Jacob Kremple

But I'd say in general in produce, this is like a very much a normal working environment for my team of just prices spiking and going crazy here and there.

And I think a lot of that is produce demand, especially in the U.S., is rather inelastic in the short term.

And it's so reliant on weather.

and acreage grown and the production out of that acreage that you see very wild swings in markets all the time, right?

Like tomatoes was the last thing to pop.

I guarantee this summer you're going to be hearing about romaine again because that's already almost $100 a case right now, which is insane for romaine because of bad weather in California and avocados as well.

Avocados went from $30 a case to $80 a case in literally the span of a week in the last week.

Yeah, so let's maybe break this down a couple different ways.

You have your retail price point that a customer sees.

Let's save that for a second.

Let's talk about the wholesale price of what a going price of a tomato should be if you're going to go directly to a farmer and buy half a truck of tomatoes.

For that piece, there's all the costs they have to grow.

So you're talking fertilizer, seed, labor.

water, the production costs around their facility, the energy and the trucking, right?

Those are the base things that go into growing a tomato, right?

So they have a base cost that they have to hit every year to just break even, right?

The way that market works is then usually typically they're gonna contract a certain portion of it to try to make sure they get a guaranteed return to make some profit.

And then they're going to call that 60, 70%.

The rest are going to try to play on the open market, which means whatever the USDA price is going right for what a wholesale tomato should be.

That's what we're going to sell the rest of the 30% at, right?