Production costs and weather decrease West Mexico veg supplies

Production costs and weather decrease West Mexico veg supplies

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Production costs and weather decrease West Mexico veg supplies

Mother Nature and grower conservatism this fall combined to reduce vegetable and melon production in West Mexico, according to Omar Losolla, president, and CEO of Seeded Produce LLC, based in Rio Rico, AZ. Seeded distributes a full line of Mexican vegetables and melons.

Cold weather lowered yields in Mexico’s early harvest months of September, October, and November. “Production is down, but we have better markets for about every commodity.”

Losolla adds, “It feels that there is less product around. I don’t have the figures. I can’t say: ‘There is 20% less product.’ But it seems fewer smaller growers are venturing into agriculture because of all the increases in costs because of inflation. It’s taken a toll on Mexico. I’m 100% sure that extreme inflation has encouraged smaller growers not to produce and the bigger ones are producing less and being more careful in how they diversify. 

“We have a pulse on how this works every day. There are undertones that there is not a lot of product and it’s not in a lot of hands.”

Losolla feels that large producers have become more analytical in their planting decisions.

For example, he said a grower may once have chosen to plant 100 acres of mini-melons, 200 acres of watermelons and 100 acres of cantaloupes. High production costs likely drove those growers to sharpen their pencils to give closer consideration to production, packing, shipping, and market realities.

“They look at markets more. They are cautious in how they plant. It’s very expensive to grow.”

The good news is that reduced volumes are smoothly moving through the marketing chain due to high demand. Losolla’s retail and wholesale produce customers are absorbing good volumes. He sees that the foodservice industry has recovered from disastrous setbacks during the Covid pandemic.

Generally speaking, the industry makes more money when supplies are down. Oftentimes Mother Nature steps in and reduces supplies. But this fall, economics and finance are also important influencers.

“This has allowed better markets because there are less supplies of almost everything.” He stressed that “demand has been really good on all melons this fall. It’s a very strong market. It’s very good. And the markets have held the line. There has not been a variance this fall. It’s very steady.”

The vegetable markets have also been steady and sales desks “have not had to really push” to move product. 

Losolla said the market for the coming winter months will depend on upcoming weather patterns. 

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