Retailer demands increase prices

Halloween icon retains popularity amid recession

By MATEUSZ PERKOWSKI

Capital Press

Consumers have cut back on Halloween spending by more than $1 billion this year, but pumpkin grower Art Perry said he isn't worried about dropping sales.

"Even in tough times, we need to have some happiness," said Perry, a farmer in San Joaquin County, Calif., the state's major pumpkin-growing area. "In the scheme of things, a pumpkin is not an expensive item."

According to the National Retail Federation, U.S. consumer spending on Halloween costumes, candy, decorations and greeting cards in 2009 is expected to drop nearly 18 percent, from $5.77 billion to $4.75 billion.

Even so, commercial pumpkin growers who sell to retailers and distributors are reporting steady demand and decent prices.

"We've sold out this year," said Tom Trapold, a pumpkin grower in Sauvie Island, Ore. "The pumpkins have been really good."

Growers generally credit the crop's economic resilience to its relatively low cost and high nostalgic value.

"It's an American tradition," said Perry.

Ryan Van Groningen, whose family also grows pumpkins in San Joaquin County, Calif., said the farm's sales are on track despite the recession.

"I don't think any family is going to go without pumpkins," Van Groningen said. "We're noticing a good late rush right before the holiday, which means sales are going well for the retailers."

Those results don't surprise Ernie Spada, vice president of the United Salad Co., a produce packing and distribution firm based in Portland. The pumpkin market has remained largely impervious to economic ups and downs over the years.

"I haven't seen tremendous growth, but I haven't seen it shrink, either," he said.

In the past five years, production in the six largest pumpkin-growing states has hovered between 45,000 and 50,000 acres, with farmers consistently generating more than 1 billion pounds a year, according to the National Agricultural Statistics Service.

California produces the second-largest volume of pumpkins in the U.S., behind Illinois. Other major contenders include Pennsylvania, New York, Michigan and Ohio.

On average, farmers received about $0.13 per pound in 2008, which translated to more than $3,000 per acre, according to NASS. That's up from about $0.09 per pound five years ago, a 44 percent increase.

Prices have stayed strong in 2009, ranging from about $0.12 to $0.14 per pound, according to several growers.

Actual profits vary from farmer to farmer, since yields tend to be even more volatile than the costs of production, Van Groningen said.

"That's where you really find it to be profitable, breakeven or a losing venture," he said.

Although U.S. pumpkin production has been relatively stable in recent years, that doesn't mean the industry is stagnating. Supplying retail outlets has become increasingly more complex, Spada said. "The rules of engagement have changed."

Traditionally, many farmers would casually plant spare patches of ground to pumpkins and sell whatever they produced, said Sharon Herr, sales manager for Fewel Farms, a pumpkin operation near Prosser, Wash.

These days, growers are expected to meet retailers' specifications for size, labeling, packaging and other factors, she said.

"Pumpkins aren't sold like they used to be," she said. "There is no demand for a random pumpkin anymore."

Retailers want more uniformity, so growers must categorize pumpkins according to size, packing them in separate, standardized bins, Perry said.

"There's a lot more involved with packaging," he said.

Pumpkins are also labeled with a product look-up code, or PLU. The stickers convey information about the pumpkin's size and price during checkout.

In the past, clerks had to weigh each pumpkin to determine its price. Now, stores generally sell them on a per-unit basis, which improves efficiency.

Meeting the retailers' specifications has made the growers' job more complicated, but the extra effort is well worth it, Perry said.

By easing the distribution and sales process, farmers have been able to obtain higher prices and increase their sales volumes, he said.

"If it helps the system work, then it's a good thing," Perry said.

Staff writer Mateusz Perkowski is based in Salem, Ore. E-mail: mperkowski@capitalpress.com.