MARKET REPORT - SEPT 27TH, 2017
A few changes you are probably noticing. We have some zucchini / cukes etc. starting to roll in from California. As much as we would like to have local well into the fall, the reality is that colder nights everywhere, and light frosts in the Interior are impacting production. As well, yes, that’s California lettuce, cilantro and a few other things on today’s list. Do not Fear! Our local season ain’t over, there’s just a bit of a gap on those things. Colder nights and a few days of rain recently slowed production down just enough on greens to create up to a week-long gap from more than one grower. But this is short-lived we think. With record-breaking heat about to hit again for the next few days, we’re pretty sure things will catch up.
I just love the reports from Chance at VBZ Grapes, one of our grape vendors. He’s a large grower on both the conventional and organic sides. He is forthright, opinionated, transparent and straight-to-the-point. So he’s talking today in his weekly update about weather and impacts on the grape storage crop, and I think it’s nice that you can get right into a growers head as he discusses the weather impact on the overall crop, his own production, and other impacts on pricing.Following that report is an update on a very turbulent citrus market that is unfolding as we speak.So, here’s Chance and his report:Sent: Thursday, September 21, 2017 6:50 PMSubject: VBZ Weather UpdateWeather Update - the last day of summer brings CA Snow fallThe hottest summer on record...followed by 5 major rain events this month. Labor Day wk was a killer for all of us out West. 114 - 108 temps with east coast tropical humidity in Central CA. Watsonville 95 that wk - berries and veg quality already showing tip burn and scarring in our local stores. This last heat wave was the icing on the cake, quickly thinning out 20-30% of the fall storage program. This morning's storm rolled through Central CA and our local ski resort has their first base layer of the season. Depending on your vineyard location, 25-35% of the scarlets royals were lost through this summer heat and 50% of red globes are toast. Rain attrition will follow as everyone assesses damage into the wknd. Back in the high 90's next wk. .. moisture and plastic may create a greenhouse condensation/humidity effect on what was kept dry this morning. If early fog rolls in anytime soon, all bets are off. Michelle and I are Sunkist growers in Exeter - don't expect any early Navel promotions in October - delayed and light on the front end.... My organic mandarins are super super light......Offshore issues will persist during the transition. Peru is literally a washout on the front end as they deal with massive flooding earlier in their season and Chile is 3 wks behind last yrs start. The usual suspects are lining up xmas #'s ahead of schedule and the majority of all our storage programs will be pre-committed and pre-sold by PMA.Grape Harvest -The bulk of Scarlets, Timco, Allison, & Sweet celebration will be in the barn in 3 wks. Our late season crimson harvest will run through thanksgiving (minus the 600K we yanked).Cold Storage ReportThe first 2017 USDA cold storage report was released yesterday - 700k less in storage YTD 2016. The VBZ flame effect? 600k fewer flames this season relieved downward pressure on red grape pricing in July/August (the highest USDA market pricing reported on red grapes out of both districts in years). Rumor has it, the table grape commission will officially be lowering the industry estimate soon. 105-100 million would be my guess - Offshore January grape lids in the $30's-50's range? - not so bad compared to the avocado deal hitting $100 2 wks ago------------------------------------------------------------------------------------------------------------------------------------------The California Citrus Mutual (CCM) has said the state’s upcoming orange harvest is likely to begin later than last season, with robust pricing anticipated as the result of one of the lightest crops in years.The California Department of Food and Agriculture (CDFA) last week estimated 70 million cartons of Navels would be produced, which would mark the lowest levels since 2008-09.CCM president Joel Nelsen said the industry believed the projection was largely on target, mainly attributing the reduction to declining acreage and rains in March which affected the bloom.“If you take a look at the figures, the number of acres in actual production is down significantly. We continue to see growers vacate the industry, and acreage being bulldozed or modernized,” he said.Nelsen said two key factors behind the declining acreage were the drought and a stifling regulatory environment.“Over the last three or four years there’s been a drop of 25,000 acres. Multiply that by 600 cartons per acre and that’s a 15 million carton hit,” he said.“We used to think 85 million was a normal crop…well this year we’re down to 70 million.”He explained regulations concerning such aspects as water usage, crop protection tools, buffer zones, and air quality were making it “extremely difficult” for individuals to be successful.Changes to these regulations and varietal reconversion in citrus groves would be needed in order to turn around the declining acreage and get back up to previous production levels, Nelsen said.“In what direction do we recover? That’s open to speculation, but I think that acreage is going to come back into production, it’s just going to be consolidated in terms of ownership,” he said.Heavy rainfall over the winter means there is plenty of water to irrigate for this year at least, he said.The representative also predicted the orange harvest would begin around a week to 10 days later than last year, depending on weather factors over the coming weeks.“That’s all up to Mother Nature right now,” he said.“We’re still having warm weather, and the fruit hasn’t sized as it has in the past. A little bit of rain in October will help.”Cold temperatures at night were also needed, but Nelsen said he didn’t see that happening over the next couple of weeks.“Right now I think maybe around the middle of October we’ll start harvesting some fruit and by Thanksgiving there will be volume in the stores, but it’s going to be tight for Halloween which is Oct 31,” he said.He also anticipated ‘robust’ pricing in the market as a result of the lower production.“No matter what you produce, the cost of farming is stagnant. You’re going to end up spending somewhere around US$3,500 to US$4,000 an acre to farm Navel oranges, whether you get 400, 500 or 700 cartons,” he said.“So growers are going to need a positive return on a per-acre basis. Now there are fewer cartons, one would expect a strong start to the Navel season, but unfortunately for the consumer the costs are going to go up a bit.”