Vegetable prices climb for area businesses

Severe weather storms have left local restaurants and grocery stores owners with two choices for buying wholesale vegetables, raise prices or absorb the loss.

The hurricanes that swept through Florida and the heavy rains that hit California in November heavily damaged vegetable crops in those states.

In California the pickers couldn’t even get into the fields, which were covered in solid mud, said Doug McLeod, the produce manager at The Star Store. So the pickers had to leave many vegetables rotting on the vine.

To compensate for the crop losses, wholesale vegetable prices rose for the last several weeks, often changing from week-to-week.

Joe Parsons, the Deputy Director of the Washington ag statistic service, said the average wholesale cost for 100 pounds of tomatoes rose from about $37 in August and September to about $71 in October to a preliminary figure of $99 in November. Lettuce increased from approximately $17 in August to a preliminary figure of nearly $32 in November.

He did not have the statistics for the wholesale prices on peppers, which also rose in the wake of the storms.

McLeod said the high consumer demand, especially with the Christmas and Thanksgiving holidays, also contributed to the higher prices. “Supply and demand was so great, even the prices on those vegetables coming out of Mexico are high,” he said.

With local grocery store and restaurant owners relying on those state’s vegetable crops in the fall and winter, especially California’s since it lies on the west coast, they were forced pay the higher wholesale costs for fresh vegetables. In addition, restaurant and grocery store owners said more vegetables are arriving rotten, forcing them to send it back

Rising fuel costs for transportation added to the cost of vegetables as well.

Local grocery stores and restaurants owners then had to pay the higher costs and chose to either make large or moderate increases prices. Both decisions seemed to prove costly. Business owners that chose to raise prices lost customers because the customer did not want to pay the higher prices. The business owners who did not raise costs as much had to absorb the loss between what they paid and what the customer paid.

McLeod said at the Star Store said tomatoes cost between $1.29 to $1.49 a pound before November. Within the last couple weeks, however, The Star Store was paying more than double that ammount and selling them for approximately $4 a pound.

That trend seems to have ended, with prices dropping below $4 this week, he said. But for several weeks, tomato and pepper sales suffered. “For a while it was just awful because people didn’t understand it,” McLeod said of the price raises.

Payless Produce Manager Ryan O’Keefe said wholesale prices reaching as high as $3.98 a pound. Rather than raising the price on to customers, though, O’Keefe said the decision was made to keep the prices under $4. Payless Foods then had to “suck it up” he said of the loss in revenue.

Cafe Langley co-owner Shant Garibyan — who said they use tomatoes in 70 to 75 percent of their meals and red bell peppers in 60 percent — followed a similar approach to Payless Foods. He said he and his brother Archie have decided not to raise the price of meals.

Higher vegetable costs does not mean businesses should cut down on the quality of the food, he said. But they do keep a close eye on ensuring that food is not wasted.

The decision not to rise prices, along with a slow down in tourists eating there , rising fuel costs for transportation and the pending rise of the minimum wage to $7.35 an hour on Jan. 1 may hurt their business.

Overall, restaurants should have a profit margin of 10 percent a year, but Garibyan said he and Archie may make less than that. To cut costs, he said staff may need reducing, which will give the customers less individual time with the restaurant staff.

“People are the losers in the end,” he said.

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