Monday, July 22, 2024

Produce season likely to be weak — and it’s bad news for truckers

Historic rainfall in California will alter the typical harvesting schedule this year. Some crops will be gathered later than expected and some yields will be unusually weak. 

Massive flooding is preventing workers from harvesting lettuce, strawberries and other plants right now, particularly in central California. Workers have also been unable to plant crops like tomatoes, one expert from the University of California’s farming extension center told FreightWaves. 

That’s bad news for the trucking industry. Truckers view late spring and early summer as some of the best times of the year for freight volumes. Some even dub it the “100 days of summer.” That upswing in loads is partially thanks to perishable produce that needs to be hauled out of places like California and into grocery stores or distribution centers around the country. 

But a weak produce season could dampen the 100 days of summer. Such depleted harvests are coming at a bad time for the trucking industry. Trucking conditions have remained negative since May 2022, according to FTR’s Trucking Conditions Index

FreightWaves’ National Truckload Index shows that 2023 (in blue) has been weak for trucking so far compared to the same time in 2021 and ’22. However, rates are elevated compared to 2019 and ’20. (Chart: FreightWaves SONAR) 

“We need this sort of injection of volumes into the marketplace,” said Mitch Mazzaro, director of temperature-controlled shipments at Austin, Texas-based freight brokerage Arrive Logistics. “We need to keep drivers busy. We need to be able to offer these loads to them. We need to be able to get their wheels turning.”

Mazzaro and three other freight brokers told FreightWaves they’re not sure just how weak this year’s harvest season will be. However, they don’t believe any massive windfall of loads is coming — though the need is great

“This has not been a banner year for produce,” said Michael Feig, co-founder and COO of temperature-controlled brokerage Capital Logistics. “You couple that with a pretty quiet freight market and it’s sort of a perfect storm.”

Why harvesting in California may be delayed — and some plantings may be wiped out altogether 

The Associated Press reported that around 20% of strawberry fields in a key growing region of California have been submerged since March 10, when a local levee broke and flooded much of its surrounding areas. It’s unclear how many of those plants can be harvested, but the longer they are underwater the greater risk they face. 

Thomas Turini, a vegetable crops advisor with the University of California’s farming extension center in Fresno, said farmers have seen challenges in entering deluged lettuce fields in the state’s Central Valley. What’s more, some of that harvested lettuce showed signs of a type of crop disease that emerges in ultra-wet conditions. Such diseased crops must be tossed.

A shortage of these grocery store staples will likely be yet another contributor to inflation, said Syed Aman, CEO of freight brokerage Hwy Haul. A Bloomberg analysis of federal data indicated that berry prices alone rose 41% in 2021 and another 8.7% in ’22. 

However, some California crops may benefit from this deluge. Ian LeMay, president of the California Fresh Fruit Association, said  the year-round crops that his group’s members harvest, like nuts, can sustain and even flourish in high water. Still, LeMay said some dry, warm days would be appreciated.

Tomatoes: the unexpected jewel of trucking 

Of particular concern to Turini and growers in central California is how these floods could affect tomatoes. Typically, farmers begin planting the crop in late February.

“There’s very few tomatoes that have gone in up to this point,” Turini said. 

Tomatoes! (Shutterstock)

Thanks to that delay, many tomatoes will need to be harvested weeks later than usual, and they will all mature at about the same time. That could even mean processing plants will be overwhelmed by a sudden surge of tomatoes, sparking a tomato bottleneck, according to Turini. 

A weak tomato harvest would be particularly spooky for truckers. Turini said an acre of the crop can yield about 50 tons that need to be hauled. In comparison, an acre of onions only yields around 16 tons, grapes 20 tons and almonds up to 4,000 pounds. 

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The post Produce season likely to be weak — and it’s bad news for truckers appeared first on FreightWaves.

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