Pundit’s Mailbag —
The Role Of Produce Traders
Jim Prevor’s Perishable Pundit, January 26, 2007
Our article Cheaper Produce In Chinatown got a lot of attention, including this letter:
Indeed, all the talk of food safety leads to substantive questions about the role of the trader in the years to come.
In most cases, up till now, we have found the claims by retailers that they wanted to buy direct and only direct as much a soapbox speech as a reality. It was almost as if they were asking to be tricked. They seemed to be saying:
“Show us a Potemkin Village farm so we can see you are a farmer, but we really want a trader who will buy and sell, import and manipulate so that we are never, ever short product regardless of fires, floods, crop disease, hurricanes, freezes, tornadoes, earthquakes, etc.”
Now, however, the food safety focus moves us to a focus on an aligned supply chain. Indeed it could be argued that the whole purpose of an industrywide initiative is to help the little guy. If they want it, Wal-Mart, Safeway, Kroger, Supervalu, Sysco, McDonald’s, etc. can always get produce grown to the safest standards. They just order it and audit it.
It is to save the freewheeling nature of the business, to allow anyone to walk on a terminal market and know that everything meets established parameters that we need national food safety programs.
Our correspondent points out the inefficiencies that result when speculation is reduced or prohibited. His point is well taken.
In the Pundit’s sister publication, PRODUCE BUSINESS, we wrote a piece entitled Broker is not a Dirty Word that detailed the ridiculous and expensive things people did to avoid being labeled a broker.
And Richard’s point about the need for liquidity is sharp. One of the main differences between retailers and terminal market wholesalers when it comes to procurement is that, while retailers buy what they want, many wholesalers specialize in helping growers find outlets for what the growers need to sell.
We suppose that in the end, efficiency will prevail, and that if the world finds it better to kill off the speculators, then it will do so.
Yet the Pundit remembers going to visit the old Washington Street market with his father just before it was torn down for some more homogenized city buildings. We discussed the hope that the new market would be more efficient, yet the Poppa Pundit, even then, said that it might be more efficient but the city was also going to lose character, the floral market, the fish market, the meat market, the produce market, the hustle and the bustle, sights and smells, and the nighttime life — these were all things that added distinctiveness to city life.
If you take these markets away in exchange for more glass office buildings, you might build a more efficient city, but maybe not a better one.
So, if the speculator is banished and everything is sterile-packaged and goes seamlessly in an aligned supply chain from farm to fork, we may well have built a more efficient produce industry. But some of us, this Pundit included, will always wonder if we really built a better one.