MARKET REPORT – NOV. 9TH, 2018
Who said this was an easy business?
When I drove to work this morning, I listened to a story on CBC about the pending avocado shortage. Here is the latest from the produce news this morning.
“The Association of Producers, Packers and Exporters of Avocado in Mexico (APEAM) says that disruptions to Michoacan operations are continuing despite an agreement having been reached during talks earlier this week. Last week, hundreds of growers who are unhappy with the prices they were being paid by packers paralyzed harvesting and packing operations by blocking roads with vehicles. They are seeking to establish a minimum price for the fruit, but APEAM says that such a move would be illegal because competition laws in both Mexico and the U.S. allow for free trade between individuals. Growers have also been protesting against fruit grown in other parts of the country being exported illegally from the Michoacan to the U.S.
In a statement, APEAM said that during a meeting on Tuesday with growers and representatives of the government agency the Federal Competition Commission (COFECE), an agreement was reached to end the roadblocks and to meet again later this week. However, it said that some growers have failed to comply. As a result, APEAM said that operations have been halted indefinitely for safety reasons.
“APEAM has decided to stay out of the conflict since after listing to what was said by the group of non-conforming growers and having listened to the recommendation of the COFECE, it is evident that this related to a trade issue between individuals,” it said.
“In this sense, the association, adhering to its statutes, is refraining from participating in what is clearly an illegal act with severe legal and criminal penalties, the intention to try and fix and manipulate the price of avocados.”
Local media Mexico News Daily reports that the strikes are costing the industry 85 million pesos (US$4.3 million) a day.
It said that more than 1,000 producers stopped work and set up checkpoints on highways in 11 municipalities last week. The producers on strike are reportedly asking for a minimum price of 35 pesos (US$1.75) per kilo.”
This, by the way, is exactly why we have been buying Fair Trade avocados from Pragor since 2007! Michoacan growers are asking for a minimum price for their fruit (not the packing and boxes) of EXACTLY the minimum we established with Pragor in 2007, and for the last 10 years, we have always paid them more, never having to dip down to the MG price.
The point of re-printing this article was more about the chaos in Michoacan and the low prices growers still get. There are lots of Avocados out there – as mentioned last week, Jalisco has become a major producer over the last 10 years, and although their fruit isn’t allowed in the US (yet) it is certainly available in Canada, Europe and Asia, so although the crunch/shortage is already appearing in the U.S., we do have back-up in times of need. Normally when we hit a long gap like we did last summer, we turn to growers in California – our suppliers for citrus who also produce avocados in the summer….and of course growers in Jalisco are making hay while the sun shines – getting premium pricing while supply is limited. Watch your retails for the next couple of weeks.
And onto Bananas. We’re in a bit of a crunch, thanks to CBSA, who have decided to do a full “de-stuff” inspection of the container we should have been shipping to you this week. That means taking the container to an off-site inspection area, making sure it only has bananas on-board, putting the bananas back into the container, returning it to port, and then letting us have it. We have dealt with Border Services dozens of times with this situation over the past 11 years of importing bananas outside the influence of multi-nationals. Crap! We’re subbing with the next best thing, GROW branded Organics Unlimited fruit, also a mission-based piece of fruit.
Apples: Why in the news? Nearly every one of the growers we work with is about to run out of Gala. A reminder that this is November, not April. With a huge crop especially of smaller fruit in the previous season, the Gala trees apparently had a meeting and decided that the 2018 season should be a good year to take a rest and just produce a very small crop of large fruit instead. We’ll keep an eye on this, but expect we will be only listing WA Gala’s in the New Year.
Citrus: Nothing on the radar in this department. Markets are strong, prices are high, it ain’t been a high volume season etc. However, a lot of grapefruit etc. is produced in Ventura county.
If you’ve missed the news, 3 massive wildfires have sprung from nothing in the last 2 days, one of them growing at the unfathomable 80 football fields per minute. With evacuations underway right to the beach in Malibu, once again we expect to lose more citrus and avocado orchards as these fires rage, fueled by 80kmh. hot, dry winds flowing from the Central Valley towards the coast. Although not reported that much, California’s multi-year drought that saw extreme conditions from San Francisco south from 2011-2015 didn’t end, things just got a bit better, but now we’re seeing ED4 Extreme Drought conditions in the North, and vast areas in other stages of drought.
Orange prices are being driven by a few factors: Very, very, very little left of California’s summer Valencia crop. First harvest of Desert Sweet Valencia’s started yesterday in Sonora. Very limited volume of Navels available. The first variety that colours up has little production compared to main season trees across the Central Valley, where those are grown. Initial reports are for a strong year, with fruit sizing up very large. Expect the deals to be on 56 to 72ct for the next few weeks. Having been in the Citricos pack house a couple of times, sampling a lot of fruit, I’d be hard pressed to find a better orange this time of year than that early Mexican Valencia crop. Citricos is a huge co-op of over 500 growers – the largest packer in that area around Hermosillo.
Things are heating up on the veg side. There is little of anything green left to harvest in the Fraser Valley, the last hold-out of local production. Most growers are winding down quickly pretty much across the board. With the transitions on in California, coupled with their huge Thanksgiving pull over the next couple of weeks, just hinting to watch your retails on the whole green veg category as vendors adjust pricing on the fly. Most markets are trending up. For those of you who have asked, our first Ecocampos order should leave Mexico early or mid-next week, and run consistently through June. We always look forward to this program!