MARKET (REPORT) RANT - JAN 27TH, 2017

Interesting times ahead! I had to take a market report break for 10 days as I tried to wrap my head around a new US administration that seems hell bent on taking an entire society backwards to uglier times.  So much comes into play for us with this change.  We, yes we, will lose a vast amount of knowledge and wisdom as important departments are, in what used to call witch-hunting, decimated in the USDA and Environment departments. Climate scientists have been working behind the scenes for 2 months to transfer 7 terabytes of climate change research, studies and data to ‘safe houses’, being servers in Canada and elsewhere in fear of the information being purged. Canada, like many countries doesn’t have satellites tracking climate change, and many, if not most rely on the US to provide the info.  The same story with the FDA and USDA where we will see a decimated and demoralized staff – the very people who maintain, modify and enforce food safety standards, inspections, protocols between trading nations and the NOP – the National Organic Program in the U.S.  So many strides have been made in securing regulations over the past decade, all we can do is watch with baited breath to see how much, once again, knowledge and wisdom will be lost, or as a very influential lobby representing all things GMO and chemical finding the halls of Congress and the administration much more approachableAt the same time, a bold and somewhat scary approach is being taken to world trade.  For all the good and bad of trade agreements, they have certainly benefitted the fresh produce industry, with very few tariffs and duties left on the trade of fresh fruit and vegetables around the world.  Yesterday, it was announced, and then retracted, and then announced with less fervor that in order to finance construction of a new wall across the Mexican border, the US would impose a 20% duty on imports into the US.  Period.  Of course, that 10 Billion $ ‘fee’ would only hurt lower income Americans who would have to pay more for food, clothes etc. at the grocery store and Walmart by 20%.  And that would also mean that on any fruit or vegetables we buy from American companies selling or distributing Mexican produce, we would also see an impossible to fathom 20% increase as well.  We don’t know how this will play out.Where my concern comes into play, is that if anyone in the world knows how to have a good protest, it’s the Mexicans. And honestly, if I was a Mexican and was told over and over by the new president that I was a bad hombre, a rapist, an illegal alien, that I had to be kept out with a wall, and that the only reason Clinton got more votes (despite losing the election) was because illegal Mexicans had voted, sometimes twice in the US election, well, I would no longer have an appetite for anything red, white and blue.  There is a quick resurgence in Mexican nationalism, and my concern, not yet echoed in the media, is that there are always two sizes in a trade war, and if there is to be one, we can rest assured that road blockades, closed borders, and burning trucks and buses will certainly be leads in the Mexican news, as they so often are  And that would impact Mexican imports, obviously.  Luckily, there is an ocean out there and sea container shipping to Canada is an option.And the notion that Mexico will pay for a wall – OMG – first, the wall exists – to the tune of $6 Billion dollars over the last 15 years.  The U.S. has already built a wall across 2/3 of the border.  The only places they didn’t were stretches where they either couldn’t, because of terrain and access issues, or where there was no risk.  Hundreds and hundreds of km. of border slice through vast dryland deserts where no one could survive a multi-day stroll to nowhere.  But, as we’ve talked about before, more Mexicans are leaving low-paying jobs in the U.S. to take much more attractive jobs back home than are illegally crossing north.  The U.S. is already coming close to full employment, now at a near record breaking 4.6% unemployment rate, and with more and more Mexicans moving home, (and I would expect that southern migration to increase,) you can imagine how much more severe the current labour shortage will be for the entire produce industry in the U.S., where apples are already being left on the trees in Washington, blueberries going unpicked in Oregon, and strawberries being tilled in for want of harvest labour in California.  You can also rest assured that the unemployed coal workers in Tennessee are not going to move to California and pick grapes or cut lettuce.Even today, the tirade continues, with the new US president announcing they will now publish a weekly report of all crimes committed by non-citizens – which could include, of course, not having a visa to be in the US.  Which of course means that Mexicans will be shamed publically.  Man, I would be out of there so fast and back home, no matter the impact.The foreboding proposal, which was part of several executive orders cracking down on immigration and refugees, is "shocking in the extreme," Human Rights Watch said Thursday."This is completely consistent with Trump's xenophobic demonizing of immigrants throughout the campaign, of course, but the idea of a public list like this—a kind of weekly hate list—is still shocking in the extreme," the group's European media director, Andrew Stroehlein, told the Independent. "The measures this administration has announced against immigrants in its first few days will devastate families—including U.S. citizen families, naturally—and terrorize communities across the country."Interesting times ahead!   Will have a report on the state of the fruit and vegetable world in a few days!In regard to recent rainstorms in California, and a bout of cool desert weather – here’s a quick report from Organic Girl:“Week ending February 4th: Growing conditions in the desert regions are creating quality challenges, with the main issue being mildew in both organic arugula and organic spinach. While we’re working diligently to fill orders, the current supply situation will prevent us from shipping straight organic spinach items for most of next week. We do expect to have some straight spinach to ship again starting next weekend. We also expect some shorts with arugula items, but do have better supplies this coming week for arugula vs spinach.”