In Europe, the season for open field cultivation is nearing its end. Dutch lettuce is mainly destined for export, and together with Belgian lettuce, these two countries are major suppliers to Germany. Although in general, good prices were made in the past summer, growers faced quality issues due to the weather. In Italy, the heat also reduced production, leading to shortages. In the south of France, the season started earlier, the mood is optimistic. At the moment, the United States are still dealing with a challenging market, where high temperatures boost consumption, but also put production under pressure. For the coming weeks, shortages are expected. In Australia, the situation is a bit better, although prices are under pressure.
During the summer months, fusarium left its mark on the lettuce season in the Netherlands. The fungus reared its head in several greenhouses, and is also wreaking havoc in the open field cultivation in countries like Japan, Italy and the United States. The consequences in the Netherlands were not so bad, partly because a part of the lettuce had already been harvested, and growers took measures to keep the fungus out. Seed breeders are also noticing the problems, and are working on the development of resistant varieties.
Dutch lettuce growers mainly look across the border
The iceberg lettuce acreage is stable at 2700 hectares, most of the harvest is sold across the border. Germany, United Kingdom, Poland, Scandinavia and Italy are a few big markets. The markets seem to be moving more and more toward fixed prices. The past season was characterized by bad pricing until mid-summer, after which shortages arose, causing prices to go up. The weather didn't help the growers of iceberg lettuce. The wet summer caused quality issues, and it remains to be seen whether the last August plantings will be harvested. The cold September month inhibited the growth of lettuce.
Greenhouse cultivation shifted in recent years from a few, often older, growers who produced lettuce in the winter months, to lettuce nurseries under LED lighting or on water gutter systems. Because of this shift, the acreage remains virtually the same. For growers on the field, fusarium remains a problem. Due to the fungus, not every grower is able to grow lettuce in the summer months. The sector is looking for solutions, steaming for instance. Despite the challenges, the growers look back on the summer months with satisfaction. In spring, the price was high, and in the summer months supplies from Southern Europe were low, resulting in good prices.
Partly due to the fusarium, interest in open field cultivation is on the rise. The production is currently handled by a few large companies that mostly grow for export. In the summer months, these growers can absorb shortages in the Southern European production.
Consumption of butterhead lettuce in the Netherlands is decreasing, but not in traditional export destinations like Germany, France and Belgium. In the Netherlands, delivery services do include butterhead lettuce more often in their range of products. Pre-cut lettuce and Asian vegetables make for more competition, but supermarkets still seem to value butterhead lettuce in their product range.
Belgian market quiet
The lettuce market in Belgium is calm this week, which also goes for the export market. In the coming weeks, the last head of open field lettuce of the season is traded. It will be followed by the greenhouse lettuce, which, as one trader hopes, will yield more "for the growers as well." In Germany, supplies are slowly decreasing, causing demand to arise. The warmer temperatures this week inhibit the decreasing production in Germany. Prices vary. On Monday, the lettuce still yielded 30 cents, a day later the price had risen by 10 cents, but there was also less supply at auction. On Friday, the price had gone down to below 30 cents again.
Tough summer for Italian lettuce growers
Just like 2014, 2015 will go down as a tough year. The cause of the problems is different, however. Last year, supply was high, leading to a decrease in price. This year, little produce was available from the main cultivation regions, especially Abruzzo. The heat was the main cause for the decreased production. Because of it, growers also had to irrigate more, creating ideal circumstances for various diseases and fungi. Diseases like Lettuce Mosaic Virus (LMV) and Tomato Spotted Wilt Virus (TSWV) had negative effects on cultivation. Toward the end of August, production had decreased by seventy percent, driving prices up. Despite the good prices, it wasn't a profitable year for growers, due to the low volumes.
Many growers tried to compensate for this loss with new planting, causing demand to surpass supply, so the market had trouble recovering. The shortage increased so much that shortages were expected for the entire month of September. The situation improved with the arrival of autumn, when Northern Italy entered the market with produce. A smaller shortage is still expected when the open field production season in the north will transition into the greenhouse production season. In the south of Italy, the new season is starting as well.
German market stable
The German market is about to switch from domestic production to import. Supplies of German lettuce are expected to decrease rapidly in the coming week, and imported lettuce will take over the market. At the moment, the transition has already started, and supplies from the Netherlands and Belgium are on the rise. Supplies from Spain are also coming. Prices are stable, a trader from Hamburg says. On the one hand, the colder weather lowers demand, on the other hand the autumn break causes increased demand in a number of states. For the coming months, a quiet market is expected, demand will increase again toward the Christmas holidays. In week 43, prices for iceberg lettuce were around 72 euros per 100 kilos, with hardly any difference between countries of origin. German lettuce yielded 71 euros, Spanish and Dutch 72 euros. For butterhead lettuce, the price difference was bigger between the Belgian lettuce, yielding 67 euros per 100 kilos, and the German lettuce, which yielded 49 euros per 100 kilos.
Season Southern France starts earlier
In the south of France, the season started earlier, which pleases growers. An early start means supermarket promotions can start earlier, and since the market is ready for new produce, the mood is optimistic. The season for all lettuce varieties has begun, most of the lettuce is harvested between November and April/May. Only the frisée is grown year-round. Because of fixed price agreements with supermarkets, there is little difference in price. Only if overproduction ends up in the free market, or if a supermarket wants to buy different volumes, prices will change, but there's no question of that at the beginning of the season. In the north of France, the season is drawing to a close. Supplies are going down, but there are still volumes available. The biggest competitor for the French lettuce sector is extra service and shelf life.
Competition puts prices romaine lettuce Australia under pressure
The market for romaine lettuce and iceberg lettuce in Australia is generally good. Iceberg lettuce is a "commodity" though, according to one grower, which leads to fluctuating prices. The market is moving more toward packaged lettuce, which also improves shelf life. The market, especially in the south of the country, is characterized by a lot of competition. One grower says he feels the pressure on prices for romaine lettuce, of which he offers a red and green baby variety packaged together. During the high season, between November and April, he supplies 2000 boxes with 10 duo packagings to supermarkets each week. In the off season, this supply is halved. In ideal circumstances, a box should yield around 14 dollars, but under pressure from competitors, the price can go down to 10 dollars. Other provinces with high lettuce production, like Queensland and Victoria, also supply a lot of lettuce, putting prices under pressure.
The open field cultivation in the south faced warm and windy weather in recent months, as well as cold and wet weather.
US expecting shortages due to warm weather
Exceptionally warm weather in Central Coast, California causes lower yields for lettuce growers. California is currently the main producer of lettuce, in the coming time the production will shift to Arizona. Demand for romaine lettuce is good. Because of a combination of high demand and lower supply, prices are good. The warmth is causing production issues, accelerating the growth of the lettuce. So a shortage is expected to arise eventually, due to the current high production. Arizona isn't able to step in, a storm destroyed part of the cultivation, and lower production is also expected for the Imperial Valley. So the shortages are expected when the season changes from Central Coast to Arizona.
Every week, FreshPlaza publishes an overview of the market situation of a product in a worldwide context. With these articles, we're aiming to give an idea of a global market that's becoming ever smaller as a result of globalization. Next week, the spotlight is on apples.