Discovery Organics | MARKET REPORT – SEPT. 13TH, 2017
26731
single,single-post,postid-26731,single-format-standard,ajax_fade,page_not_loaded,,select-child-theme-ver-1.0.0,select-theme-ver-1.7,wpb-js-composer js-comp-ver-4.3.4,vc_responsive
 

MARKET REPORT – SEPT. 13TH, 2017

MARKET REPORT – SEPT. 13TH, 2017

Avocados…

FIRST, This first report is from Bloomberg News 6 months ago, just for reference and some interesting factoids.  The meat of the story follows below this first one.

That bowl of guacamole on Cinco de Mayo will be more expensive this year, as avocado prices rise to a record on surging demand and a smaller crop in Mexico and California.

A 10-kilogram (22-pound) box of Hass avocados from the state of Michoacan, Mexico’s biggest producer, cost 530 pesos ($27.89) Thursday, according to the government. The price, which is subject to seasonal swings, is more than double what it was a year earlier and the highest in data going back 19 years.

Avo Rally

The jump in demand in recent years has been dramatic. American per-capita consumption was 6.9 pounds in 2015, versus 3.5 pounds in 2006, according to the U.S. government. People are being drawn to the fruit not just for its taste but also for its healthy oils and fats, a trend borne out in the U.S. by Starbucks Corp.’s announcement last month it’s selling avocado sandwich spread.

“You have increased consumption in China and other areas of the world, like Europe,” said Roland Fumasi, an analyst at Rabobank in Fresno, California. “They’re pulling a lot more of the Mexican crop, so there’s less available for the U.S.”

Mexico supplies 82 percent of the avocados eaten north of the border. Its shipments into the U.S. surged to 1.76 billion pounds in 2015 from just 24 million pounds in 2000, according to data from the Hass Avocado Board in Mission Viejo, California.

**************************************************************************

Then there are today’s stories below:

Chipotle Mexican Grill Inc…..Bloomberg News Stock Watch

(CMG308.83+1.21%) faces yet another problem as the cost of the main ingredient for its popular guacamole surges on shortages in Mexico and a poor harvest in California.

Many on the Street, including analysts at Credit Suisse, are advising clients to avoid CMG stock as inclining avocado prices “pose risk” to the burrito chain’s profits.   Credit Suisse lowered its price target on CMG from $335 to $320 and reiterated a neutral rating on shares, forecasting every 10% increase in avocado prices reducing Chipotle’s earnings per share (EPS) by $0.30 on an annual basis.

 

Avocado shortage, record prices hit Chicago businesses…(Chicago Tribune)

Taqueria Los Comales, like many other Chicago restaurants and retailers, has an avocado problem.

Because of a supply shortage this summer, the family-owned restaurant chain has had to pay a premium for the popular menu item in recent weeks, shelling out close to $100 for 48-count cases of avocados that usually sell this time of year for between $68 and $72.

“We can afford to lose a little profit, but we can’t take it on the chin all summer,” said Christina Gonzalez, manager of the Little Village location and daughter of Camerino Gonzalez, who founded the company in 1973.

“What do you do if you’re a Mexican restaurant? Do you not serve avocado?”

Soaring avocado prices throughout the U.S. — largely a result of crop shortages in Mexico and California — have forced tough questions for Chicago-area businesses selling the fatty green fruit to consumers who can’t seem to get enough. Shoppers likely have noticed steeper prices in stores and, possibly, smaller portions or fewer options at restaurants. It’s not clear when prices could return to normal.

“Prices have gotten stupid and the main reason is prices are this high and people are still buying,” said Peter Testa, president of Testa Produce, one of Chicago’s longtime produce wholesalers.

******************************************************************************The avocado market is crazy right now,” said Robert Schueller, a spokesman for Melissa’s Produce in Vernon.

Melissa’s, which supplies premium fine dining restaurants in Southern California, typically sells a case of avocados for $30 to $40. On Wednesday morning, the price shot up to nearly $120, he said.

Dave Samuels, a sales manager at Ingardia Bros., said the Santa Ana produce company is selling avocados at $98 a case. That’s about $20 more than the company’s previous record-breaking high of last October when Mexican supplies were running short. In mid-summer, the price per case was at $59.

The crop shortage is affecting grocers across the state.

Some places are selling avocados for more than $4 each. On Instacart, Costco is selling a 6-count bag of Hass avocados for $9.19, about $3 more than normal.

Me again.  Remember that all the above information, pretty well all from the last 10 days references prices in US dollars for conventional avocados, so when you see $4 each, add 30% for organic and 25% for the currency exchange difference, which would equal $6.50 for a large organic avocado.

And then there’s Oranges!

**********************************************************************In less than a day, Hurricane Irma turned a once promising Florida citrus crop into a disaster with winds ripping as much as 75 percent of the fruit from their trees. (The Ledger)

LAKELAND — In less than a day Hurricane Irma turned a once promising Florida citrus crop into a disaster with winds ripping as much as 75 percent of the fruit from their trees.

“We had one of the best crops in five years if we could have delivered it,” said Paul Meador of Everglades Harvesting and Hauling in LaBelle, which manages about 3,000 orange grove acres in Southwest Florida. “Yes, it was devastating.”

Meador estimated as much as 75 percent of his most mature oranges, the early and mid-season varieties harvested from October to March, have already fallen off the trees, he said. As many as 50 percent of his late season Valencia oranges, harvested from March to June, are lost.

And more fruit losses may come in the next few weeks because almost all of his groves are underwater in the rainfall Irma dumped on the area.

Southwest Florida groves appear to have taken the brunt of Irma’s force as the hurricane made landfall in that area as a Category 4 storm with sustained winds between 130 and 156 mph.

“I wouldn’t be hesitant to say we took 120 mph winds in LaBelle,” said Anthony Pescher, the harvesting manager for Wheeler Brothers Inc., a Lake Placid-based citrus company with several thousand grove acres in Florida.

Pascher estimated Irma blew about 30 percent of the oranges off Wheeler Brothers groves in the LaBelle area, he said, but that could rise as high as 50 percent because the weakened trees will have difficulty holding onto their fruit.

Another Southwest Florida grower, Wayne Simmons, president of LaBelle Fruit Co. LLC, estimated it lost 75 percent of its early-mid oranges and 65 percent of its Valencias. He also reported much of his acreage underwater.

“We’re just trying to clean up the mess,” Simmons said.

Mongi Zekri, a University of Florida citrus agent working out of the Hendry County Cooperative Extension Service office in LaBelle, estimated Irma destroyed 60 percent of that county’s orange crop. Hendry County leads the state with 10.1 million citrus trees, according to an Aug. 31 U.S. Department of Agriculture report.

Groves in Polk County and the Central Florida Ridge, also along Irma’s path across Florida, also sustained major fruit losses.

Vic Story Jr. of the Story Companies, a Lake Wales-based grower, estimated its groves in Polk, Highlands, Hardee, Okeechobee and Hillsborough counties lost between 50 to 60 percent of its early-mid oranges and about 40 percent of its Valencia oranges. The company owns or manages about 5,000 grove acres in those counties.

Other local growers also have significant fruit losses, he added.

“I haven’t been in every grove in Polk County, but the ones I’ve been to look like they’ve lost 30 percent of their fruit,” Story said.

Growers on the East Coast who did not take a direct hit from Irma, but still experienced tropical storm-force winds, appear to have sustained less fruit loss.

“The majority of the crop is still on the tree,” said Doug Bournique, executive director of the Indian River Citrus League, which represents the world’s largest grapefruit growing region.

That’s significant because the size of grapefruit makes it the most vulnerable to being blown off the tree by strong winds. The three 2004 hurricanes, two of which made landfall on the East Coast, destroyed an estimated 75 percent of that season’s crop.

Still Irma caused widespread damage across Florida citrus-growing region, said Andrew Meadows, a spokesman for Lakeland-base Florida Citrus Mutual, the growers’ trade group.

Meadows estimated fruit losses at 20 to 50 percent, depending upon location, he said. But the storm affected the state’s top five citrus growing counties — Polk, Hendry, Highlands, Hardee and DeSoto – which together account for most of Florida’s orange production.

 

 

 

 

 

No Comments

Sorry, the comment form is closed at this time.