MARKET REPORT – SEPTEMBER 08TH, 2017
Right off the bat here, if you thought we had quit publishing a market report because you haven’t seen one for a long time, I don’t blame you, but we’re back! To be honest, other than a weekly announcement about what’s new from local growers, there has been very little to talk about without it just sounding like a sales pitch! I’m not going to hit every commodity today, but touch on some primaries. As you know, the biggest impacts on production, volume, and pricing are drought, heat, rain and storms, and with so many weather impacts over the last and next couple of weeks, that’s the focus of today’s chit chat. You may want to open up Google Earth so you can follow along.
Starting first with Apples, other than remnant high pressure late varieties like Pink Lady, all our apple supply has switched to BC as we see releases of Gala, Mac and early Fuji. You will be relieved at pricing with new crop BC at 30-40% cheaper than Chilean and NZ Fruit. Why were prices so dang high over the past few months? A surging demand for organic food across all of Eastern Asia, including China, and a rapidly growing organic segment at retail in Vietnam have allowed New Zealand growers to divert most of their attention away from the Canadian and US markets, and with cheaper and faster transport up the coast to Asia they have taken full advantage of this huge segment. (As a note, BC Ambrosia’s are a market star in Vietnam.) Removing most of the NZ fruit from our market has allowed South American producers more price control, and with new plantings in Chile unable to keep up with growth, well, that leads to high prices.
Avocados. This is getting interesting. California fruit is so unrealistically overpriced right now at up to $4.00 per pound (yes, you heard that right, and that’s in California, in US Dollars!) Mexico is being quite cagey with their crop forecasts so we don’t have a really good handle on how to gauge that market. Many Michoacan growers last year, who were selling for very good pricing in the winter and early spring, were kicking themselves in late spring and early summer when prices doubled. So this year, we expect to see producers leaving a lot more fruit on the tree, not only to size up more, but to get what in theory will be bold pricing. In the short term, with so much fruit being held back, and seeing the unheard of prices for the last of the California crop, prices right now are exactly 3 times what we were paying in September just 3 years ago.
Our Pragor Coop growers have just released a video – we’ve sent that to you, which you will get unless you have a limit to file sizes on incoming emails.
Bananas: We’ve pretty well stuck with Mexican bananas through the summer and that will likely continue for another 6 – 8 weeks. Our BOS growers in Peru are getting back on two feet after monsoon rains damaged or destroyed 10-15 of producing banana plants in the spring. The last hurricane through Mexico a week ago (Lidia by name) didn’t come close enough to Colima to have much impact for banana growers. But on the flip side it made a direct hit in Baja. This is San Jose del Cabo pictured. Farther north in Santiago, Baja Sud, where much of the Baja mango production is located, the mango crop was devastated just before harvest! We have worked with some of these growers over the years and our hearts go out to them.
Blueberries: It’s always great when everyone comes through the BC Blue season unscathed – but that’s the best word to describe it. No early frosts killing bloom. No increase in known pests. No awful heat waves during peak season….and the rain held off until the last harvest date. Now, there was some major heat days, but with such a strong market for frozen blues, it is just a distraction. But the season, is done for all intents and purposes, and today’s high humidity and drizzle has pretty well wrapped that up.
Grapes: It’s been a great season, 5 months in since we started in Mexico, and no end in sight. The big change will be BC grapes that have just started, with Black Coronation and Green Himrod. These are always a hit with a much different taste than other varieties. Coronation were introduced 12-15 years ago to replace Concorde (the black seeded variety) that is the staple for Grape Juice.
Citrus: Well, here is the big story of the day – where several factors are coming into play very quickly. First, it’s been a crappy year for California producers, with a small summer Valencia crop – poor flowering during the monsoon spring and then baking heat ended up producing a lot of small fruit, and much more Choice grade fruit than normal (over 50%)
This is from Jeff at Sunkist growers (the largest coop packing house in California)….” A few notes as we are in the toughest month of the year for California citrus on supplies and arrivals. Valencias – small fruit is extremely tight. Just look at the 113/138 prices, I can’t ever remember seeing them this high even in a freeze year….Grapefruit – 32s and smaller very tight. Quality will be a struggle the rest of the way, but at least we have some grapefruit…”
So, at this moment, Hurricane Katia, after rolling around in the Bay of Campeche off Veracruz for over a week as an unorganized tropical depression, sending band after band of torrential rain over Central and Eastern Mexico, is now expected to make landfall in Veracruz having grown virtually overnight to a Cat 3 storm. That is going to impact the orange and lime markets significantly. A lot of juice oranges come from that area. Second, you have a tight supply of marginal quality oranges in California (and a true shortage of yellow lemons.) And finally, we have Hurricane Irma about to rip into Florida. This is a very large hurricane, and although its peak winds will drop after it makes landfall, it will still be ferocious, and if I was an orange being ripped off a tree, I don’t think there’s much difference between a 300 kmh gust and a 360 kmh gust. Irma is a much different storm because it’s huge with a hurricane force wind field wider than the entire state so it will devastate crops all over Florida, and with Florida producing ½ of the oranges in the US, you can imagine what will happen to pricing. If Hurricane Irma can pile up sailboats into a heap of rubble like it did in Antigua, imagine how oranges would stand up. Unfortunately we’re also 2 months out before northern Mexico hits large volumes, so all the cards are stacked against us on pricing on most citrus. The only saving grace I guess is that we have our first order of Pragor Mexican grapefruit arriving on the weekend and we’ve been able to price it below current California markets a bit. That’s the only help we have to offer on that.
Lemon harvests – actual ALL harvests out of California have been limited because of weather (see below) but that changed in the last few days and with better volumes after a weeklong gap on harvest, lemon prices are actually off. Coupled with some very nice rebounds in the Canadian dollar, you can expect pricing to be lower today – a lot lower!
Mango pricing is starting to inch up – partly because of the damage in Baja, and because it just always goes up on the Sinaloa and Sonora crops because there isn’t any other area in production.
Melons are now mostly BC and Washington. If the California crop wasn’t already pretty well burnt out, last week’s heat finished off most plantings except those planted very late purposely to extend the season.
Stonefruit – it seems we just started with peaches and nectarines and the season is quickly winding down already with most cling-free peaches through the supply line. Quality is excellent. The last varieties normally produce fairly small fruit, but this year, Crest and O’Henry are coming off in super-size-me sizing and are sensational. Don’t be scared of 30ct peaches. V/F Nectarines are also large and very nice.
Plums – we’re about mid-way through the local plum season – you always know that’s winding down when you see President and Black Friar, two of the last varieties, but there will continue to be good supply for a few weeks.
Finally – time to talk Veg. There is thankfully tons of local production right now – we’re far from done -8 or 10 weeks to go in local season, and excellent supply. However, we still seem to need Broc, Cauli, Celery and Spinach from California, and the weather (or lack of) last week and ending just a couple of days ago was brutal/hideous. Even San Francisco, (one of the few places anywhere on the West Coast where you should have a fleece jacket on hand even in August) hit temperatures that are precedent setting. Many cities in California broke all time heat records, and for some, including San Francisco, by a LOT – 112F (45C).
Every crop has suffered, and many shippers do not want to send to Canada right now because they say the quality isn’t there. Stressed broccoli and celery just don’t hold up. The biggest hit is strawberries, where anything on plants including low colour and white fruit is toast, so most growers are stripping plants and tossing it all. Luckily Watsonville only hit 30C on one day, protected by some ocean fog, so there is still fruit, but if it’s shippable, the prices are quite spendy. Once again we’re blessed with our 12 year deal with Esteban Martinez and he’s being very careful about what he puts on trucks!