where some 2,000 to 3,000 employees nurture and pack the crop.

“It’s so much cheaper to bring it packaged from the farm,” Martin said.

At the Nogales warehouse, workers unload truckloads of tomatoes, check the quality and build the order for different customers.

“These large Romas are vine ripe,” Martin said, pointing to a box of pale tomatoes. “This allows us to ship them to New York and they’re not going to be tomato sauce when they get there.”

The company keeps 16 employees year-round and hires another 11 people as seasonal loaders from late October through mid-July, Martin said.

When tomatoes arrive from Mexico, “in a perfect world, they go out the same day,” Cathey said. But about half the truckloads stay overnight at the warehouse. If the market is weak, the fruit could linger up to two days.

Sometimes, tomatoes arrive too ripe because of delays at Mexican checkpoints, Cathey said. “With a slow market, your best option is to give it to the food bank.”

If there are no delays, a trip from Bamoa to Nogales, Ariz., should take about 10 hours, Martin said. But when trucks get stopped at checkpoints and the border crossing, it can take 18 to 24 hours to arrive in Nogales.

Checkpoint

Martin described the military checkpoint at Benjamin Hill in Sonora, where soldiers open the back of the trailer and climb on top of the pallets searching for drugs and weapons.

In the process, they break the cold chain essential for food safety, Martin said.

“It (the load) is exposed to the elements,” Martin said. “Imagine a 33-degree load of grapes and it’s 104 degrees out.”

Produce distributors look forward to a new checkpoint under construction south of Benjamin Hill, Martin said. It will have a gamma machine to X-ray the load without opening the trailer and can send a truck and its perishable load on its way much faster.
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