Current activity in the domestic mint market is more consistent across growing regions but is still variable by species, so will be reviewed by species in this section.
Peppermint acres continue to be on a slight decline from 2022, for several reasons. First, several years of lower prices due to higher grower held inventory have predictably resulted in acres being shifted to other crops, as held inventory levels have been consumed. While fewer regions are experiencing irrigation restrictions, others are still lacking disease free ground into which peppermint can be rotated.
Second, the combination of inflationary pressure that has raised mint input costs 30-50% and the concurrent price strength of commodities like corn or wheat have continued to shift grower focus to less input-reliant crops that offer a better return.
Last, the same inflationary pressures (including the interest cost of held inventory) that have affected peppermint prices have also softened regional buying volumes and created more grower held inventory than was seen one year ago. This has resulted in a slight reduction in contract and spot prices for peppermint as we look to the 2024 crop. While planted acres and inflation continue to play a role in pricing, it appears the price peak seen in 2022 has begun to subside.
Based on the factors above and the respectable yield from the 2023 crop, current estimates show that conventional peppermint prices should help validate additional production and contracted volumes by mint dealers. There has also been an increase in planted acres for proprietary peppermints in response to prices, indicating that the ultimate balance between conventional and proprietary mint is continuing to shift gradually away from conventional peppermint.
Recent waning demand from buyers has pressured growers to reduce planted acres to mitigate rising held volumes. The Spearmint Marketing Order has also maintained reduced saleable percentages (currently <30%) as a continued buffer to price volatility but acreage changes are the most stabilizing price influencers for growers in the region. Overall, there are good spot opportunities to purchase open oil and contract prices are softening from the 2022 peak, and settling.
It is projected that Scotch spearmint acreage will continue to decline in the Yakima region. This trend continues to be influenced by the relatively abundant supply of Scotch spearmint, particularly from Canada, as well as better returns from alternative crops. A saleable percentage of <30% will help mitigate significant price changes, and estimates are that new contract prices should parallel that for native spearmint.
NOTE: Because different regions respond differently to our requests for information, we cannot guarantee that all presented information (and more particularly, the speculative projections we make with the information at hand) is 100% accurate.
Other current issues like global inflation on goods/services and regional conflict are having their own impact on the global supply chain and costs of goods.
Author: Matt Fagerness- Purchasing Manager