Wednesday, January 16, 2013

Marketing 101

The frozen tundra of Yuma, Az. is the latest challenge for produce sales.  After seeing more pictures of frozen lettuce yesterday, it seems like a no brainer the market must go up.  It would seem like shippers with No. 1 lettuce should be able to name their own price.  But wait, it seems the frozen lettuce is not unsaleable after all!  Most of the shippers have decided they will peel the lettuce back to the unfrozen core and sell whatever is left at whatever price they can get.  They are quoting lettuce with "heavy frost damage" and taking whatever they can get for it.  For shippers with good lettuce this creates a marketing problem.  There should be a huge difference in price for good lettuce as opposed to the drek being shipped by the majority.  However, the price for the crap is verging on $30.00/carton FOB, and there seems to be little incentive for receivers to pay more, even if the difference is night and day.  Probably the majority of loads quoted with freeze damage will be discounted at destination, or worse, but that is cold comfort to quality shippers who should be enjoying historic markets.

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