MARKET REPORT - NOV. 10TH, 2017
Much to talk about today.First, of course, my favourite subject – weather! There isn’t much in the way of weather issues in play at this moment. A mini-cold wave did in all but the most resistant of local crops, but expect to still see local dandelion, kale and a few others until harvesting is just plain not fun. Superb fall weather has blessed the coastal California growing areas like Salinas, Watsonville etc. where green veg and berry harvests have all but wrapped up, but perfect conditions are blessing winter fields in Oxnard. (That’s the small production area right on the coast, just north of Los Angeles.)
Growers in the primary production areas in Imperial / Yuma, other than some free irrigation from remnant Pacific hurricanes have had a good start as the transition moves to their area. Central Valley citrus growers survived the incredible summer-time heat, and with a few frosty nights under their belt have expectations of a great citrus season there (navels, car acara, blood, satsuma, tangelo etc.) With good fall conditions in Oxnard and Santa Maria counties, strawberry production is ramping up. Reports today had production way up – from 900,000 trays up to nearly 3 million cases last week, so we can expect a price break soon, although anything can happen in the next 10 days with the lead-up to US Thanksgiving weekend.The bigger weather news is La Nina, which is now forecast to in play into the spring, coming soon to a theater near you. La Nina (cooler than normal water temperatures in the ocean off the coast of Peru) translates out many ways – hotter and wetter on the East Coast of the States – colder and drier for Vancouver – really sopping wet for California etc. Without going into a lot of details, there are always climatic patterns that change weather around the globe on an on-going basis. These are well known, and influence long range weather predictions. When those ‘oscillations’ in global air movement are laid over La Nina projections to see the impact of the combination for this spring it looks far less scary, with temperatures over the primary growing areas near average – but definitely show all of B.C. in dark blue (much below average)Now for some specific markets you should know about:Avocado market is the slackest it has been in a looooooong time and sales are strong. Our “Rebel” fruit is doing very well, thank you. No it’s not ugly – it is selected out on the packing line with lasers and sometimes you just don’t know why, but export rules on Fancy are very strict. With so much price pressure in this commodity, order a sample and if you like it, consider co-mingling with fancy on the shelf and adjust your retail, or your margin, or both. Certainly worth considering.Blueberries. Although harvests have been under-way for nearly a month in some parts of Argentina, their crop is low and prices are crazy. As tempting as it is to plug these in, the eventual retail on a 4 oz. clamshell is prohibitive, currently running at the equivalent of $40 a pound. Hope the growers are getting some of this great action and not just LA brokers! Again this year we are working directly with a grower group in Chile (some members of whom we have been buying from, one way or another, for what will be the 8th season.) Expect to see these in the 6oz format in a couple of weeks.Grapes. It’s time to say good bye on this category. Final uncommitted volumes out of California are selling at the very high end – double what they were 2 weeks ago. Retails would be a rocky road going forward on crop that gets progressively longer in the tooth. What we have is what we have with no incoming so expect this line to be empty by next week if there isn’t a miracle.Melons: The selection really is cantaloupe and icebox watermelon and will become intermittent. Divine Flavour and Llano are the only 2 growers with strong consistent supply, and they are 50km. from each other. Temps have been downright HOT, with overnights rarely dropping into the teens, but history teaches that cold blasts usually extend that far south and stop melon growth in its tracks in December. We might squeeze another few weeks out of this deal before prices or supply kills it. At the moment we’re in a sweet spot on price – no pun intended.Citrus: In general, pricing is stabilizing on lemons, moving south on Navels and the spendier fruit will be the first couple of week’s harvest of all the specialties. Satsuma are on the high side, expect relief after Thanksgiving. Chinese Mandarins are sucking up a lot of oxygen and supply looks strong for this 6-7 week run. Grapefruit is dropping and we have a couple of specials on-going on our FT fruit. What will ease pressure a lot on main varieties is the opening of the Sonora Desert Sweet crop. Produced by 500 member Citricos Coop in Hermosillo (also about 50 km. from Divine Flavor) this Spanish bred Valencia variety is counter-season to the California Valencia crop and always welcome. We’ve walked through those orchards and packing house a few times over the years – a truly impressive operation. They are coming out of the gate at market pricing matching the extinct California Val season and the earliest Navel harvests – this will all rotate down somewhat within 4 – 5 weeks.Pears: WA Bartlett’s are winding down on green, red still OK. You will have strong D’Anjou supply in green and red through the fall and winter from CA storage in Washington, along with a good variety of Bosc.Persimmons and Pomegranates: Two seasonal favourites – good supply on Fuyu should continue for a few weeks, including a smattering of local – more expensive, but having Fraser Valley persimmons is rare. Pomegranate are also in good supply with lowering markets expected.Raspberries are very spendy, but we do have good supply of some very nice Fair Trade fruit from Mexico.Strawberries: As stated earlier, expect prices to drop later in the month, after the US holiday if weather holds.Veg:Just a brief note on this, otherwise I sound like a broken record. If you have access to our last year’s pricing you would see a staggering difference on green veg pricing year-over-year. Take last year’s mid-November pricing and triple it and you would get close on broccoli and a few others. That is NOT going to happen this year. The days of $1.99 organic broccoli at retail will likely not surface this year, if I’m not dead wrong. Not one grower is expanding this year, with some contraction on the US side and a lot of growers in and now out on the Mexican side. 10% too much broccoli or romaine in the market sends prices tanking and that extra 10% is not in the field this year, in fact my guess is that plantings are down 15% or more. Could be wrong. Often am. If there was any correction to be had, it will be in 10 days when shippers have finished licking their wounds, or spent the extra at the casino, all depending on how US Thanksgiving markets pan out. Cauli markets are soaring during transition, and expect celery to take its seasonal moon-shot as well, with coastal growers done for the most part and slow-to-grow celery plantings in the desert are many weeks away from being “ripe”. You should also expect some seasonal adjustments for the next couple of weeks on kale and lettuce with some wide fluctuations.On the welcome side, our first load from Ecocampos is on the road. When you hear “Ecocampos” remember that this is the 5th season on this Agrofresco program, which we are now re-branding as Ecocampos across all items because we finally have our own custom boxes. No more plastic or generic boxes. There’s no lettuce on the first load, due in on the weekend or Monday, but lots of broc, celery and kale. With our own house inspector on hand for pack-outs and planning, as usual, we’re expecting to maintain a stupendous record on quality on this program which lasts until mid-June.As promised OriginO LE cukes are done, we have captured the last small harvest and expect to dwindle down quickly over the next few days.One final bit of news to mess up an otherwise great day you’ve been having. Going by the “trust” system, truck drivers hauling in the US have been allowed to basically drive 8 on, 8 off, etc. and average 12-14 hours a day on the road. New regulations that the California State Transportation Authority has brought in will require an electronic time-clock transmitting 24/7 to make sure drivers are keeping to their new shorter schedule as part of the new regs., which will reduce time on road to 8-10 hours. That will slow down incoming trucks by ½ a day from SoCal, but will also reduce the number of trips a driver gets (and they are pretty well all owner-operators). So if someone got 3 loads south and 3 loads north over a 3 week period, Vancouver to LA, that’s going to go to 5 in total now instead of 6. They are going to want 15% more on invoice to make up for 15% less mileage. Who is going to pay for this??? You. With trucking being a hefty percentage of the value of an in-coming truck, that is going to translate to at least a 5 - 8% increase in organic produce pricing, and closer to 10% on conventional (where the value is generally lower for the same trucking cost.)Here’s a quote from a recent article in an industry paper Transport Topics. “Some of the largest truckload providers are preparing their contract customers for double-digit 2018 price increases…Shippers that depend on fall sales are luring temperature-control capacity from other shippers by paying contract rates, plus $1,000 surcharges, or more, depending on the lane (route). In this market, one moment you have a truck, and the next, it’s gone.”Have a nice day!