Believe it or not, things at Adams Cold Storage aren’t going that bad. It’s probably that way in a lot of your businesses, too.
Don’t get me wrong, it’s not like things are normal — if we’re defining “normal” as pre-pandemic — but there are faint echoes of what once was hanging in the air. However, even when things aren’t half bad, I can still see difficulties all around the edges of our industry, and I’m sure you can, too.
Here’s an example. Our customers are beginning to receive and ship goods at a pretty regular rate these days. Our state-of-the-art facility has been running either at capacity or near capacity for the past month or so. That’s good for us. It’s also a sign that our client partners are starting to move products. That’s good for them.
But here’s where it gets complicated. If being at this level of capacity would happen at any other time, there would be two things happening. First, we would consider expanding. Our facility has room to expand, and we would typically be exploring that option. Second, some of our client partners would be growing and expanding enough to build their own cold storage facilities to meet their specific needs and to cut down on their costs. That’s just the normal cycle in our industries — at some point, many of our customers grow large enough to leave.
However, even though the climate seems right for expansion on paper, it just can’t happen. There are still material shortages all through the supply chain; it takes longer than ever to get the supplies to build. Also, interest rates are not conducive to large expansions, particularly when you consider that the average cost to build cold storage facilities is $170+ per square foot.
So while things aren’t going that bad, the next step still seems a couple of miles away.
The key, of course, is to enjoy these faint echoes for what they are: signs that things are warming up. A step has been taken. And even though a next step isn’t likely for now, it’s still closer than it’s been in a long while.
This column is sponsored by Adams Cold Storage, LLC, and the opinions expressed herein may not reflect those of Central Florida Ag News or of its advertisers.
BIO: Ben Adams, Jr., is an owner and president of Adams Cold Storage, LLC, in Auburndale. He has been directly involved in citrus production, warehousing and distribution, as well as state and community support, since 1980. His facility incorporates about 200,000 square feet of multi-temperature warehousing, with an extensive expansion project currently under way.
