NEWSLETTER ARTICLES

Small Farms and Specialty Crops


From our Central Coast Agriculture Highlights newsletter
August 1998

EDIBLE POD PEA MARKET REVIEW

by Mark Gaskell

I have recently summarized edible pod pea prices for the past two years. I have used weekly prices quoted on the Central Wholesale Market in Los Angeles and then deducted 33% to approximate Central Coast farm gate returns. It is important to recognize that there tends to be an innate bias on the high side to these prices even when high and low prices are quoted. This is because USDA Market News Service contacts produce wholesale houses for these figures and many are interested in buoying market prices on a daily basis. They tend to quote on the high side of actual sales averages. Additionally, the actual mechanics involved in selling often mean that average sales returns may not reflect the market average on a given day. For example if 100 boxes are shipped, 75 may go out at or near the market average, whereas 25 (or some percentage) often linger in the wholesaler’s cold room for a day or two and are eventually discounted to move the product out and make room for new product.

I have discussed in several previous columns the overall pessimistic picture for sugar peas. This is because the pea market has "matured" in recent years and consumption has leveled off or even fallen in some cases. The ready availability of nappa and many other ethnic fresh vegetable products likely contributes to some of this decline. Additionally, many other domestic and offshore growing areas are now growing peas and competing with Central Coast growers for a small market.

The price histories are summarized in Figures 1 and 2 for 1997 and 1998. These "farm gate" prices are estimated by subtracting 33% from USDA Market News Service data for the Los Angeles Central Wholesale Market. A pattern of relatively low prices has continued (from 1995 and 1996) to hold much of the year during 1997 and 1998 with the exception of an extended period of attractive prices in the fall 1997. This was because of a shortfall in pea volume due to high temperatures, diseases, leaf miner, and El Niño-driven bad weather in offshore areas. In other words, prices were high when no one had peas.

Sugar snap pea prices generally are better than sugar pea prices but much smaller volumes are sold and the market is easily saturated. There are decidedly better prices early and later in the year. These are the periods when offshore product is available from Mexico, Peru, and Guatemala. There often is a small price premium for offshore product as these growers use lower cost labor to more rigorously select peas and to ship smaller sizes which are prized by many buyers. Larger growing and marketing operations may justify growing peas because they make enough on the marketing of the product and find it complements their product line.

Growers may have a different view. They should look at these pea price histories carefully. If you are growing peas for some other reason than making money, by all means stay in there. If you can make money at $5 or less per box, by all means stay in there. Or perhaps you will simply choose to keep growing peas because you enjoy the risky world at the peas gaming tables.

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