MARKET REPORT – MAY 20, 2016
Well, let’s start off with avocados.
In the last 2 weeks the prices paid to producers rose 20%. Avocado prices aren’t controlled per se, but there is a daily report produced that is available on-line to every grower that shows what the price paid to producers by the major packing plants was the day before, so growers know exactly what they should be paid for fruit cut in their orchards. This is the email sent from Salvador at Pragor:
“As of May 4, the price rose to $ 32.00 and in afternoon at $ 33.00 Thursday 5 May, will rise to $ 34.00 and closed at $ 36.00 pesos Saturday May 7, closed at $ 37.00. Sunday May 8, closed at $ 38.00 pesos Tuesday 10 May, fruit is cut to 39.00 pesos in the same orchard Monday 9. From Wednesday 11 to Monday 16, the price remained at 39.00 pesos. Today I am trading at $ 40.00 per kilo even.”
Wow, we’ve never seen such a fast increase, and this is entirely based on extremely high sales for the Cinco de Mayo holiday which decreases the amount of fruit left to sell for the season. There is always a price increase after the holiday, but usually 5-10%. It doesn’t seem to matter how many new trees are planted, including thousands of acres planted over the last few years in neighbouring Jalisco, supply is not keeping up with demand on the fastest growing commodity in the produce business. Sales will likely increase 30% again this year, with Mexico barely able to keep up to 5-10% growth, and Peru and Chile planting vast acreage to fill the void. California would seem to be the most obvious place to increase production, but on-going and worsening water restrictions make this impossible; in fact U.S. avocado production has fallen annually for many years – old trees aren’t replaced and orchards damaged by wild fires haven’t been replanted.
This is Fair Trade Month: We’re gearing up for the last 1/3 of the month with likely the best selection of Fair Trade products we’ve ever had, and everything on this week’s specials sheet is Fair Trade produce. We wouldn’t have been able to move the trade of fresh fruit and vegetables to a Fair Trade model without all of your help – you are the front line explaining what direct trade and social premiums are to your customers, and sometimes having to justify higher prices as well. And you know that on top of higher pricing to give producers a reasonable return and pay their staff well, the social premium surcharge built into your price averages out at 15% on top of that. For bananas, we often use $1 a box as an example, but it’s far more – first, that’s a US dollar, which 6 weeks ago was really $1.40, but on top of that we pay another 40 cents to Fair Trade Canada, of which over 50% filters through FLO International back to program development in the Global South – training growers and workers and helping establish cooperatives. Well, give or take, your sales of Fair Trade fruit and vegetables bought from us over the last 7 years since we brought in our first container of bananas in 2009 have created over $1 Million dollars in social premiums that have gone back to growers for community programs and technical training – and for us – a little company trading produce within a comparatively small population base, that is an amazing feat – and that all comes from your purchases from us, so on behalf of literally thousands of small producers and thousands of workers – in this Fair Trade month, a huge thank you.
Next, but not without great importance, we are launching our dairy program this week. Please contact us for all the details, listings and prices.
And in other news – an amazing selection of BC produce! Wanna see it? It’s on the price list – just filter the place of origin column in Excel and voila! It has been an incredible start to the local season, thanks to El Nino and climate change – even the news media has tuned into the fact that cherries are going to be harvested in May, and blueberries in 2 weeks, all depending if the sun returns to the Fraser Valley. Note listings for local salad, lettuce and even hothouse zucchini!
With apple prices soaring, we are now listing Cat 2 apples from S. America – and Cat 2 aren’t ugly pieces of crap, they are more of a domestic grade, and better than C (Commercial) we pack locally. Just so ya know. Prices on XFCY fruit continue to climb as US supply runs out, and Americans, just like us, would rather pay higher prices for domestically produced apples.
Have a great long weekend, and for our customers in Saskatchewan and Manitoba, have a hot sunny time at the lake, because we’re going to be blessed with cool and rainy weather across most of BC and Alberta and snow on the mountain passes.