MARKET REPORT - FEB. 17TH, 2017

Talk about ending the drought! Let’s start off with this message this morning from Coke Farms in San Juan Batista (2 hours south of San Francisco and ½ an hour away from the Salinas Valley.)“Have a quick moment of electricity to write this email.  We are experiencing INSANE wind and weather here today.  Like we have never seen!   Expect that you may not receive your orders until Monday at best.  Trees are down everywhere, roads and highways are closed and power is out in many places.  Some employees not able to get here and working conditions outside are dangerous.  Even if we get orders built hard to say if trucks will be able to get to us on time etc.  Please be patient as we sort this out.” This morning winds are blowing at 110 kmh. on the I5 highway north of Los Angeles.  California is breaking every rule this year, with rainfall nearly double the “normal” so far, and is set to have more rain this winter than ever recorded across most of the State.  Aquifers are re-charging.  Nearly every dam and reservoir is full and the Sierra snowpack, whose meltwaters feed irrigation systems all across the State is at 175% of normal.  Talk about ending the drought!Of course, all this rain is having an impact on many growing regions.  Although most production comes from the southern deserts, we do buy from many farms along the California coast – especially in the Santa Maria / Oxnard regions, and orchards from San Diego north to Ventura then east into the Central Valley.  All these areas are being impacted.  Oxnard is expecting 150mm of rain today – (1/3 of their ANNUAL average.)  Even 25mm of rain in the Central Valley shuts down the citrus harvest.What that means for us?  Well, besides the fact that harvests are light or non-existent on rainy days, California always a mold issue with abnormally high humidity and rain.  Expect a little rationing on butter lettuce, arugula, some salad mix ingredients, and spinach for sure.  The bigger impact is on oranges and lemons, which have no problem with rain, but it takes a day or two to fully dry orchards and wait until orange skins are bone dry.  Otherwise they just go to mush in no time.  Because this crop is harvested as needed, with little fruit in sheds, a 2 day hiatus in harvest can and will spike prices.  Adding insult to injury, Thursday was a good potential pre-storm harvest day, but Thursday was also the Day of Immigrants strike across the U.S., a national protest against stepped-up deportations.  In similar fashion as “A day without Mexicans” hundreds of thousands of field workers didn’t show up for work on Thursday.  Thousands of restaurants nation-wide closed, as did dozens of slaughterhouses and other food factories.  These workers are pissed at working for low wages and having a fear of deportation hanging over their heads.  With stepped-up deportation now in play, there will come a time very, very soon when there just aren’t enough people to fill these food industry / food service jobs, and I am damn sure that unemployed workers from the dinosaur coal industry in Pennsylvania aren’t going to move to Phoenix to get a night shift job flipping tacos for $7.30 an hour.   Sorry hand to rant a bit.In other news…………Apples:  We are winding down fairly quickly on B.C. storage apples, and transitioning, variety by variety to Washington, with substantially higher pricing, partly due to currency.Citrus:  No issues with supply or drought, just harvest windows as mentioned above – just watch your retails as prices bounce around for at least another 10 days.  The normally desert-like Central Valley, including all citrus growing regions in the Fresno – Bakersfield corridor are expecting 30mm of rain today, and varying amounts right up to next Wednesday.Berries:  A crappy year for California, with fields deluged week after week after week – most if not all strawberries are coming out of a few regions in Mexico.  Production in Baja has increased and prices are coming off on Mexican fruit.  Raspberries and blackberries are in a different boat – limited supply in spendy markets.  Blueberries have been yet another challenge, with most Chilean shippers shutting down a few weeks early.  Fruit quality has suffered with amazing heat records have been smashed across all growing regions, sometimes by several degrees, day after day.  So what is here is here, and nice, but no more.  Over $1 Billion in property losses across Chile from wildfires, including thousands of acres of grape, berry and apple orchards.  We are hoping to see a limited amount of Mexican blues to fill in the gap before California really gets going in May.Grapes:  Getting organic grapes out of Peru has been a decade long challenge. Peru has dedicated a huge amount of energy expanding into the grape market – but clever growers see windows of opportunity.  Grapes fruit from late spring to early fall in most areas, then drop leaves and go dormant.  The areas where grapes are grown in Peru have just one season:  summer.  And they’ve only been growing grapes commercially for a few years. But years and years of trials have found that some varieties can be forced to produce at a certain time based entirely on when they are pruned back.  We visited a grape trial in Mala (farther south in Peru) back in 2009, and have walked a lot of vineyards for many years in Peru – never having enough volume to buy a container’s worth.  But it was interesting.  One of the biggest challenges is getting big grapes – in fact it’s one reason that Chile, with vast vineyards has not been able to do organic grapes.  Small grapes aren’t allowed in the U.S., and conventional grapevines are given hormone shots to swell them up (yes, really) which aren’t allowed in organic certification.  Peru has less issues with sizing, but only certain varieties can produce grapes large enough to meet rigid export requirements to enter the US, where protectionist forces have defended the stateside industry with this regulation.  All being said, we have some Peruvian Red Globe on the way in, and in the much-respected IMO/Ecocert Fair Trade program.Grapefruit:  Pragor has found new growers to join their coop in different regions away from the coast who have a much different production season.  Our long-time growers who we’ve been working with for an amazing 10 years are done for the year.  If you’re familiar, their groves are just an hour drive north of Ixtapa, where these new growers are high in the mountains of Michoacan.Mangos:  The end is in sight on our Peru program, with just another 2 weeks before we’re done.  Normally we transition soon to the very southern parts of Mexico for Ataluflo and then Tommy’s and then move north for 6 months across Mexico.  Unfortunately, the crop is late in Oaxaca and Chiapas, and violent windstorms there a couple of weeks ago stripped off most of the fruit that was waiting for harvest about now.Pears:  Still good supplies in Washington of all storage varieties, and the first Argentinian Bartlett’s are now here.Grass:  We’re now into the beginning of the US Asparagus run, starting out in the southern deserts and moving north through the Central Valley, Washington and B.C. before we’re done in 3 months.  Time to make a permanent space now that prices and availability are stable for some time.Greens:  Other than some shorts on volatile leaf that is getting hammered in coastal California, we’re seeing excellent growing conditions across the desert and throughout Mexico.  We’re in a continuing over-supplied market that has most growers shaking their heads and keeping prices in many cases at or below production costs.  More worrisome at this point is harvests delayed for a few days because of the current storms, and we’re keeping our eyes open to northbound trucking delays over the next couple of days.Roots:  Good supply across the board.  Expect a transition out of BC potatoes to Alberta, Manitoba and PEI over the next few weeks as Fraserland and Across the Creek hang up their skates after an excellent season.Onions:  Prices will now start to inch up as supply starts to wane, well ahead of early sweet yellows coming out of the desert.  Millions of pounds of onions were lost a few weeks ago when a dozen onion storage facilities sustained heavy damage from un-heard of snow loads in Eastern Washington.  Those were conventional, but there will be pressure on organic and non-organic product for a few months.Tropicals:  Prices here are also in the toilet because of over-supply.  A lot of growers are struggling with prices below cost of production and are trying to divert cukes and tomatoes into the national markets in Mexico, where prices right now are not much different than what growers are getting sending into the US market.Santa Amalia:  This is our new-this-year program in central Mexico, designed to complement our great Agrofresco program, with a grower a few thousand feet lower in elevation and warmer.  Trucking has been a struggle, as well as some record low temps over the past few weeks, so supply has been intermittent, but we do have another shot of Alvaro’s product on its way.  Just letting you know because there was some pretty rave reviews on his stuff in December and January.Last note:  Peru is winding down on ginger.  Prices have been stifling for producers this year, with thousands of little growers (really little) seeing their neighbours make good money and planting out their little fields…..well, it always happens that way, and forces prices down to where it’s no fun anymore.  And dozens of new “marketers” into the game this year.  Expect rising prices across the board.