Discovery Organics | MARKET REPORT – MARCH 24TH, 2017
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MARKET REPORT – MARCH 24TH, 2017

MARKET REPORT – MARCH 24TH, 2017

Now, don’t you be worrying about our supply on leaf, kale, broc or celery.

Apples:  We’re hitting that time of year when three stars collide.  BC Supply is thinning down with some shippers done for the season.  We are, for all intents and purpose already done with BC Braeburn, Ambrosia, Gold Del, Granny, Pink Lady etc. with small volumes left of some.  And we’re about to run out of Gala and have transitioned to Washington on those as well. So we transition now on more varieties to Washington.  At the same time, Washington growers start to assess inventories compared to their selling windows and balance sales with price.  But we’re just weeks away from the first Argentina and Chilean apples, and those growers, after having seen extraordinary prices over the past few years always start out high, often matching sometimes very high pricing on Washington fruit.  So expect, as usual, a choppy transition for us between the end of B.C., late season Washington and first South American.  Chile has had an extremely rough growing season – fruit in some areas was literally scalded on the trees with temperatures staying over 40C for far too long.  Irrigation systems were under far more pressure than normal, and wildfires destroyed thousands of acres of fruit trees, vineyards and kiwi orchards.  Any decline in volumes out of Chile can’t be matched with any extra from Argentina or NZ – being that Argentina has very high demand from Europe, and more and more NZ organic fruit is being diverted to China, with a nearly insatiable appetite for fresh organic fruit.

Avocado:  Prices continue to go up, and no matter how much new acreage goes into production every year, it never seems to be enough.

Berries:  Prices remain high on Mexican blues.  Mexican blues is a new thing, and the limited volumes are being devoured in a market that has usually seen a 6 week gap between the end of the Chilean season and beginning of California.  There is some berry harvesting going on in California, but demand is high, and prices are topping Mexican by a substantial percentage.  Raspberries of course continue to be tight and always stay that way unless there is a really great run of perfect weather in the Watsonville area, and that hasn’t happened for some time.  Rain is falling again in that area.  Strawberry pricing has finally crashed.  For the first time since last July there is strong production still out of Zamora (central Mexico) San Quentin (Baja) Oxnard, Santa Maria and now Watsonville kicking in this week.  With that much production, volumes have increased substantially causing prices to drop.  Expect a glut market for a few weeks until Mexico shuts down for the summer.

Lemons and Limes: Strong markets continue to keep prices high – this market won’t adjust significantly as move into sparse supply times in the summer months.  Same story with limes, with high demand keeping prices in a similar range as Lemons.

Oranges:  We are now peaking on all things orange – not necessarily on volume or price – just the plethora of varieties available.  However, we know when the depth of selection starts to wind down when we get our first Pixie Tangerines in from Churchill Orchards – delightful little tangerines that they are.  Despite rains making harvesting difficult, this has been a sensational citrus season so far.

Pears:  Other than missing a few specialty “heirlooms” out of Argentina, it’s a pretty grand selection – all major varieties in both colours.  Pricing continues reasonable with supply from Washington CA rooms as well as Argentina.  No indications that Washington is even close to finishing up on Bosc or D’Anjou yet.

Asparagus:  This is the strongest point of the season for sales, with prices reasonable with several districts from Caborca in Mexico north to Fresno in the game.  Ya know, if asparagus didn’t take 3 – 4 years to produce a good crop after planting, a lot more farmers would get into this, but it’s hard taking land out of production, pay for roots, and weed and irrigate for years without any income on that part of the field.  So we will continue to be in a market, year after year, where there is not enough supply, and organic will continue to range at 3 times the price of conventional.  Finding growers to take this on has been on my bucket list for 15 years.

And then there’s this problem:  Rain and cold continue to plague growers in all coastal growing areas as they race to get anything ready into the market while prices continue in what is insane mode.  It would make sense to be growing broccoli in a greenhouse with prices this high.  As we grind quickly to the end of March, Salinas (the hub of California production) has seen just 3 days of good heat units this month, with far too many days with highs of 12 – 17C   Not very inspiring for most crops that won’t budge at those temperatures.  On some popular items, including broccolini, we are looking at a potential complete gap at some point over the next 3 – 4 weeks.  Miraculously the only line item with reasonable pricing continues to be celery.  With prices in the crazy range a year ago, far too many gold-digging farmers planted far too much celery this year, keeping pricing at conventional levels and well below production cost.  Celery takes a long time to grow, and coastal growers won’t have any to ship until May or even June this year after months of ongoing cold and wet.  The big supply area continues to be Imperial and Yuma.  But most of those growers are shutting down, and are not going to stay in production when celery is the only thing left in the field.  I alluded to this a couple of weeks ago.  So expect celery pricing to start to jump up and quite quickly as the market quickly goes from feast to famine.

Now, don’t you be worrying about our supply on leaf, kale, broc or celery.  We’ve been working with Agrofresco for 4 years, running a bigger and bigger program, simply so that when markets get tight, like this one, we have pretty much guaranteed supply and a little bit more room to play on pricing.  Some called us crazy.  We’ll continue to rent that word.

Kale and Lettuce:  The same supply situation is about to hit on these two as well.  Desert growers are done.  Kale plants are worn-out, tired, stripped bare and suffering from insect pressure, and coastal growers aren’t ready.  Lettuce is worse.  Lots of good stands have made this more affordable than the sometimes scant romaine supply, but this is about to change, with many growers now limited on green leaf.  Well, if there’s virtually no romaine out there, most of that business has moved to green leaf, decimating supply.  There is lots of Romaine out there, don’t be fooled, but such a vast amount is dedicated to the cut and core markets for salad blends and bagged hearts that when there is a supply / demand / weather issue, the bulk 24ct market is the first to suffer.  The major multi-national supermarkets always have to have their bagged hearts and growers don’t like pissing on the parade when there are nearly unimaginably large contracts at play.

BC Spring Greens:  Expect to see quite a few listings for BC kale, collards, Raab etc. for the next few weeks.  These are last year’s plants waking up after a cold, cold winter and throwing out as much greenery as possible before they go to seed and bolt around the middle of April.  Often people assume that B.C. greens are “on” when we list these – not so – there was snow on the ground in the Fraser Valley 2 weeks ago.  It was -4C the other morning. Nothing is “on.”  Virtually nothing is in the ground.  So just enjoy this little splash of local greenery while it lasts, and then wait patiently 2 months for the real start of the local season.

Peppers, Cucumber, Zucchini.

This whole range of sub-tropicals is about to surge in pricing as well, with so many plantings growing long in the tooth and temperatures heating up to 40C plus for some Sonora  Desert growers.  Just watch your retails with prices currently quite “jumpy.”

And now for more disastrous news!

Some of you have been around with us long enough to remember back to the incredible flooding we saw a few years ago in northern Peru, right where all our banana and mangos are grown.  Here’s a video from APPBOSA coop – literally down the street from our BOS growers -= copy and paste into your browser!  With roads gone, bananas are being shipped on make-shift rafts!

Weird Coastal El Nino Clobbers Peru: 80 Killed, $1.4 Billion in Damage

The world’s costliest flood disaster of 2017 is still unfolding across parts of coastal Peru, where extreme rainfall atop normally dry terrain has led to episodes of major flooding over the last few weeks. More than 110,000 people have been displaced by flooding since December, according to Reuters, and more than 80 deaths have been reported.

The death toll makes the floods of 2017 Peru’s deadliest floods since 2009 – 2010, when 158 people died in flooding between December and March. Preliminary damages from the 2017 rains and flooding in Peru are estimated at $1.4 billion (0.7% of Peru’s GDP), according to insurance broker Aon Benfield. Significant damage has been done to Peru’s infrastructure, with 2,188 kilometers (1,360 miles) of main roads and 928 kilometers (577 miles) of rural roads destroyed, along with 194 bridges. Approximately 671 kilometers (417 miles) of irrigation canals have been destroyed and as many as 23,000 hectares (56,000 acres) of crops damaged or destroyed, including grapes, mangoes, and bananaFigure 1. Huachipa district, east of Lima, on March 19, 2017. Flash floods and landslides hit parts of Lima, where most of the water distribution systems have collapsed and people are facing drinking water shortages. Photo credit: ERNESTO BENAVIDES/AFP/Getty Images

According to EM-DAT, the international disaster database, the most expensive natural disaster in Peruvian history occurred during the El Niño rains of 1983, when heavy rains unleashed a landslide that killed 596 people and cost $2.4 billion (2017 dollars.) The Global Facility for Disaster Reduction and Recovery (GFDRR) estimated total damages from the rains and flooding of the 1982 – 1983 El Niño amounted to 8.1% of Peru’s GDP. The El Niño rains of 1997 -1998 also exacted a heavy toll; the GFDRR estimated that Peru suffered nearly $2 billion in losses (5.9% of GDP).

Flooding where it’s been raining—and where it hasn’t
The current Southern Hemisphere summer is Peru’s rainy season, but this year has delivered in a much bigger way than usual. At least two stations in the far northern coastal province of Piura recorded about 10 times their average rainfall for the period from January through March, according to NOAA’s Tom Di Liberto. At a desert location like this, it’s to be expected that the wettest years will produce several times the seasonal average. Still, according to Di Liberto, “2017 is already likely one of the wettest years on record for San Miguel in the Piura province.” San Miguel de Piura had racked up 10” by early March, compared to a typical wet-season total of just 2”. On March 3, the town of Partidor reported an all-time daily record of 258.5 mm (10.18”),

While the heaviest rains have deluged the Pacific-facing west side of Peru’s coastal mountains, especially toward the north, the resulting floods and mudslides have affected many areas downstream, between the mountains and coast. This includes Peru’s capital, Lima, where major damage and disruption (including a disabled municipal water system) have occurred despite virtually no rain in the lowest-lying parts of the city. Just 0.7 mm or 0.03” fell at Lima’s airport from Feb. 2 to Mar. 23. Lima is a premier example of a coastal desert city, with a climate dominated by gentle onshore flow atop cool, upwelled Pacific water. The result is a paradoxical blend of high humidity, frequent cloud cover and fog (especially in winter), but very little rain. Lima’s annual average precipitation is a mere 0.6”, and the city’s wettest day on record—January 16, 1970—brought just 17 mm (0.67”).

 

 

 

 

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