Discovery Organics | MARKET REPORT – DEC. 10TH, 2016
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MARKET REPORT – DEC. 10TH, 2016

MARKET REPORT – DEC. 10TH, 2016

A fast update interspersed with fun stuff. 

Other than a current cool-down across California (temperatures a couple of degrees below normal) there isn’t much of a weather story affecting pricing, unlike prior years at this time.  Only change is that the continued flow of small volumes of local kale, chard and dandelion has come to a quick halt with all fields frozen across the Fraser Valley and south Vancouver Island.  These cold temps will end spinach and bunch carrots from Ralph’s in Mt. Vernon, and will temporarily impact leek harvest – this weather just makes them better, but they would need to be chiseled from the ground, so we’ll wait until this cold snap ends and the frozen slush has melted from his Skagit River land.  We have full listings of his product that was harvested just before this messy weather started.

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The volumes of organic green veg available out of California (both Salinas and desert) is outstanding, and glut pricing continues – in some instances even below conventional – esp. on broccoli and celery.  That’s a combination of growers over-planting, as well as several corporate farm operations expanding production in Mexico – which is all fine and dandy, but the market play over the last few years has not been driven by increased demand, but by year after year historically un-natural cold blasts and water shortages.  So this year we are seeing too much product (at least until there is a freeze in those areas.)

On the up-side, even with a crappy Canadian dollar value, we are able to offer product at prices far below this time last year, which hopefully will equate to higher volumes for you.  On the downside, because all these new farm operations in Mexico are partnerships with Mexican farmers, they will be the first to be hurt if returns are very low, or if product isn’t sold.  Especially on lettuces and broccoli, which won’t hang around in the field waiting to be harvested, instead having a very short window.

These freezes over the past 6 years were one of our motivators in starting direct trading relationships with vegetable producers in Mexico as well.  We had started that process earlier with mango, avocado, banana and many other projects (mostly Fair Trade.) But the other reasons were quite lofty.

The biggest single concern for independents like us in the fruit and veg industry at this point isn’t weather, or water, or pricing – its consolidation and vertical integration.  It is the fear that there are a growing number of multi-national grocery chains, with enough buying power and clout to control far too much production with exclusive contracts and pricing.  And far too many super-power ag conglomerates stepping up to be part of that integration, which in the end has historically displaced small growers.  (When it comes to organics, another fear is that corporate control will lead to pressure to lower organic standards – leaving small players like us with a weaker voice.)  These companies are primarily conventional operations, for which organics is a niche market.

There are days when we can’t get certain products from shippers – not because fields are lean, but because every box or truckload is committed to chains with hundreds and hundreds of locations with just-in-time commitments and contracts.  We saw the writing on the wall, and simply decided to control our own supply line on a wide range of products.

One very good reason was that if we had an office and full time manager working in Mexico, working at those farms on everything from seed selection to supervising packing and cooling, we could have control of not only our supply chain, but packing to our specifications, as well as quality. We are now in our 4th season of working with Gustavo at Agrofresco in Dolores Hidalgo.  It is nice to go to a professional ranch and see fields that are being grown just for us.  Here’s a pic of Annie and Gustavo talking about cabbage a few weeks ago.

We would have a wider range of products with Gustavo, but specifically chose mostly brassicas because his area gets the occasional freeze through the winter.  His ranches are all above 2000 meters, so chilly nights are to be expected.

 

 

 

 

 

 

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A couple of hours away is the huge production area known locally as El Bajio – an area that is literally 25,000 square kilometers housing some prime production land – and also 500 meters lower, with very little chance of frost.  There are literally thousands and thousands of hectares of production in this area.  And it was here that we started seed and production trials with Alvaro Nieto (Santa Amalia is his operations name) early last year.  We asked him to start production of a wide variety of crops that aren’t happy when it freezes to widen our supply, for every reason stated earlier – Chard, Cilantro and baby Bok Choi for example.

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He is a professional grower, already producing large volumes of Asian vegetables for customers in the U.S., and he’s been pretty excited about the ‘fun’ of trying new varieties.

He’s also a great guy!  He has been working for years to re-create bio-corridors across and surrounding his fields to bring native species back to those areas.  He goes up to the highlands and brings back seeds or transplants of native plant species and incorporates them into buffer zones – including up to a dozen different types of oak trees.  The seedlings of some of these take up room in his greenhouses.  His efforts have paid off – he has increased the number of sighted birds at his ranches from a meagre handful to many dozen.  His motion sensor field cameras have caught night-time visitors in action that no one had seen in that area because he restored a pond and creek system – including lynx, fox and cougar.

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He also literally built a school and daycare in a nearby town, not only to increase the education opportunities, but also to allow more women to work full time.

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And he invested into all the equipment to have a proper tortilla factory for his staff. His employees can buy their tortilla at a price that will be below the market price and the corn used to make the tortillas will be organic certified!

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So we’re pretty happy to introduce his products next week.  All going well we’ll see them by Tuesday, but we also know that the first time a grower ships to a new customer, especially products they’ve never sent north before, we nearly expect some pain crossing the US border.  Especially now, with increased animosity between customs and food inspection folk on either side of the border, thanks to recent US election rhetoric.

We also have to thank Rafael, our tireless crusader of all things organic and Fair Trade, who has been working with us for 7 years, from our first experiments of doing our own farming in San Luis de Sonora and Los Mochis.  Rafa is involved in organic standards as an inspector, and is also a Primus food safety consultant, as well as his decades of managing production for several major players in the organic industry.  It is his daily perseverance that lets us develop these programs.

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Looking forward to getting this beautiful stuff in a few days!

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Here are some tids and tads you should know about – we will be tight on blueberries.  David, who coordinates packing from the small growers we are working on couldn’t get a flight booking from Santiago so we will look for short term altlernatives.  Lemons, yes those lemons are now tight, with cold weather hampering supply in one of two current growing regions.  Lots of new citrus treats for you as the selection increases. What are limequats?  Well, cross a lime with a kumquat and look what you get.

Maybe Ursula will take some pics this weekend of this special stuff!

Broccolini is now short with some gaps and desert production lagging.

Have a good snowy weekend!

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