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  • Matt Wampler

Lettuce Crisis Continues as INSV Devastates Salinas Valley Crops


December 29th, 2022


Lettuce shortages have been plaguing restaurants in the United States for months, resulting in menu adjustments and higher prices for customers. The main cause of the shortage is a crop disease called Impatiens necrotic spot virus (INSV), which is spread by thrips and attacks lettuce plants. The disease, which has been present in the industry since 2006, has been exacerbated by unseasonably warm weather and prolonged stress on the plants, according to the Grower-Shipper Association of Central California.


Impatiens Necrotic Spot Virus (INSV)


The Salinas Valley, which accounts for more than half of the country's lettuce and is worth over $1 billion, has been particularly hard hit by INSV. Pesticides have had limited success in controlling the thrips, and organic crops are not allowed to use chemical sprays. As a result, producers are facing significant financial losses, and consumers can expect to pay higher prices for lettuce at restaurants and grocery stores.


"The impact of this is huge," said Tony Alameda, manager at Topflavor Farms in the Salinas Valley. In 2020, the Grower-Shipper Association estimated that INSV cost lettuce producers $100 million in lost revenue. Many industry experts expect the losses to be even greater this year.


Lettuce Shortage


The lettuce shortage has forced restaurants to get creative with their menus. Taco Bell, Chick-fil-A, Subway, and Panera are among the chains that have warned customers of potential lettuce shortages and have made adjustments to their menus as a result. Some restaurants are charging a surcharge for leafy greens, while others are reworking dishes to exclude lettuce or using alternative ingredients.


"It's been a challenge to get the product that we want and need," said Scott Rotolo, a Pizzeria owner in Louisiana. "We've had to change our salads and substitute different greens."


The lettuce shortage has not only caused issues for restaurants, but it has also had a significant impact on the supply chain. Many farmers have had to destroy infected crops, leading to a decrease in the overall supply of lettuce. This, combined with the increased demand for lettuce due to the rise in home cooking during the pandemic, has caused a significant strain on the supply chain.


"We are seeing some shortages in the supply chain due to the reduced yields that growers are experiencing," said Mary Zischke, INSV task force leader at the Grower-Shipper Association of Central California. "We're doing everything we can to minimize the impact on our customers."


The lettuce shortage is expected to continue for the foreseeable future, as it takes time for new crops to mature. In the meantime, restaurants and consumers can expect to see menu adjustments and higher prices for lettuce-based dishes.

"It's a very challenging time for the industry," said Jennifer Clarke, executive director of the California Leafy Greens Research Board. "Growers are doing everything they can to mitigate the impact of INSV and continue to produce high-quality lettuce for consumers."


Disruptions


The United States is facing a number of disruptions in its food supply, in addition to the ongoing lettuce shortage caused by Impatiens necrotic spot virus (INSV).


Wheat shortages: Wheat prices have been on the rise due to drought and heatwaves in key producing countries like Russia and the United States. The United States Department of Agriculture (USDA) expects the country's wheat production to fall to a 30-year low this year.


"We've seen a decline in wheat production and an increase in demand for wheat-based products, particularly due to the pandemic," said Vicky Pruitt, a spokeswoman for the National Association of Wheat Growers. "This has led to higher prices and tighter supplies."


Rice shortages: Rice prices are expected to remain high as long as export duties imposed earlier this year by India, the world's largest supplier, remain in place. In addition, the ongoing drought in Thailand, the world's second-largest exporter, is expected to result in reduced supplies.


"Rice availability in most exporting countries is pretty thin except India, but it has export duties in place to reduce sales," said a Singapore-based trader at an international trading company. "If we get a production shock in any of the top exporting or importing countries, it can really swing the market upside."


Pork shortages: Pork production in the United States has been hit by the African swine fever outbreak in Asia, which has resulted in reduced exports. The USDA expects pork production to fall by 5% in 2021, leading to higher prices for consumers.


"The African swine fever outbreak has disrupted global pork markets and has led to tighter supplies and higher prices for pork in the United States," said John Newton, chief economist at the American Farm Bureau Federation.


Egg shortages: The United States has experienced intermittent egg shortages due to the ongoing COVID-19 pandemic, which has resulted in the closure of some egg-producing facilities and the reduction of others' capacity. In addition, the high demand for eggs during the pandemic has strained supplies.


"We've seen a surge in demand for eggs due to the pandemic, with more people cooking at home and using eggs in their recipes," said Chad Gregory, CEO of United Egg Producers. "This has led to intermittent shortages and higher prices for consumers."


It is unclear when these disruptions will be resolved. The INSV outbreak is expected to continue affecting lettuce production in the United States for the foreseeable future, and other disruptions may also persist due to ongoing factors like the COVID-19 pandemic and climate change.


An Optimistic 2023?


It appears that the logistics industry is expecting better prospects for 2023, with the hope that many of the issues caused by the COVID-19 pandemic and a nationwide strike by railroad workers will be resolved. According to the Council of Supply Chain Management Professionals, freight volumes for sea, air, and trucks are expected to decline in 2023, with freight rates for all three modes also expected to drop from their pandemic highs.


The USDA forecasts that US wheat, corn, and soybean exports will decrease in 2022-2023 compared to the previous year, which is likely to have an impact on freight demand and rates. However, some sources have noted an oversupply of bulk freight capacity, particularly for ocean freight, which could potentially lead to a price war in 2023.


The trucking industry is expected to see a decline in spot truck rates in the first quarter of 2023, with a potential drop of 25-35% from January 2022 by the end of the year. Despite this, the trucking industry remains optimistic about the future, with the American Trucking Association forecasting growth in trucking jobs and revenue in 2023.


Overall, the lettuce shortage in the United States is expected to continue for the foreseeable future, with restaurants and consumers facing menu adjustments and higher prices for lettuce-based dishes. The main cause of the shortage is Impatiens necrotic spot virus (INSV), which is spread by thrips and attacks lettuce plants. The disease has been exacerbated by unseasonably warm weather and prolonged stress on the plants.


Pesticides have had limited success in controlling the thrips, and organic crops are not allowed to use chemical sprays. This has led to significant financial losses for producers and a strain on the supply chain. In addition to the lettuce shortage, the United States is also facing wheat and rice shortages due to drought and heatwaves, as well as a potential shortage of avocados due to a freeze in Mexico. It is important for the food industry to find ways to mitigate the impact of these disruptions and ensure a stable supply of food for consumers.

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