The Source - February 12, 2020

MIDWESTERN / EASTERN REGION:

Mother Nature continues wreak havoc across parts of the Midwest and East Coast. For those trucks delivering to the parts, expect truck delays due to heavy snow and road closures.

Some smaller Michigan shippers are done for the season (13 shipping last week, 9 this week) along with some regional shippers in the East and Northeast. With each week that passes, demand slowly shifts to the larger shippers and to the Northwest. Looks like smaller, Red Del. apples have better availability vs. Galas, but there are other red varietals commanding aggressive prices (Jonagold, McIntosh, Empire, etc.). Quality remains strong with more than ideal shelf-life.

WESTERN REGION:
Washington
It was a bit quieter this week with regard to volume. 125ct-138ct Fuji and Red Dels USX/WAFCY remain the bargain buys; even though some shippers are trying to firm up their floor prices on Red Dels. Gala apples were a little more plentiful in the last two weeks, but prices have firmed up and remained steady. Smaller Grannies are a little snug coming into this week and look to remain that way through next week. We should have no issues with availability . on foodservice sizes for the foreseeable future.

There are no weather conditions in the forecast for trucks to contend with. For deliveries heading to the Midwest and East Coast, expect some delays/road closures due to freezing temps and snow/rain.

Both regions in Mexico (San Luis/Caborca) had cold temperatures that slowed production last week. This week also started out cold, but we should see warmer temperatures at the end of the week which should help production. The market is very active on both coasts due to low production.

California crop is estimated at 369 million pounds which is 70% higher than last year's crop. Substantial volume is expected in April and should peak in May/June. Strong volume through July and seasonal decline is expected in September.

The avocado market has drastically changed as of last week. Although overall demand has not increased post Super Bowl, we are seeing gradual price increases on 48’s and larger. There are multiple factors as to why the industry as a whole is seeing an active market post Super Bowl. We were seeing limited harvest volumes last week due to a no pick/no pack holiday (Constitution Day)in Mexico, followed by three rainout days. Mexico received a substantial amount of rain causing disruptions to the harvest. Growers in the region of Michoacan have also scaled back and paced the harvest to control the market. Mexican growers have been posturing for elevated field prices for weeks now. These growers know they have significant leverage and are resisting picking.
Japan, Canada, and Europe rely on the Jalisco avocado sector for supply. Jalisco is currently winding down on production as they anticipate transitioning into the new crop (Mendez Crop) come late April. There may be a one to two month gap period between crops, putting more pressure on the Michoacan crop.

Alerts:
Mexican growers posturing for elevated field prices and scaling back on the harvest. 48's and larger holding at a premium. Demand exceeds supply.

Green bell pepper supplies in the east are steady. Over the past couple of weeks, pepper supplies have been sporadic with growers only packing a few days a week. Now on the western coast of Florida growers are starting new plantings and supplies will start to be more consistent. Pricing has increased slightly mainly due to decreased supply coming from Mexico. In the next 2 weeks, more growers on the east coast of Florida will start new fields helping supply and quality even more. Supply is coming from both coasts of Florida and quality has been fair in most locations, considering the weather this pepper crop has been through product looks good.

Green Bell Pepper- Green bell pepper supplies have started to decrease from both the Sinaloa and Sonora crop. Quality from both regions is good. Supplies are expected to decrease on all pack styles as we approach the end of this week. The market on green bell pepper has increased slightly and stabilized this week. Light supplies of green pepper are also available to load in McAllen, Texas.

Red Bell Pepper- Red bell pepper supplies crossing through Nogales this week continue light on both Hot House and LA rouge varieties. Red bell supplies are projected to remain light as Mexican growers transition from fields. Growers with the open field la rouge variety continue to access for potential damage due to recent cold weather along with rain these past few weeks. Quality on Mexican red bell pepper on both varieties and in all sizes and pack styles are currently fair. The red bell pepper market has increased due to lighter supplies. Light supplies of Red bell pepper are also available to load in McAllen, TX.

Yellow Bell Pepper- Light supplies of yellow bell pepper continue to be harvested in Mexico from Sinaloa. The market on yellow bell pepper remains steady/high this week. Quality on yellow bell pepper crossing through Nogales from Mexico continues to be fair to good with sizing mostly small to medium. Light supplies of Yellow bell pepper are also crossing through McAllen, Texas.

Blackberries are in slightly better numbers as these plants resist the rains better than their cousins the raspberries. They are still trending up slightly cost-wise. The quality is generally good but some lots are still showing some early breakdown and red cell defects. Look for the market to remain steady to slightly higher through this week and then possibly edge off next week a bit like the post-Valentines day demand wanes.

Blueberry availability is tightening up quickly as Mexican production is on the downturn and many shippers are done in Peru. Chilean product is coming in sporadically for this week and causing some shortages for retail ads. Demand is strong for these lighter numbers and markets are reacting. Look for this commodity to keep firm with some higher pricing through the end of this week.

Alerts:
Look for higher pricing and lighter availability on this item

Raspberries are in increasingly short supplies out of Mexico with heavy rains affecting yields. Quality will remain just fair and we expect to see some water-related issues. The market is higher and will continue to edge up through the end of this week. Look for this light trend to remain at least through next week.

Alerts:
The same rains affecting the Mexican strawberries are reducing yields on this item as well.

Strawberries continue to be in short supply on the West Coast and out of Mexico. Mother Nature has dealt Central Mexico and Baja some substantial rains recently which are hampering harvesters and lowering yields out of those regions. Southern California is slowly beginning to increase yields as the area pulls out of some near freezing mornings and low50s to 60s daytime temperatures. Quality has been good out of California. Mexican products may display some water-related issues over the next few days. Florida is finally enjoying some ideal weather which will bring on crops fairly quickly. Look for the overall market to develop into a lower overall two-tiered market next week as we push past Valentine's Day demand.

Alerts:
Rains in Central Mexico and Baja have caused temporary shortages out of those areas.

The Broccoli market continues to stay steady with the help of better yields and more supply in the pipeline. Quality continues to have slight purpling caused by the recent cold weather, some mechanical damage, and occasional yellow cast. Look for Broccoli to stay steady going into next week with the warmer weather this week in Yuma.

The brussels sprouts market has recently come off as more supply is in the pipeline. Currently, quality is good with occasional internal decay. Look for the Brussels sprouts market to continue to stay steady going into next week.

Carrots are cruising right along with good quality and decent yields and the market is flat but steady. Quality has been good. Mexican jumbo carrots are very similar with a steady market and good volume to move. Quality has been very good on the Mexican jumbos and looks to remain so for the next few weeks.

The cauliflower market has started to pick back up. Yields have decreased with the cold and wet weather in Yuma. The quality is fair with slight bruising and yellow cast with weights in the 25 to 28-pound level. We are hoping warmer weather this weekend in Yuma will start to help supplies this week. Look for the market to keep adjusting going into next week with the warmer weather.

Jalapeno- Moderate supplies of Jalapeno continue to cross through Nogales, AZ this week. Moderate supplies are expected through the remainder of the week. Jalapeno quality from Mexico is mostly fair. The Jalapeno market has increased this week due to lower/moderate supplies. Jalapenos from Mexico are also available to load in McAllen, Texas.

Pasilla- Moderate supplies of Pasilla continue to cross through Nogales, AZ. Moderate supplies are expected to continue throughout the week. Pasilla quality from Mexico crossing through Nogales is mostly fair to good. The Pasilla market remains steady this week. Pasilla from Mexico is also available to load in McAllen, Texas.

Anaheim- Moderate supplies of Anaheim crossing through Nogales this week. Quality on Anaheim crossing through Nogales is good. Size on the pepper is mostly medium to large. The Anaheim market is steady. Anaheim from Mexico also available to load in McAllen, Texas.

Serrano – Lighter supplies of Serrano peppers available to load in Nogales from Mexico. Serrano supplies are expected to continue light through the week. Moderate serrano supplies are also crossing through McAllen, Texas.

Tomatillo – Very light supplies on husk tomatillo this week. Peeled tomatillo is non-existent this week. Quality on husk is mostly fair due to dry brown husk. New crop tomatillo is expected to start as soon as next week. The market on both varieties are high this week.

The cilantro market continues to be leveled off as there are plenty of supplies with the warmer weather in Yuma, Mexico, and Southern California. The cilantro quality is good with an occasional yellow leaf. Look for the cilantro market to adjust going into next week with the warmer weather we are having this week.

District 1 (Central Valley) fruit is also looking really nice on supplies and quality. This is a perfect time to quote any promotional lids. Supplies are looking steady across the board, while the small sizes are starting to get snug on 200/230’s. District 2 (Coastal Region) is just starting up with light supplies to start. District 3 (CA Desert/AZ Desert Region) is done but there is fruit still lingering around, suppliers are trying to clean it up with deals out there. Be mindful it could be storage crop so shelf life might not be as strong. We continue to have optimal growing weather and the fruit will continue to be exceptional as long as we have this weather. Please reach out for any advance pricing.

Lime supplies are looking good this week with ample crossings. Current markets continue to remain soft and overall the quality has been solid. We have opportunities to load FOB Texas and California as well as delivered options. Please reach out if you have any interest.

Navel supplies on the 138’s continue to be tight industry-wide, but a few suppliers have hit a couple of blocks that brought on some 113’s again this week. Please continue to place orders for small sizes in advance to allow suppliers to strategize inventories for coverage. Suppliers continue to peak on 88’s and larger as an option for better coverage and deals. Current markets are steady on the large sizes and the small size market is staying firm. Fruit quality is looking very good with natural color, high quality, and great tasting Navels. Brix levels have been consistent between 12-14%. On Specialty citrus, keep pushing Mandarins, Cara’s, Bloods, and Minneola’s we’re in peak season and have plenty of lids to promote. We have Grapefruit opportunities out of Texas and California, please reach out if you have any interest.

Alerts:
138's remain very limited, keep putting orders in advance for better coverage.

Honduras cucumbers are in peak season and supplies should continue to be good through the week. Pricing has been very steady sparked by good demand mainly due to lack of Mexican supply. Mexico has had its share of rough weather in the past week slowing production and increasing demand for Honduras product. Quality from Honduras has been very good the last 2 weeks and with the weather forecast this week we do not expect that to change.

Peak Seasons:
Honduras cucumbers are in peak season.

Light supplies of cucumber crossing through Nogales, AZ this week. With the cool weather that passed through both growing districts in Sinaloa and Sonora over the past couple of weeks. The cucumber supplies have decreased. Growers from both districts continue to access potential damage to their crops. The cucumber market has increased due to lighter supplies. Cucumber quality currently varies from fair to good. Light supplies of cucumber are also crossing through McAllen. Quality crossing through McAllen is mostly fair as well.

Eggplant supplies are limited. Growers in Florida traditionally do not plant many eggplants for this time period because demand is down and competition from Mexico has made it unprofitable. Demand has been weak and pricing has been steady because of light supplies. Quality is good with most shippers. There have been some issues from scaring due to high winds in south Florida over the past 10 days. Expect supplies to continue on the light side through most of February. Growers are still harvesting their winter plantings and new planting will not start until late February.

Eggplant supplies continue to be steady this week. Eggplant crossing through Nogales, AZ continues to be harvested in Sinaloa. Supplies from Sinaloa continue to be packed in all pack styles and in all sizes. Quality on eggplant crossing through Nogales varies from fair to good. The eggplant market has started to increase due to ranges on quality.

Green grapes continue to be inconsistent supplies on both coasts. Quality is being reported as very strong and market prices have started to decline slowly. We are currently in the middle of peak production and expect supplies to last another 3-4 weeks. However, as we look out further toward transition, we expect to see some supply shortages. Chilean production is being affected by drought and shippers expect 25% less fruit at the end of the season. Additionally, Mexican growing regions are experiencing freezing weather that could push harvest back and impact yields. It is too early to evaluate the extent of the shortage, but we will be monitoring the situation closely and will continue to update as we move forward.

Alerts:
Good supplies now, but shortages are expected in 3-4 weeks.

Transitions:
Mexico usually starts by late March, but freezing temps may impact start dates and yields.

Peak Seasons:
We are currently in the middle of peak Chilean production.

Red grape supplies have improved this week with a good amount of Chilean containers expected to arrive over the next 2 weeks. We are currently in peak production with Chile. Quality is being reported as very strong and market prices have started to decline on both coasts. However, we expect supplies to start to taper off quickly by the end of the month. There has been a drought in the Chilean growing regions and shippers are now becoming concerned about a possible shortage on production. As the season progresses, it is becoming evident that yields are not as strong as expected. According to Chilean growers, they expect a 25% decrease in production as they estimate the back half of their harvest schedules. This could result in a supply gap between Chile and Mexico. Currently, the Mexican growing regions have experienced some heavy ice that could push harvest back and decrease production (see pictures attached). It is still too early to tell the extent of the shortage, but we will continue to monitor and update as we move forward.

Alerts:
Chilean supplies are improving and prices are decreasing. However, we expect things to change quickly 3-4 weeks from now. We may experience a possible shortage as we look toward Mexico transition.

Transitions:
Mexico usually starts late March, but cold weather could have an impact on start dates and yields.

Peak Seasons:
We are currently in the peak of import production. We expect it to last another 3-4 weeks.

The green onion market continues to come off with better supplies brought on by the warmer weather we've had in Mexico. Quality is good with occasional leaf minor caused by the recent colder weather. The market will continue to stay steady going into next week.

The kale market continues to stay steady. Quality has started to improve with full bunches and some yellow leaves being reported. We're hoping this week's warmer weather going into the weekend will continue to help the quality, supplies, and spur growth.

The weather has changed dramatically in the Yuma region. Rain fell this past Monday and this caused production to be limited with most shippers. The rain was expected to hold out till Wednesday of this week, however, this did not happen. Cool temperatures are expected in the desert. So in essence, lettuce supplies will not be as abundant as in past weeks. This market will get active and delays in loading trucks are inevitable. Santa Maria will be very limited in production all this week. Common defects being reported to include misshapen heads, growth crack, mildew and mechanical coming out of the desert region. Weights are varying from 35-45 pounds. There is a wide range in weights throughout the desert.

Alerts:
Rain and cold temperatures will hit the Yuma region all this week. Production will be limited.

The rain at the beginning of this week coupled with cold temperatures for the entire week in Yuma will inevitably affect production of romaine as well as all leaf items. Multiple shippers stopped harvesting at the beginning of the week due to the rains. More rain is expected this Wednesday. Some suppliers have already reacted to the market while others have remained steady. The overall availability is moderate with demand very sporadic throughout the marketplace. Production in southern California will be moderate at best. Some common issues being reported upon arrivals to include mechanical, blister and mildew. These defects are showing up on romaine as well as the other leaf items. The weights are averaging on romaine 32-36 pounds while green and red leaf has been 17 -22 pounds.

Alerts:
Rain and cold weather has hit the desert region, affecting quality and production.

The Tender Leaf supplies continue to stay steady this week. We have experienced some cold weather recently and anticipate warmer weather in the next couple of days to help supplies, quality, and growth. Quality is good with occasional yellowing and bruising of the tender leaves.

We are seeing good offshore arrivals into the US from Honduras, Costa Rica, and Guatemala. Demand is steady this week and the market is slightly lower. There is plenty of opportunity buys on the east coast on all sizes.
As for the west coast, small fruit (12's & 15's) remains limited this week. Mostly 9's and jumbo 9's on the west and with a slightly stronger market. Overall quality has been consistent with great shelf life.

The honeydew market is slightly lower this week and demand are steady. Good arrivals of offshore fruit hitting the US as we are seeing better availability in the pipeline. Plenty of opportunity buys available this week. Overall quality has been consistent with excellent shelf life.

Watermelon supplies crossing through Nogales, AZ continue to be harvested in Nayarit, MX. Watermelon supplies from Nayarit are expected to decrease due to rain in the growing area. Light supplies on both bins and cartons are being packed due to demand. Supplies are expected to increase as we go into next week with better temperatures expected. Quality from this district is currently fair. The watermelon market is currently higher in all sizes.

Onion markets are lower this week as supply exceeds demand. Yellow onion markets took a slight dip along with whites. Red onions remain low with good supplies. Northwest suppliers have switched over to cold storage and will see improving quality. Some lots will continue to show occasional translucency and pressure bruise. It is recommended to store onions in a cool, dry and well-ventilated area with temps ranging from 36-40 degrees. Mexico is now crossing all three colors in limited volumes. Utah and Colorado also continue to produce all three colors.

Alerts:
Optimal storage for onions is cool, dry, well ventilated area with temps from 36-40 degrees.

Transitions:
Mexico is crossing all three colors into South Texas

Washington:
Most shippers are done with Bartletts, so be mindful of quality with shippers attempting to clean up inventory. Availability on 120-150ct Anjou WAFCY is slim due to a combination of good movement and a lack of low-grade fruit during packing. Needless to say, prices are slowly climbing on foodservice sizes. Bosc remains plentiful but command slightly higher prices.

Red Anjous are available and are packed in ½ (20#) and full cartons (40#). Markets are steady and quality is excellent.

Pineapple demand was strong for Valentine's pull, now that most customers have pulled what they needed we can expect normal demand. Production out of the growing regions is slightly improving with most suppliers thinking they will be in better shape by week 8 & 9. Overall, markets remain steady and quality continues to be consistent and looking good!

Russet potato markets remain elevated on 40 count through 70 count as well as 10oz #2 grade. Burbank supplies are limited this week as suppliers focus on Norkotah cellars. Cold temperatures in Idaho continue to shorten packing schedules with limited run times at packing sheds. Quality is good with some lots of exhibiting peepers, light mold, and pressure bruise. Washington, Colorado, and Wisconsin continue to produce supplies of Norkotah potatoes with elevated markets as well. We continue to recommend 7 business day lead time on all russet potato orders for full coverage and on-time deliveries.

Alerts:
Markets remain elevated. Some lots will exhibit peepers and light mold.

Color potato markets are showing increased markets on red and white while yellow remains relatively steady. Wisconsin has finished up for the season with demand shifting into the Northwest as well as new crop out of Florida. North Dakota continues to produce supplies of red and yellow and expected to get through March as long as demand remains slow. Size B red and #2 grade are limited in supply while the white potatoes out of California are becoming tight. Mt Vernon Washington continues to produce excellent quality reds. Florida's new crop is exhibiting very good quality with some skinning on the reds. Overall markets are expected to continue climbing; in particular on reds.

Alerts:
Markets higher on red and white potatoes. Supplies limited on B size and #2 grade reds.

Transitions:
Southern Florida has started on red and yellow. Markets elevated.

Squash supplies are getting better on zucchini, but still very light on yellow straight-neck. Squash production has bounced back with the great weather in South Florida this week. Zucchini supplies have gotten very good. Yellow is still very light in supply but expect that to change as the week goes on. Yellow squash is much more tender than zucchini and with the excessive wind in south Florida plants stopped producing and a lot of the fruit that was produced was unpack-able due to heavy scaring. It takes a little longer for the yellow squash plant to bounce back and put on new fruit but with the calm weather and warm temperatures it should not take long. Pricing has been escalated on both colors but we are already seeing some market adjustments on zucchini and yellow straight-neck is staying steady.

SQUASH
Supplies on both Italian and yellow s/n remain light this week and are expected to continue light through the week. Cool weather over the past weeks in the 40’s along with rain in Culiacan, Sinaloa and Guaymas, Sonora has slowed down production from both districts. Growers from these districts are still accessing the damage on soft squash. Quality on Italian squash ranges from fair to good depending on districts. Quality on Yellow S/N continues fair as crop continues to be harvested in Sinaloa. Market on both Italian and yellow squash remain steady/high this week.

Not much change this week on stone fruit. Availability is dependent on container arrivals and inspection. Peaches and nectarines are in decent shape, but plums have been short this week as we wait for the next arrival. We expect better supplies by the weekend. Sizes are still on the larger side. Quality has been excellent with strong fruit and good shelf life. Markets up to this point have been firm, but we saw some decreases this week and expect more aggressive promotional opportunities as we look toward peak production later in the month.

Alerts:
Availability is dependent on container arrivals. This week, plums have been limited. We expect better supplies by the weekend.

Peak Seasons:
We will hopefully see peak production numbers over the next 2-3 weeks.

Tomato supplies are showing improvement this month, but the market remains short following poor weather events. Florida yields are near 50% from this time last year. Intermittent cold-weather systems and sporadic rains have greatly reduced the volume coming out of Florida, however, a warming trend is forecasted to turn things around as soon as tomorrow with temperatures in the high 80’s. More growers have begun harvesting showing promise for the market during this time when western supply has suddenly been greatly reduced. Florida growers are adjusting pricing to meet national demand with western buyers once again looking east for relief. Round tomato sizing has improved as a result of old fields finishing, but supply is still lighter than normal. Roma tomatoes are good, but supply is limited according to the amount of acreage devoted to the crop this time of year. Grape tomatoes remain above the $20 mark with the expectation for better availability by the end of next week following the sunshine that is expected over the next several days. Similarly, Cherry tomatoes should improve but the market is short against demand. Expect improved supply by the end of the month, however, markets will adjust against the severity of Mexico’s shortage of imports.

In the early hours of Thursday morning last week, the state of Sinaloa experienced the coldest weather of the season thus far with temperatures dipping into the 30’s in the growing region of Culiacan. Again, this week, another storm has brought days of rain and unseasonably low temps in the 40’s. Although temperatures are not at the freezing point, they are greatly reducing the maturation of fruit. As a result, color is typically lighter, and size is compromised. Rain has caused harvest gaps while farms wait for fields to dry out. Quality and yields have been adversely affected with crops exposed to further disease pressure. As a result, western supply is very light. Field tomato quality has been greatly reduced. Demand for Roma tomatoes is extremely strong, and shippers have sold out consecutive days in Nogales. Grape tomato FOB’s have doubled in price since this time last week. Cherry tomato availability is critical. Looking long term, there is uncertainty where the market will settle. Spring crops in Sonora faced multiple nights of freezing temperatures following the same storm patterns mentioned previously and may delay the start of new programs set to begin in March. Availability is expected to improve in the next 7 to 10 days but it may be weeks before markets return to minimums. Potential delays occurring from the newly appointed Suspension Agreement’s inspection provisions set to be enforced at 100% by April 1, in conjunction with the USDA’s phytosanitary controls to prevent the spread of the Tomato Brown Rugose Fruit Virus, this may affect markets for some time to come. Traditional market indicators must now consider these trade agreements and preventative measures against a disease that may cause an influx in the market for months ahead or more.

Alerts:
Adverse weather has greatly reduced harvest schedules and crossings. Product is very limited this week. Elevated market expected through February