Consumers, of course, are not the only ones affected by inflation.
From grower-shippers and brokers to logistics providers and receivers, there have been plenty of headaches.
“We’re seeing rising costs in all parts of our operations, such as freight, fertilizer, labor, and packaging materials,” mentions Jim Roberts, president of sales at Naturipe Farms, LLC BB #:116078, headquartered in Salinas, CA.
John Bishop, national buyer for produce specialty companies at Fresh Start Foods Canada Ltd. BB #:190774 in Milton, ON, is on the same page. “The price of fuel has a huge impact on the cost of goods and what we pay for things—it touches just about everything we do.”
The same is true for packager Ag-Box Company BB #:154212 in Oceano, CA. “We’ve had numerous price increases from our suppliers, some that seemed extravagant,” recalls Debra May, general manager. “Lumber prices have fallen, and logically paper should have followed, but we’re not seeing it at this point.”
Equipment and parts
“The supply chain has been very challenging, especially for offshore purchasing, but the situation has improved slightly,” says Bishop, citing the lockdown in China in April and May 2022 as particularly troublesome.
There were good weeks and bad weeks, he says, and sometimes “it’s the things you’d never think you’d have problems with,” he admits. “We’re still having issues with parts for equipment.”
Adds Marshall Kipp, president and CEO of Advanced Transportation Services, Inc. or ATS BB #:120506 in Visalia, CA, “We’re constantly looking at the cost of equipment. Inflation is 8.5 percent, but tractor-trailers are up 35 percent—it forces efficiencies.”
Exeter Engineering, Inc. BB #:167364, based in Exeter, CA, buys materials from Asia and has seen lead times of four to five months for parts instead of six weeks. Electrical components have been even worse, taking nine to ten months rather than the usual two months.
“We’ve done what we can, but in the end, you have to learn to live with it,” says Boomer Batchman, president of the company.
“Things had gotten much better over the course of this summer,” says May. “Our suppliers’ lead times shrank significantly from the months-long lead times of winter and spring. However, we’re now looking at a few hiccups in our supply chain as suppliers are having some shortages. Thankfully we’re not looking at the extended lead times we had earlier this year.”
She notes that rail issues seem to be the main cause as of late 2022.
Planning for the future, however, won’t be easy. “Predicting and budgeting transport costs will be a challenge,” notes Ed Treacy, vice president of supply chain and sustainability for the International Fresh Produce Association (IFPA) BB #:378962 in Newark, DE.
This is an excerpt from the cover story in the January/February 2023 issue of Produce Blueprints Magazine. Click here to read the whole issue. https://apps.bluebookservices.com/BBOS/LearningCenter/BP/January%202023/eBook/index.html
