MARKET REPORT - FEB. 5TH, 2016

Well, it’s about time to catch you up across the whole spectrum.Apples:  As we slowly wean ourselves from BC storage apples and list more Washington product, prices will jump 20-40%, but get used to that pricing because there is some harmonization when the first S. American fruit arrives, as Argentinians try to achieve the Washington market, and vice versa, so any increases you are seeing now are going to be the norm for 6 months.  Just have to get used to it.  It was not a glut year for BC or Washington growers, so there will be very few deals out there. Avocado:  With the huge Super Bowl draw now history, and with a fair amount of California fruit in the US market, Mexico growers are now looking at their existing inventory on the trees compared to traditional sales patterns and ‘even out’ pricing going forward – of course allowing for a combination of vast new plantings in different growing regions outside Michoacan, and an expected 25% sales increase year over year across North America.  Which basically says that nobody knows, but the expectation will be for a slow and gentle increase for the next few months, and then a significant increase for June and July.  We may be buffered by a slightly stronger Canadian dollar – currently up 5% from 6 weeks ago.Bananas:  The expected El Nino crunch is on with less fruit being produced in primary growing regions than world demand.  Not a day goes by when we don’t get a call from another wholesaler asking for “a few pallets”.  And when we’re short because of a container delay and go begging south of the line, the responses more recently have been, “are you nuts?”  We are seeing increases in sales at the wrong time, but one feather in our cap is that growers are always more than happy to increase volumes for us where they are going to get the Fair Trade price and premium. Most Fair Trade producers don’t sell all their fruit as Fair Trade – for many it can be as little as 20% – the balance being sold as organic, or even conventional if they don’t have an organic buyer, and selling as Fair Trade can increase the value of one container by up to $5,000.   You will also see yet another price increase on bananas for Sunday – we have had to move more purchasing into Peru, with El Nino affecting 40% of organic fruit in Ecuador, and our freight costs from Peru are significantly higher.  Peru ships 150 containers a week.  Ecuador ships 65-70,000 container a week.  Containers shipping from Ecuadorian ports are fully loaded “banana boats” and go straight to destination, with some brands like Dole and Del Monte having their own ships.  Those few Peru containers per boat fight for space with mangos and grapes and steamship lines don’t offer any deals.  Not our fault, but sorry, never-the-less, especially on a margin-less commodity.In the big citrus category, prices are fairly stable, but we are seeing an uptick on Navel’s already – not even 50% into the season, while we expect to see the opposite on Valencia with a great crop in Mexico now that the main Val crop is on and the smaller Desert Sweet harvests are wrapping up.  Specialty citrus out of California has been a challenging year, with topside prices, matched with very high demand.  Grapefruit is solid right now, but the market dynamic is different this year because Texas fruit, which takes a bold market share starting about now is small, late and trending more to choice grade this year.  We’re working on extending our Mexican program with a few new growers who produce at higher altitudes and go farther into the spring.  Lemons pricing has hit bottom and will now start climbing with ½ of the current crop off the trees and warmer temperatures slowing colouring.  Production is moving from the desert to north Central Valley (Fresno) – and with a smaller sized crop expect to see increasing markets on large and fancy fruit.   Limes are also jumping quickly – they usually pair with avocado markets – could be a guacamole influence.Mango sales have been stunning although we will be down to just large fruit for a week until the next container arrives.  We are getting very mixed messages from Mexico (not uncommon) with some growers saying their Tommy’s will be ready in 8 weeks, while packers are telling us the season is late for Ataulfo and Tommy – up to 3 weeks, which means into mid-April.  We’re hoping the growers are right and there is early fruit.  We will be out of Peruvian fruit in a month – we were hoping for a sailing this week, but 3 days of rain in Northern Peru (El Nino) put that idea to rest just today.Melons continue to be tight.  The conventional market is pulling mostly from Guatamala and Honduras with a cooler than normal winter affecting first harvest dates rather substantially across northern Mexico.  Very little watermelon as well.Pineapple – another tough market – we’re fussy on what brands we support, and Costa Rica is having an unexpected bout of rain, or else the normal spring and summer rainy season has started early(?).  Either way, wet pineapple dissolves and starts to ferment, so harvests get delayed.  With awkward steamship connections harvests have to sometimes coincide with those as well.Pear markets are tightening considerably with less than average organic D’Anjou and Bosc in storage, and most specialties about done.  Expect to see the first Argentina product in the market very shortly, and with growers getting a big buck, expect very high pricing through the spring.  We’re expecting more Fair Trade product this year across a wider range of varieties.Berries – well, this has been a very tough season for growers in Oxnard as well as Baja and Michoacan (Zamora), and a 30% decline in production from cooler temperatures plus field loss from rain has created a distinctly seller’s market and brokers (and maybe even some growers) are making hay.  Thankfully blueberries are filling the market gap nicely and quality has been excellent for the last 2+ months out of Chile.Asparagus continues to be in very short supply, with just a couple of producers pulling in Concepcionne (southern Baja).  This market won’t open up for several weeks until harvests start in Caborca (a few hours south of Phoenix AZ), and then to Huron in the California desert.Broccoli hit a very bad patch over the last 10 days (actually hundreds of bad patches) with multiple succession plantings all turning on at once, for pretty well every grower, organic and conventional.  Selling ranges are $3 - $5 below production cost, especially on crowns.  And when markets are flooded, and heads are being harvested fast, (and even in the rain out of necessity), expectations on quality should drop.  Product is backing up – there’s a limit on how much people will buy, at any price, or how fast excess product can divert the floret and frozen markets.  And you just watch – because planting successions are out of whack now that temperatures are now normal or higher, this big dump will swing back in 10-14 days.  The same story with cauli, with some growers offering at broccoli pricing, despite much higher production costs.  Don’t expect those cheap cauli deals for long, the peak has passed and supplies will go back to light pretty quickly.We are seeing a return to much more normal prices on a wide array of greens as well, and expect all these commodities to lift again.  Our supply chain out of Mexico has been hampered, with no shipping from Agrofresco, for the totally opposite reason – temperatures hit -3C way down in Guanajuato last weekend on more than one day, so there will be a lot of field cleanup on lettuces and newer kale plantings.  So there will be at least a one week gap on our schedule with them.  Broccoli won’t be impacted, but we aren’t about to expect Gustavo to sell us broccoli for $5 below his production cost to match California pricing when he can divert his production into the Mexican domestic market at a much higher return, so we will have a little left from the last shipment (pre-freeze) listed, but at much higher pricing – the quality outmatches anything we can buy in California.Your eyes do not deceive you.  Comeback Collards – stunning collard greens from Ralph’s in Mount Vernon – producing in February!Warmer weather has brought on a lot of celery and you can expect that very high market to crumble quickly, but celery can sit and wait in the field for a couple of weeks, so there is much less pressure to for growers to push markets into the basement.Expect a decrease on salad this week.  That is not driven with temporary burgeoning production, but instead with increased competition, with thousands of new acres in production this winter.Green onions continue to be in short supply.  This slow, slow, slow growing crop just gets punished when overnight low temperatures keep the soil cool.  There doesn’t seem to be much relief in the near future.  All production is based in Yuma and Mexicali, and the weather has switched to spring, but crops are a month behind and will take a while to catch up.On the root front, BC supply is grinding to a halt on beets and carrots, and prices should climb for the next few months.  Local potatoes are running shy, with russets winding down quickly. Manitoba is also wrapping up, so expect to see a plethora of listings coming soon from multiple growers across Northern BC and Alberta, and PEI to appear shortly after that.Tomato supply continues to be significantly lower, and even with some increased production in Mexico, Florida (which is actually a huge producer) has seen far too much rain, pushing demand to Mexico. Roma’s continue to be well-priced.  Funnily enough, the market is higher on conventional, and why?  Subway decided to switch to meatier Roma’s and that increased demand has pushed pricing hard.  TOV pricing is stable, beef pricing is expected to stay in its current range, and cherry production should start to ramp up with weather stabilizing in Baja, Sonora and Sinaloa.  Peppers are in strong supply but with high demand, growers are packing mostly fancy and not pushing excess supply into larger packouts.  Choice grade (being predominantly fruit that is falls out of the Large or XL sizing specs) is not the deal it has been in the past, at least not right now. Eggplant continues to be a struggle, with viruses hitting many producers, giving spotting and scarring, and there is little demand for ugly, or grower willingness to ship imperfect product.OK, I’ve run out of time, but that should hold you for awhile!