MARKET REPORT - NOV 18TH, 2016
I’m going to have to be a climate nerd for a couple of pages here, only because I know that this is of interest to some of you, and also because something is happening that isn’t in the mainstream media, but is absolutely astounding. This is what Dr. Bob Henson, meteorologist with Weather Underground had to say today:
“There are weather and climate records, and then there are truly exceptional events that leave all others in the dust. Such has been the case across Earth’s high latitudes during this last quarter of 2016, on track to be the planet’s warmest year on record. Sea ice extent and area have both plummeted to record lows for this time of year in both the Arctic and Antarctic. Such dramatic losses rarely occur at the same time, which means that the global total of sea ice coverage is phenomenally low for this time of year. “All the squiggly coloured lines on the chart below show the extent of sea ice in the Arctic over the year for the past 40 years. That area has been declining, on average, year over year, but this current year is shown in red – the lowest squiggly line. An amazingly large area is not frozen that should be. Why? Temperatures in the Arctic have risen substantially, much higher than anywhere else in the world, but the heat spike that lasted through October and continues into November is staggering. This week’s heat spike to 20°C (36°F) above average is a greater deviation from average than any previous spike recorded at any time of year. That would be the equivalent of Vancouver having highs right now in the low 30C range – the same as some of our hottest days in the summer.
Over most of Central and Eastern Canada and most of the U.S., except the west coast, temperatures averaged 5C (8F) above normal for the month of October. These are absolutely astounding changes happening in a very short period of time. This picture of temperature anomalies (North Pole in the middle of the graphic) shows a huge mass of warm air over the Arctic this week that is 36F (20C) above normal. If you tilt your head to the right you can see North America and the Caribbean in the very lower left corner, just to put this map into context. We all know the ramifications of climate change, especially those of us in the fresh produce arena who see the impacts of a warmer planet and a changed atmosphere every day.The reason I mention this now, is because the Obama administration has just announced the new U.S. plan to reduce global warming, as part of Obama’s commitment to the Paris climate agreement - despite the expectations that a Trump presidency could delay progress. Here is what it says: ‘The blueprint identifies three major categories of action for "achieving deep economy-wide net GHG emissions reductions," which include: transitioning to a low-carbon energy system by deploying renewable energy in the "transportation, buildings, and industrial sectors;" removing carbon from the atmosphere through natural systems, such as forests and soil, and imposed, like controversial carbon capture and storage (CCS) technologies; and reducing other GHG emissions, "such as methane, nitrous oxide, and fluorinated gases, which result mainly from fossil fuel production, agriculture, waste, and refrigerants.’This is the first mention I have seen where a national climate policy talks about both soil and agriculture, and is perhaps an acknowledgement that natural farming systems, like organic production, enhance carbon capture. In fact, the esteemed Rodale Institute announced a few years ago that moving to organic production globally could virtually reverse climate change. Dr. Vandana Sheeva, renowned scientist and advocate for organics, noted recently that by her calculations, conventional agriculture is responsible for 30% or more of all global warming. There is also recognition that some agricultural chemicals released into the atmosphere are much more significant contributors to global warming than carbon dioxide. We can only hope that the new US administration is a one-trick pony and a serious moves to substantially change US climate policy are just going to falter for a short time.Now, for changes afoot in our produce world – there aren’t that many. This time last year you were paying $20 more for a case of cauliflower, and prices for broccoli, celery and many other products soared this time last year. Currently our pricing, averaged over the entire range of commodities, is fully 6% lower than one year ago and will be 8.5% lower this week coming. Pricing this week is variable with some ups and more downs as growers in Salinas clear fields and drop price to move product pre-Thanksgiving. We do not know how long this will last, but there is usually a big correction leading up to or just after next week’s big Thanksgiving weekend in the States.There are very few other fundamentals in play, with prices very stable across most fruit, most imports and tropical, as well as root crops.Apples – no shortage here – a continuing huge selection of BC fruit. We’re introducing a 5# Rebel pack this week as well – the larger format 5# bag should come in at an attractive retail. Honeycrisps are slowly winding up.Avocados – prices are finally starting to decline with ample fruit in Michoacan and heading into a four month peak supply period. A struggling CAD$ isn’t helping, but our pricing continues to be lower than what we see in the US Organic wholesale market. Sales of Rebel Avocados continue to grow, nearly outpacing the fancy bagged pack.We had a great meeting this week with the directors of the Pragor Coop. For the first time in their history they are now selling virtually all their fruit in North America as Fair Trade – growth for them of 1000% in Fair Trade sales. That area of Michoacan is so needy of social infrastructure, and they will be able to invest much more heavily in elder-care and education. Awesome!Blueberries – a meagre Argentina start will transition over the next week or so to Chile, starting with the 125gm pack for a short period, then into 175gm well before Christmas. Big crop!Grapefruit – Prices are crumbling quickly with new areas in California back into production after a long summer off. Little change to our Fair Trade program which is the meat of our sales.Grapes – you can tell by this week’s pricing that the end is nigh for the CA grape season.Lemons – after the major adjustment over the past 3 weeks, prices are now stabilizing as growers can see what their ultimate trajectory will be over all growing districts over the winter months.Mangos – with Peru now shipping Kent’s (a start date fully 5 weeks ahead of when they normally started 5 years ago), we are aiming for a glut market with Ecuador begging to move their crop before the first Peru arrives. Lots of price pressure in Peru is expected with this first-ever major cross-over with 2 countries competing in the same market for a much longer duration, and with their national currency pegged lower against USD and falling, competing with Ecuador whose national economy runs entirely on the US dollar also doesn’t help them. We won’t see anything from our traditional Fair Trade coop suppliers until just before the Christmas holiday.Mandarins – back into good supply after a short gap – that’s what happens when a boat breaks down.Oranges – prices are slowly moving down on Navel’s as more tree-coloured fruit is coming off. Of note is the beginning of the Desert Sweet program out of Sonora. This winter Valencia crop produces one of the finest oranges we ever see – both quality, sugar and flavour. Our primary supply is from Citricos, a cooperative with nearly 500 members and one of the most ultra-modern facilities we’ve ever been in. More varieties of oranges and tangerines are on the way, with Dixie Tangerines, Satsuma and Cara Cara now being packed. Expect Satsuma prices to drop a bit as more central California growers get into the fray.Pears – nearly every known commercial variety in stock. We just got in some Washington Bartlett’s that have started to break colour – the grower would appreciate help on this so ask for a great price and you will get it – like a really great price!