The Source - February 19, 2020

MIDWESTERN / EASTERN REGION:
As smaller, regional shippers close their doors for the season, we are seeing a light shift in demand to the larger shippers and to the Northwest. The remaining shippers will have fruit into the summer months (June/July). Markets remain stable and availability, on most varieties, remains steady (for most, Honeycrisps are done in MI). Quality remains strong with strong shelf-life.
Winter storm systems continue to delay load deliveries in the majority of southeastern states. Please account for possible delays when placing orders.
WESTERN REGION:
Washington
It seems that President’s Day brought a lull in the market where movement lessened and shippers are reacting with aggressive prices on some small-sized, red varietals (Red Del., Fuji, Jonagold, and Braeburn). 125ct-138ct Fuji and Red Dels USX/WAFCY remain the bargain buys, even though some shippers are trying to firm up their floor prices in the low teens. Gala prices remain steady while smaller Grannies have firmed up due to the lack of foodservice sizes and low grades.

ASK YOUR PRO*ACT SOURCING SPECIALIST ABOUT LOADING OPPORTUNITIES ON PROCESSED APPLES (SLICED, DICED, ETC.).

The weather has improved in both regions in Mexico (San Luis/Caborca), production has increased, and will continue to increase. This trend should continue through the middle of March. The market is less active this week with the increased production from both regions.

Although California is anticipating heavy yields this season, growers are trying to hold off on the harvest as much as they can. The reason being, they are trying to offset the size curve and also be in step with what the Mexican market is doing. Size curve is leaning to 60’s and smaller as they are dominating the pack out. Expect 48’s and larger to hold at a premium for the season. California crop is typically heavy on #1 grade fruit due to the fact that fruit sits on the trees for a window of 6-7 months. That being said, the fruit is less exposed to mother nature whereas Mexican fruit is exposed year-round and tends to be heavy on #2 grade fruit.

The avocado market continues to climb and supplies are expected to become extremely limited as we look forward. Crossings from Mexico are extremely light and we will inevitably feel the supply chain tighten up. Extreme market conditions continue and will be a challenge moving forward. Unfortunately, there is not enough fruit in the pipeline to fill demand and we expect the current situation will only get worse before seeing any relief. The industry as a whole is in a “Demand Exceeds Supply” situation. With inventories depleted, suppliers are calling “Sold Out” and not taking on any new business. Sizes 48 and larger are almost nonexistent. The reason being, the current size curve is leaning towards 60’s and 70’s. Eventually, those sizes will tighten up as the industry adjusts to the size curve. Mexican growers are slowing production in an effort to stretch the existing crop and prevent a potential gap in Q3 (July-September).

Alerts:
With US inventories depleted and supplies diminishing rapidly, the industry remains in a "Demand Exceeds Supply" situation.

Bell Pepper supplies on the east coast are very good. Growers in South Florida on both east and west coast continue to start new plantings. Weather overall has been good in Florida, average temperatures have been above average and spring bell pepper plantings are about a week earlier than normal. Quality is very good on new plantings, there are split levels on quality due to growers harvesting older and newer plantings in order to get a range in sizing for various types of business. Demand is weak on bell pepper and shippers are making deals to keep inventory fresh. Expect these trends to continue through the weekend and early next week.

Green Bell Pepper- Good supplies of Green bell pepper are crossing through Nogales this week from Sinaloa and Sonora. All pack styles on green bell pepper are being packed this week. Quality from both growing regions is currently good. The market on the green bell pepper is currently low this week due to increased supplies. Green bell pepper supplies exceed demand this week.

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 increase lightly as Mexican growers start transition into new crops. 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 stabilized with increasing volume. Light supplies of Red bell pepper are also available to load in McAllen, TX.

Yellow Bell Pepper- Moderate supplies of yellow bell pepper are currently being harvested from Mexico this week. The market on yellow bell pepper remains steady/high. Quality on yellow bell pepper crossing through Nogales is fair to good. Light supplies of yellow bell pepper are also crossing through McAllen, Texas.

Blackberries are in moderate supplies coming out of Mexico and some shortages at shipping locations are expected. Quality has been just fair with some red cell and water-related issues still being reported. Look for this market to remain firm through the end of next week with slightly higher undertones.

Alerts:
All mixed berries will continue to be in light supplies through next week

Blueberries are in very short supply coming out of Mexico as they transition growing areas there. Offshore fruit is arriving sporadically from Chile and Peru and causing some shortages at the distribution areas due to overall numbers being down from all areas. Look for this market to remain firm and at higher price levels for the next few weeks.

Alerts:
All mixed berries will continue to be in light supplies through the end of this week.

Raspberries are in light supply with much of the Mexican transfer volume on the decline. Quality has been fair with some lots showing some defects related to rain. Look for this market to remain firm with higher pricing moving into next week

Alerts:
All mixed berries will continue to be in light supplies through next week

Strawberries are experiencing a slight increase in production in the Oxnard and Santa Maria CA areas as we also see a decline in demand. Last week we moved past brisk demand for Valentine's day holiday. Look for the market out west to ease off toward the end of this week. Quality has been excellent due to the optimum growing conditions in the coastal regions. There are still cooler than normal nighttime temperatures which are holding numbers down somewhat but these numbers will gradually increase into next week. Mexican production is fairly steady and we should see some increased numbers there as well. Florida is also producing better volume this week than the last and we expect to see a two-tiered market evolve as shippers on the West coast attempt to hold pricing up and demand a premium for the California fruit.

Alerts:
Increased production should result in lower market pricing across the board in all 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 continues to be aggressive 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.

Our on-site Source Live team was on hand to witness the harvesting of the last lots of carrots to be produced out of the Bakersfield, California area marking the beginning of the new crop Coachella Valley product. Quality is looking good moving into these new fields and the market should remain steady through the front end of this transition. Mexican production is still plugging away and both areas are enjoying additional business with the ending of the North East storage crop supply.

Transitions:
The last of the Bakersfield product is being processed this week and Coachella production begins next week.

The cauliflower market continues to be strong. 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 the warmer weather the next few days in Yuma will start to help supplies this week. Look for the market to adjust going into next week with the warmer weather.

This commodity remains very steady in the marketplace with most shippers. Flexing continues on volume type orders so promote as much as possible. Availability on all sizing is not an issue. The quality will be strong. Aside from some slight mechanical and insect damage, all reports continue to show strong quality traits with this commodity. Mexico will continue to have production throughout the week. Weights will average 54-58 pounds in all the growing regions.

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 through 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 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 is 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.

Lemon supplies out of the Central Valley are 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. The Coastal Region is starting up with light supplies to start and gradually increasing weekly. Out of the CA Desert/AZ Desert Region supplies are almost done but there is fruit still lingering around with 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 consistent 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.

Large size navels (88’s and larger) continue to be in really good shape on supplies. Small sizes continue to be a challenge and remain snug. Please continue to place orders for small sizes in advance to allow suppliers to strategize inventories for coverage. 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 the remainder into February and going into March. Please keep in mind we have Grapefruit opportunities out of Texas and California, please reach out if you have any interest.

Cucumber supplies are steady from Honduras. Most growers are packing heavy to select cucumbers creating a widespread in pricing between super selects and supers. Weather in Honduras has been hot, windy with some rain, which is the reason why growers are packing a higher percentage of selects. Quality has been relatively good for the last few weeks, but this week some issues with shelf life are starting to arise. With the hot weather and some rain plus the extra transit time from Honduras, it is not uncommon for product to have the occasional bad cucumber or a decay spot in the box. Expect pricing to stay steady throughout the week. Mexico is shipping light supplies to the U.S. and demand for Honduran product has been good.

Light supplies of cucumber continue to cross through Nogales, AZ. Supplies from both the Sinaloa and Sonora districts are expected to remain light for the next 14 days. Mostly Selects, Plains, 36ct, and 24ct cucumbers are being packed this week. The cucumber market is expected to remain steady throughout the week. Quality on cucumbers from both districts and on all pack styles are mostly fair to good. Cucumber demand currently exceeds supplies.

Eggplant supplies are light and pricing is slightly higher. Growers on both the east and west coast of Florida are shipping eggplant in light supplies which is traditional for this time of year. With the high winds and cooler temperature during the winter months, it is risky for growers to take a chance on large acreage so they tend to plant a few small plantings throughout the winter. Quality has been fair in the region, with the high winds in south Florida there has been some scaring issues. Expect supplies to be light and pricing steady through the weekend and into next week. New plantings of eggplant will not start for at least 2 weeks.

Eggplant continues 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.

Like red grapes, the green varieties have improved with the recent arrivals from Chile and Peru. We have good supplies of all sizes on both coasts. Market prices have remained fairly steady on the green grapes. Quality is excellent. We expect promotional volumes for the next 2-3 weeks, then gradually taper off mid-March. The situation may improve as we get closer, but for now, shippers are warning of decreased supplies earlier than usual. As we look further down the road, we may experience some gaps between Chile and Mexico due to cold weather in Mexico recently. We will continue to monitor the weather and supply situation and update as we move forward.

Alerts:
Good supplies for the next 2-3 weeks then arrivals will slow down.

Transitions:
We may experience some challenges in late March to early April as we look toward transitioning into Mexican fruit.

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

As we touched on in last week's updates, we are seeing better availability of red grapes this week from Chile. We have had several containers arrive with good quality red seedless varieties. Sizes mostly fall between a medium to a large. Peru continues to send fruit as well and is bridging the gap on larger size grapes. Markets have declined gradually over the last 10 days as more fruit arrives. Good availability on both coasts is expected to last another couple weeks then taper off as we get into mid-March. Again, this may change as we get closer and supplies may improve. However, to lean on the side of caution, we anticipate seeing supplies become lighter earlier than normal. Mexico's crops experienced some freeze last week and this may push harvest to start dates off by a couple of weeks, but we will have to monitor that situation as we get closer. For the next 2 weeks, we can focus on spot buy opportunities and good supplies.

Alerts:
Spot buy opportunities and good volumes are expected for the next 2-3 weeks.

Transitions:
We may see some challenges toward the end of March if the weather stays cool in Mexico.

Peak Seasons:
We are currently in the peak production period for Chilean harvest

The green onion market continues to stay steady with good 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.

Supplies are good or bad depending on which shipper you talk to. Some growers are still having hangover issues with the rain and cool weather in past weeks so for some, production is limited. Santa Maria production and Oxnard has picked up compared to past weeks production numbers. The overall quality is fair with issues of mildew, misshapen heads, puffiness and mechanical. The weights on liner product have been better averaging 40-44 pounds. There continue to ranges in terms of quality and availability throughout the industry.

Demand continues to be flat on romaine as well as all leaf items. In previous weeks rain and cool weather slowed production, yet demand was easily met. Supplies will exceed demand and expect shippers to be flexing on all leaf items. Demand is moderate to light, industry-wide. Defects being reported upon arrivals include fringe burn, wind damage, blister and mechanical. These defects are showing up on romaine as well as the other leaf items. The weights are averaging on romaine 32-37 pounds while green and red leaf has been 19 -22 pounds.

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.

Not much change on the melon front. We are seeing solid arrivals of offshore fruit with a steady market. We are seeing plenty of opportunity buys on large fruit this week for both east and west coast. Smaller fruit (15s) are available but with light offerings. Guatemala, Costa Rica, and Honduras have all been very consistent as far as quality. Year after year offshore arrivals into the US are up 36%.

Not much change on the honeydew front this week. Good run on all sizes for the east with plenty of opportunity buys available. As for the west, small fruit is available but in light numbers. Larger fruit is where deals are to be had. Quality has been consistent from all growing regions.

Watermelon supplies crossing through Nogales, AZ continue to be harvested in Nayarit, MX. Watermelon supplies from Nayarit are steady. Moderate supplies on both bins and cartons are being packed due to demand. Quality from this district is currently fair. The watermelon market is currently higher in all sizes.

Onion markets are lower as supplies are plentiful in the Northwest. Crossings from Mexico into South Texas are also adding pressure to the Northwest demand keeping markets low. Expect to see pricing stabilize at low levels on yellow and red with opportunity buys available. White onion markets will start to show increases in the coming weeks as some suppliers finish for the season in Washington, Oregon, and Idaho. Northwest storage supplies are expected to finish up in the next 6-8 weeks giving way to the California desert and domestic Texas crops. Utah and Colorado continue to produce all three colors as well.

Alerts:
Markets lower. White onions winding down in Northwest.

Transitions:
Mexico crossings into South Texas available.

Washington:
Availability on 120-150ct Anjou WAFCY remains limited; shippers are coming up with larger sizes and higher grades. Overall, prices have reacted, but remain steady. Bosc pears remain plentiful but command slightly higher prices.
Red Anjous have maintained good availability on ½ carton and full case packs. Quality is excellent.

Pineapple supplies are improving out of both coasts. Demand seems steady, keep the orders coming. We’ll make sure to get you covered. Markets remain steady and quality continues to be consistent and looking good!

Russet potato markets remain elevated on larger size 40 count through 70 count and 10oz #2 grade. Smaller size 80 count through 120 count are readily available with lower markets. As suppliers wind down on Norkotah storage supplies, larger size potatoes will become more scarce due to the smaller size profile that remains on Burbanks. Expect markets to begin climbing on the larger sizes in the coming weeks and for the remainder of the storage season. Quality is good with some lots showing occasional peepers, light mold, and soft rot. Many Idaho suppliers are looking towards Washington for larger size potatoes to fill the void which is affecting those markets as well. Along with Washington, Colorado and Wisconsin continue to produce Norkotahs with increasing demand.

Alerts:
Light supplies of larger sizes; in particular 40 count and 50 count.

Color potato markets remain elevated; in particular on B size and #2 grade reds. Yellow and white markets are also rising slowly as supplies wind down in the Northwest and demand increases. North Dakota is producing a limited volume of reds and yellows and expected to finish for the season in the next 4-6 weeks. Mt Vernon, Washington continues to produce red and yellow along with supplying California to supplement mixer orders out of Bakersfield. Florida's new crop is producing great quality but markets are high with increasing demand. Expect markets to continue to rise as we move into March.

Alerts:
Markets remain high; in particular B size and #2 grade reds.

Squash supplies are good at the moment but expect supplies to tighten as the week goes on. Squash supplies and pricing have been like a roller coaster all winter. Over the last two weeks, growers experienced a "flush" on zucchini while supplies of yellow squash have stayed fairly tight. Reports this week are showing less production from squash fields which indicates zucchini supplies will get much tighter and yellow will continue with light supplies. With high winds in south Florida there have been some scarring issues on yellow squash but for the most part, quality has been good. Keep a close eye on squash, most shippers expect a big increase in price by the weekend and depending on Mexican supplies this could be a situation that lasts for a couple of weeks.

Alerts:
Reports indicate light supplies coming this weekend.

Good supplies of Italian squash crossing through Nogales this week. The Italian squash market has decreased due to better supplies this week and is remaining steady. All pack styles are currently being packed with mostly fair to good quality. Italian squash is being harvested from both the Sinaloa and Sonoran growing district. Supplies on Yellow S/N remain light this week. The Yellow S/N market continues steady/high due to light supplies. Quality on yellow squash is fair at best. Supplies on both Italian and Yellow S/N are expected to remain similar for the next two weeks.

We have better availability this week on all stone fruit varieties. Several containers arrived over the weekend and supplies of all peaches, nectarines and plums have improved on the west coast. Import fruit is always heavy on larger sizes and this year is no different. As we look toward peak production cycles over the next 2-4 weeks, we expect to see a lot of tray pack (40-50 series) with limited Volume Fill (50-60 series) become available. Quality is being reported as very strong and market prices have been steady.

Peak Seasons:
We are approaching peak production over the next 3-4 weeks.

Tomato supplies should be showing improvement this month, but the market remains short following poor weather events. Florida yields are near 50% from this time last year. Despite the current warming trend and decent yields, demand far exceeds supply as Mexico struggles with volume. In addition, growers are mostly into crown picking across Florida, leading to strong markets on the smaller sized fruit. Florida growers are adjusting pricing to meet national demand with western buyers once again looking east for relief, leading to strong markets. Roma tomatoes are good quality, but supply is extremely limited according to the amount of acreage devoted to the crop this time of year and the pressure of western demand. Grape tomatoes remain above the $20 mark with the expectation that this market will remain very active in the next couple of weeks. Similarly, Cherry tomatoes are 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.

Alerts:
Supply short. Market elevated. Supply Critical.

A week or so ago, Sinaloa experienced the coldest weather of the season thus far with temperatures dipping into the 30’s in the growing region of Culiacan. This was followed by another storm that brought days of rain and unseasonably low temps in the 40’s. Although temperatures were not at the freezing point, they greatly reduced 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 and 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 remain active and 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 not expected to improve until late March. 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, may affect markets for some time to come. Traditional market indicators must now consider these trade agreements and preventative measures against disease that may cause an influx in the market for months ahead or more.

Alerts:
Supply short. Market elevated. Supply critical.