Grower-Shipper Interests Are Intertwined During These Volatile Times

Pre-Season ground prep work was completed in late-2021, first-turn plantings have been well under way since November, and harvesting of early Cole crops have begun in earnest.

For Tri-County vegetable growers their cycle of implementing their standard cultural practices for the 2022 growing season has been under way since late-2021. The standard fundamentals of “blocking and tackling” to successful growing will evolve seasonally, ranging from pest management practices and field labor time management to updated food safety requirements, to highlight a few.

For the upcoming 2022 growing season, however, costing standards will be taking a dramatic upturn. Unlike prior pre-pandemic seasons, the 2022 season backdrop is a continued convergence of worsening supply chain hurdles and inflationary input cost increases.

Unlike this time last season, the uncertainty of whether the cost increases would be transitory or persist and continue to increase is now self-evident. As reported by the U.S. Bureau of Labor statistics, the benchmark for measuring national cost increases, the CPI-U, has increased to 7.9 percent over the prior 12 months.

The current events unfolding in Ukraine only exacerbate the already-challenging supply-chain situation. For growers, predicting what some of their direct input growing costs, such as seasonal fertilizer requirements or any petroleum-based by-products, is proving to be “best-guess work,” even for as short a period as three to four months in advance.

The old local adage of “What’s good for the shipper is good for the grower” is generally still true. Because the grower-shipper interests are intertwined, namely partnering to supplying the highest quality, healthiest and safest vegetables at a competitive value proposition.

Many of the aforementioned grower-shipper relationships are deep-rooted and have covered the course of generations in some instances. The foundations of these relationships have been based on trust, mutual respect, and business execution in good years, in which both realize profitability in order sustain their respective operations. To this end, with the intent to ensure growers’ direct inflationary growing costs as well as packing and manufacturing shipper and processing costs are “passed through” to the buying community via finished fair price increases.

The growing community applauds the unusual yet vital measure the shipper and processing community has taken with this action. The grower community could no longer absorb the steep inflationary cost increases on top of the annual margin compression driven by input costs outpacing general contract price increases of the past decade. These actions will make the old adage shift to “What’s good for the grower is good for the shipper AND processor.”

Load More Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

Organic Industry Experiences Benefits of TOPP Firsthand

Grassroots networking and communication are key to spreading the word about opportunities …