(Nov. 20) Some lettuce buyers in mid-November were paying about 15 cents more per pound than they were early in the month, as desert lettuce shippers reacted to f.o.b.s that reached as high as $50 by Nov. 20.

Dole Fresh Vegetables Inc., Salinas, Calif., informed its buyers in a Nov. 14 memo that since October, the Huron, Calif., and Yuma, Ariz., regions had experienced “abnormally warm weather.” Dole officials said the heat had affected quality and produced “below-normal yields.”

In response, the shipper temporarily increased its lettuce prices Nov 17. Shredded and chopped lettuce prices were increased $3; salad mix and salad with separate bags were increased $3; and chopped romaine, salad mix with romaine and romaine and iceberg mix rose $2.

Phone calls to Dole were not returned.

ACT OF GOD?

Contracts in mid-November were not being honored because many shippers deemed September and October heat as “an act of God,” said Ron Orr, director of merchandising at Jefferson City, Mo.-based Menu Maker Foods Inc. Sixty percent of the company’s lettuce is shipped on contract.

Orr was skeptical of the price increase.

“Because there is a short crop or a supply gap, that’s not an act of God, that’s an act of greed,” Orr said. “Why should that increase always be slam dunked to the end user?”

Pure Pacific Organic LLC, Salinas, Calif., is among the desert lettuce shippers that are increasing their prices.

Fixed contracts are being honored, but the company has escalator clauses set in some of its contracts, which allow prices to increase after a certain f.o.b. is reached in the industry, said Tom Russell, president of Pacific International Marketing Inc., a division of Pure Pacific.

The escalator clauses have a maximum price of about $20-22, Russell said. The maximum price has been reached for customers that have the contracts.

STRUGGLING TO SUPPLY CUSTOMERS

The company is now struggling to supply those customers that have fixed contracts, such as large quick-service restaurants, Russell said.

“Those are what we’re scrambling to cover this morning,” Russell said Nov. 20. “My partner’s heading down to look at a 20-acre block of lettuce with an empty check in his hand to see if he can buy it and cover our customer. He’ll probably have to pay as much as $20 a box, $25 a box, in the field, unharvested.”

Steve Davis, salesman for Mills Inc., Salinas, said cartons of iceberg ranged as low as $30, but he had heard a report of one supplier quoting $50 a case on Nov. 20.

“With all of the processors needing volume, they are going through the acreage pretty quickly and buying all they can, because they need the product to keep orders covered,” Davis said.

Prices the first week of November, when desert lettuce harvests started, were $17-18 for 24-count iceberg. In mid-November, iceberg 24s were $18.10-22.60, and romaine 24s were $14.10-16.10, according to the U.S. Department of Agriculture.

Prices for iceberg lettuce in late November 2002 were in the $5-6 range.

Russell said f.o.b. prices had increased from about $14 on Nov. 14 to about $40 on Nov. 20.

“If you’ve got 10,000 lettuce (acres), and 7,000 of it’s going on your contracts — you’ve only got three loads left — (you) might as well go for the moon and see who will pay. If not today, tomorrow,” he said.

$25,000 AN ACRE

During the week of Nov. 17, Russell said one of Pure Pacific’s growers had been offered $25,000 an acre for one of his lettuce fields. A good deal any other time would be about $3,000 an acre, Russell said.

Misionero Vegetables, Salinas, had not increased its lettuce prices to contracted customers as of Nov. 20.

“We’re fortunate that we’ve had good supplies all along and so we’ve maintained all of our prices on our foodservice items,” said Greg Gattis, vice president of sales and marketing for the company.

The December crop, though, might bring a different story, Gattis said.

“We’re walking all the December fields right now trying to get a handle on that, but so far, so good,” he said.

So far, Gattis said he hopes an act of God clause won’t be an issue for Misionero.

“I know that’s what the other guys are calling it,” he said.

Pure Pacific’s Russell said he doesn’t believe high temperatures this season warrant an act of God clause.

“This is no act of God,” he said. “It’s not like there was a hurricane or a flood.”