Southern Hemisphere apples

From the U.S. Apple Marketing Conference, a powerpoint about Southern Hemisphere fruit:

Mexico - mirror policies?

It is helpful to remember: "what is good for the geese is good for the gander, turnabout is fair play and if you can do it, so can I. " And so on. (By the way, what is a "gander"? )

In the context of U.S. trade relations with Mexico, Kelly Jones, chairman of the board of Pico Largo SPR, Chihuahua, Mexico. gave a presentation at the U.S. Apple Association's Outlook and Marketing Conference Aug. 22 that pointed to a possible warning flags for U.S. apple sales to Mexico.

For one thing, Jones mentioned that the spread of the light brown apple moth in California is grabbing the attention of Mexico's phytosanitary authorities. The pest is a threat not only to fruit, but also to crops like corn and beans. Secondly, he noted that Mexico is none too pleased about the treatment that Mexican tomatoes and peppers received from the U.S. FDA. Mexican authorities, Jones said, have promised "mirror policies" for U.S. imports.

How this translates to trade friction in the upcoming year is difficult to say, but it represents yet another reason why FDA must exercise their power responsibly. If not - and our trading partners are provoked by arbitrary actions - it will be U.S. exporters who will have their goose cooked.

The Future Is...not Plastics...but Futures

When the tomato market goes through tough times, like the present depressed situation with homegrowns & backyard product a-plenty, I sometimes wonder which specific factor will be the one to finally pull the price out of the doldrums.

Short-term, will it be less supply out of the commercial growing areas like California & Tennessee? Not likely---they've already scaled back because prices are at or below picking & packing costs.

More demand? Nope, I would venture to say that more tomatoes are being consumed right now on a daily basis than at any time since before the 'salamander' scare, which was what a shipping-point salesman coined it after the word 'salmonella' became tiresome to all of us. I think I'll scream next time I see a neighbor hold up a scarred, misshapen cull of a tomato from his garden, one he'd sneer at in the store, and proclaim 'this is the best tomato I've had in a year!'

Serenity now, indeed...

So we try to talk our way out of this malaise, but what if we had an alternative to offset this molasses-like movement?

Like...futures in tomatoes, or any fresh commodity.

They do it in orange juice, they do it in cotton, they do it in eggs, for God's sakes. If they can project what comes out of a chicken's rear-end, I have to think they can do it for fresh produce.

But, beware the old saying, be careful what you wish for, it might be worse than what you already have. I'm braced for that.

So...let's see where this leads us over the next couple blogs or so. I have a rudimentary knowledge of futures & option markets in stocks. I am aware of time decay nearing the end of a contract, towards the expiration date. Sadly, I have no idea how time decay works when the actual product is physically decaying at the same time. Sounds like a bad scene to me, man.

Or an impending train wreck.

Later,

Jay

Consumer motivation - to have and have not

John Stanton of Philadelphia-based St. Joseph's University has been a speaker on the produce convention circuit for some time. The first time The Packer's library notes Stanton was in 1998, when Jody Shee covered Stanton giving remarks to the National Grocers Convention. At the time, Stanton predicted the rising influence of television chefs, among other food trends. Since then, Stanton's name pops up some 15 times, as he has been quoted in stories ranging from Wal-Mart ("Everyone has an Achilles heel, and, at some point, Wal-Mart will find something they can't overcome. If you asked me in 20 years if Wal-Mart will be in a dominant position, I would answer no. But I don't have the foggiest idea of why they won't," Mr. Stanton says. Global Produce, 2000) to warning marketers about leaning too heavily on a trendy health message for fruit and vegetable promotion, and the fickle ways of journalists. ( "What are they going to write about next year?" he asked. "They're not going to say, ‘Hey, you know what we told you last year about blueberries? Well, it's still true.'" The Packer, 2002)

At the Aug. 22 session of the U.S. Apple Association Marketing Conference, Stanton provided on the more livelier presentations at the show with the topic of consumer motivation. Stanton's presentation dealt with the changing dynamics of the American economy - particularly a widening gulf between the "haves" and the "have nots."

Stanton presented some thought provoking statistics that reveal that 48% of Americans polled in 2008 think the country is divided along economic lines, up from just 34% who felt that way in 1988.

What are the implications for produce marketers? "Have not" consumers will "trade down" on their choice for produce and shop price-oriented channels. What's more, Stanton boldly said the organic food movement has "jumped the shark" and is now waning. However, Stanton does buy in to the notion that the local food movement is here to stay.

All in all, Stanton tried to tailor the message to apple marketers . For example, what would "generic apples" look like as a price play? Can the industry sell more ugly apples like Europe does to achieve a better price point? How can the industry get more of a presence in dollar stores and convenience marts? A few misses in some of those speculations, perhaps, but Stanton's intelligent and thoughtful presentation braces the industry for an extended period of sober economic realities.