Spotlight on the Midwest: Always within reach

The Midwest, long known as the nation’s heartland, is largely associated with grains, legumes, and corn for feed or ethanol, not sweet corn. But the area is a significant producer of seasonal fruits and vegetables, including cherries, apples, pumpkins, beets, cabbage, and yep, sweet corn.

While being the geographic center of the country provides easy access to all corners of the United States, plus Canada and Mexico, the Midwest, like other growing regions, faces the high costs of labor, distribution, and the ongoing uncertainty over tariffs.

Middle Moves

“Being located in the Midwest gives us a number of key advantages,” notes Jordan Grainger, vice president of sales for Ben B. Schwartz & Sons, Inc. BB #:104793, a Detroit, MI-based receiver and importer in business for more than a century.

“We’re centrally located to serve multiple markets in the United States and Canada, as well as having proximity to high-quality, locally grown crops. We have border access in our backyard, which means we’re able to both ship and receive product with minimal friction.”

Henry DeBlouw IV, CEO of Butch’s Best, LLC BB #:361495, a distributor and fresh-cut processor, is content to serve his customers from Capac, in eastern Michigan, about 55 miles north of Detroit.

“You can’t double-crop like in Tennessee, but the Midwest is great for cold weather crops,” he says.

Of course, that doesn’t mean life is easy. “There are still challenges and you always hear about another farm going out of business due to the cost of production and retailers wanting the price to stay the same.”

Butch’s Best sources from nearby growers and cultivates a few crops of its own. This year channeled nostalgia with 15 acres of rhubarb planted in nearby Romeo. DeBlouw says he’s careful not to compete with his growers, and this includes next year’s proposed crop, organic hard squash.  

Other items of note were adding trimmed green beans to the fresh-cut program, and continuing to showcase pumpkins, which are on an upswing. Last year saw the addition of hand- and machine-painted pumpkins, which produced sales of over $1 million. DeBlouw is hoping for a 10 to 15 percent increase this year.

Ups and Downs

The season has been challenging for Vee’s Produce, LLC BB #:138420 admits Jason Vee, president of the Superior, WI-based broker and distributor of potatoes and onions, citing low market price on onions. But quality has been good and yields are high. 

“That’s usually the recipe for low markets,” Vee explains. “In some cases, our market price is about half of the five-year average.” 

His biggest challenge is finding margin amidst competitive pricing. “When it’s been this low for this long, there isn’t much meat left on the bone for a sales company like mine that works on 5 to 10 percent margins.”

“There’s a thought pattern, a feeling, that you can pass your costs on to your customers—and you can—the question is will enough customers come through and buy your products.”

A bright spot is the addition of FreightFlow to the company’s logistics department. “It does everything we need in logistics and probably increased our workload capacity by 100 percent,” praises Vee.

Transportation is the name of the game for Total Quality Logistics, LLC BB #:203922, headquartered in Cincinnati, OH.

The summer’s high heat and humidity across the Midwest challenged refrigerated trailer equipment, notes Kerry Byrne, president. “We’ve been very careful about selecting carriers with well-maintained and newer systems to avoid breakdowns and potential claims.”

Bryne adds that strawberry volume, which shifted a few weeks due to weather, wound up providing the ideal growing conditions for other fruits and imports. “We’ve seen particularly high harvest yields and quality bound for consumers,” says Byrne.

Joan Daleo, president of Ole Tyme Produce, Inc. BB #:119116, a St. Charles, MO-based receiver and distributor, has had concerns about reefer truck availability this year too. As far as what’s trending, she says pink pineapple continues to make a big splash, gaining more traction than seedless lemons.

Ongoing market weakness, however, is creating instability and affecting credit, especially credit terms. Ole Tyme Produce is managing well enough, but Daleo says it’s tough being an independent distributor in a world that continues to consolidate.

“There’s a thought pattern, a feeling, that you can pass your costs on to your customers—and you can,” she observes, but cautions, “the question is will enough customers come through and buy your products.”

No such worries for Dominic Russo, general manager for Rocky Produce, Inc. BB #:104786 in Detroit. He says this year is steady and “pretty well balanced.” As a longtime receiver in the Motor City, the company handles a broad range of fruits and vegetables with two exceptions: no bananas or mushrooms.

“We’re able to get and source everything we need,” comments Russo. He’s always a fan of Michigan’s local crops, especially its homegrown vegetables.

Tariffs and Trade

Tariffs and the volatility they bring are another hurdle.  

Ron Petersen, president and CEO of Carlisle, IA-based Summertime Potato Company BB #:101804, a grower, repacker, and shipper, says tariffs will impact his B-sized potatoes this year. Consumers will see an increase in price and Summertime will absorb some of the cost too.

“It’s unfortunate—we want to get our customers a fair and competitive price. Tariffs will definitely impact prices in a negative way,” Petersen points out, noting growers and shippers are trying to protect their businesses.

Competition remains stiff. “When we land a new customer, their business means the world to us,” he adds.

For Minneapolis, MN-based WPS Fresh, the new name of Wholesale Produce Supply, LLC BB #:100593, a receiver, importer-exporter, and fresh-cut processor, there are both positives and negatives to tariffs according to Jeremy Taylor, vice president of sales and marketing.

He says the company tries to mitigate the higher costs with improved efficiencies. “It’s the only thing we can do,” he explains. “It’s forced us to have more conversations and uncover opportunities we didn’t know were there. Maybe without tariffs we never would have looked at it differently.”

Fortunately, WPS Fresh’s fresh-cut business, aptly called Go Fresh, is growing and doing exceptionally well. “The sky’s the limit,” enthuses Taylor, noting he wouldn’t be surprised if business doubled in the next few years.

“We’re always thinking two steps ahead to make sure we have solutions in place before we need them.”

Upgrades and Outlook

As the flow of summer crops slows, there’s still plenty of excitement in the Midwest’s produce sector for fall and beyond.

At Ben B. Schwartz, better technology is a game-changer. The biggest change over the last year is upgraded bagging and repacking services, resulting in growth for the company’s citrus, potato, and onion categories.

“This is something our customers value and it eliminates another layer of work they would traditionally have to outsource,” shares Grainger.

“With these capabilities, we consider ourselves a one-stop solution for our customers to get the best quality produce exactly how, when, and where they need it.”

The company also is expanding into new regions between Toronto and Atlanta and launched a proprietary enterprise resource planning system. Like many produce operators, Grainger says: “We’re always thinking two steps ahead to make sure we have solutions in place before we need them.”