The Source - February 20, 2019

Washington
Demand is moderate with steady pricing across all varieties with the smaller foodservice sizing getting premium. Good supplies of 48-64 are available in the Red varieties. Granny Smiths and Golds are still leading the pack with the strongest pricing on the smaller sizing. Pricing feels like we could have finally hit the top. Or is this the calm before the storm when the weather warms up in the coming months. Only time will tell. Gala demand continues strong across all sizes. Quality overall is still being reported as good upon arrivals.
Michigan, New York, and Pennsylvania
Demand is light to moderate across all red varieties out of these areas with good supplies of smaller foodservice sizing. Deals are available. Quality is still being reported as good with few issues upon arrivals being reported.

Alerts:
Foodservice sizes of Granny Smith and Gold delicious are in very few hands

Peak Seasons:
Red Variety's are in Peaks season across all the shipping points.

Not much change from last week, the weather in Caborca remains cold and yields are still lower than normal due to the cold weather. We are expecting better weather conditions going into next week which in turn should help fields yield better volume. We are expecting to start peak of season production late next week. Markets remain steady with lower demand as markets continue to come off.

Harvest from Mexico remains steady and the demand is keeping pace. Field prices have strengthened triggering a strong demand for 48s and smaller, which remain very tight based on the size curve. The expectation is for stable harvest for the balance of the month while demand steadily increases. Mexico is currently harvesting the "Aventajada" crop and will run into June. Come July, the harvest of the "Flora Loca" Variety will start up.

Supply of green bell pepper in the east has gotten much better over the past two weeks. A long stretch of good weather in south Florida with increased supply crossing the border from Mexico has caused lower prices for the first time in months. Expect supplies to be steady for the next few weeks, more shippers will start harvesting in two weeks. Demand has been slow for most of February but typically that changes the first week of March when the temperatures begin to rise. Quality, for the most part, has been good, there has been some wind scaring and pitting due to a hand full of cold windy mornings.

Peak Seasons:
Bell Pepper is in peak availability.

Green Bell Pepper- Good volume on green bell pepper continues to arrive in Nogales. Consistent volume is being harvested, mostly from the Sinaloa growing region. There is also pepper available from Southern Sonora. Quality on green bells from both regions is good. Mostly medium size being seen due to cooler weather. Supplies currently exceed demand on all sizes of green bells. Market on Green bells has stabilized after adjusting down on both #1 and choice grade pack. Green bell pepper from Mexico is also available to load in McAllen, TX.

Red Bell Pepper- Moderate to light volume of Red Bell pepper available to load in Nogales, AZ from Mexico. The price on the red bell peppers has also stabilized after increasing this week. Light volume available to load on both Elongated and Hot House bells in all pack styles. Lower numbers on both varieties of red bells will continue through the week. Quality of red bells on both varieties continues to be good. Red bell supplies from Mexico are currently crossing through Nogales, AZ and McAllen, TX.

Yellow Bell Pepper- Light volume of Yellow Bell pepper is crossing through Nogales this week. Growers transitioning from older fields has slowed down production. Both elongated and Hot House varieties being packed in light volume on 11lb/15lb and 1 1/9 bushel carton. Quality on both varieties is good. Demand exceeds supply. Market on yellow bell has increased this week. Yellow Hot House bells are also available to load in McAllen, TX.

Blackberries are still coming from Mexico in steady supplies. There was a slight market uptick last week as some shippers reported loads being turned back into Mexico due to water damage fruit. As reported last week recent rains in Mexico have caused some loss of harvest but much of the crop is under hoops and we are not seeing any major overall shortages. The market should continue to stay firm with no real excess of open market fruit available.

Blueberries continue to be shipped into the U.S through Texas from Mexico as well as ocean freighted in from Chile. Supplies are adequate and the market is fairly steady. Quality has been good out of both countries although the Mexican fruit is commanding a slight premium due to the shorter transit time and increased shelf life the product has. There are some indications that the export container numbers out of Chile may decrease in the near future causing a slight increase in price next week.

Raspberries will remain in steady supplies out of Mexico with little to no fluctuation in pricing moving through the week. Quality has been good overall and demand is steady. The product is being shipped primarily out of Mexico into McAllen Texas and distributed to Oxnard and Santa Maria CA, Yuma AZ, and Dover Florida to accompany the other mixed berries and strawberries.

The Strawberry market is a real mixed bag at this point. California is drying out from recent rains but near freezing temperatures have continued to hamper plant growth. Expect light supplies out of the Oxnard and Santa Maria locations for another week at least. Quality is improving but there will be the occasional white shoulder and some cases of water-related issues with some of the fruit.
Mexico is still producing enough fruit to help cover any shortages occurring in California for the time being. Quality has been good but most growers are looking at peak production and quality to gradually diminish over the next few weeks out of Mexico. There are some volume spot market deals to be had in Texas due to the mild demand we are experiencing after the Valentines day holiday pull. Shippers are struggling to keep inventory moving especially out of Mexico.
Florida has been coming on recently with better numbers thanks to the increase in temperatures at the field level. Fewer recent rain events have also served to help overall production and quality in the area. Florida shippers are also looking to move spot buy volume at reduced prices to help make way for the newly found increased production. Overall the market is much easier In Texas and Florida, while California continues to experience short numbers and attempts to maintain higher pricing. This trend should continue into next week.

Alerts:
There are temporary volume deals available through the end of this week in Florida and Texas

Peak Seasons:
Mexican Strawberry production will slowly start to decline over the next few weeks

The broccoli market continues to pick up with the colder and wet weather we've recently experienced. Weather looks to be cooler the next few days in all areas slowing down the growth process. Next weeks weather in Yuma looks to warm up to the mid 70's. Look for supplies to get a little better with improved weather. Quality is good with slight purpling, some mechanical damage, and occasional yellow cast.

The Brussels Sprout market has leveled off but still remains snug with supply being affected by the recent rains. The quality has been affected by the rain and cold weather and sizing tend to run smaller due to this recent colder weather. Look for the Brussels Sprout market to remain tight going into next week.

The carrot market continues to remain steady. The quality is good, and supplies are adequate to meet current demand. We see no change in the carrot market going into next week.

Cauliflower continues to be extremely short. The market continues to get stronger as suppliers are battling lower yields. The Yuma weather has been cooler resulting in a slower growth process. Overall, the quality is good with minor bruising and some yellow cast with weights in the 25 to 28-pound level. Look for this market to continue to be tight going into next week.

The celery market continues to gain strength throughout the country. Escalated pricing is in effect on all contracts and value-added items. Demand exceeds supplies. Very cold soil temperatures in the Oxnard/ Santa Maria region coupled with heavy rains have stopped the growth and harvesting of this commodity. Common defects include bowing, leafy tops, mud, insect damage and pith. Needless to say, quality is fair at best. Yuma production is limited as well with the same type of defects. Expect fair quality and light supplies throughout the month of February.

Alerts:
Poor weather has slowed the growth of this commodity.

Jalapenos- Better supply of Jalapeno than last week available to load in Nogales, AZ from Mexico. Growers continue to harvesting jalapeno out of the Sonora and in Northern/Southern Sinaloa. Quality out of Sonora is Good. Quality out of Sinaloa is good. Mostly medium to large size available from both growing regions. Market on jalapeno has started to decrease and should continue to decrease minimally as we end the week. Jalapenos from Mexico also available to load in McAllen, Texas.

Pasilla- Moderate supply of Pasilla available to load in Nogales, AZ from Mexico. Moderate volume continues to be seen this week and should continue through next week. Quality on Pasilla is good. Size on the pepper currently ranges from Medium to Extra Large. Market on Pasilla is currently steady. Price on Pasilla pepper is expected to decrease moving towards the end of this week. Pasilla crossing through Nogales is being harvested in the Mexican states of Sinaloa. Quality from Sinaloa is good. Pasilla from Mexico also available to load in McAllen, Texas

Anaheim- Moderate supply of Anaheim continues to be available to load in Nogales, AZ from Mexico. Lighter Anaheim production expected through next week. Anaheim crossing through Nogales is currently being harvested in the Mexican states of Sinaloa. Quality of peppers from Sinaloa is good with mostly large size being packed. Market on Anaheim is slightly higher. Anaheim from Mexico also available to load in McAllen, Texas

Serrano – Better supplies of Serrano peppers available to load in Nogales, from Mexico. Serrano supplies expected to better through the week. Supply on Serrano this week meets demand. The production of serrano is slightly increasing. Price on Serrano pepper is decreasing on a 40lb box and #10lb Pack and is expected to remain steady through the week. Moderate supplies of Serrano also crossing into McAllen, Texas.

Tomatillo – Good volume on Husk and Peeled tomatillos are available to load in Nogales, from Mexico. Good supplies on both varieties expected to continue through the week. The tomatillo market is steady. Prices remain steady in the low teens. Quality on both varieties is currently good. Both varieties of tomatillos are also available to load in McAllen, TX.

The Cilantro market looks to continue to be steady in Yuma and Mexico. The cilantro quality is good and has been affected a bit by the colder weather at the beginning of January. Look for the cilantro market to continue to remain steady going into next week.

District 3 (Coachella/Mecca/Yuma) is extremely limited. Only a handful of suppliers have limited supplies. District 1&2 (Central Valley & Southern California Coastal Region) is coming along nicely and peaking on 75ct/95ct/115ct size to start. Due to the recent weather, the smaller size fruit 140’s and smaller are looking to tighten up for the next couple months. The rain and cold weather brought on the larger fruit and smaller fruit is staying limited on sizing and green on the trees. Current markets are looking steady, normal business on small fruit looks steady for now but could get snug in the next few weeks.

Weekly volumes continue to decrease on trucks crossing the border and lime market is getting active. The market has started creeping up and there is an imbalance in the US selling price and the field prices in Mexico. The market here is not rising fast enough to keep up with the rising field prices due to inventories at the border. In other words, it is costing more to buy the limes in Mexico than the general spot market is willing to pay in the USA. We expect this to drive volumes down as importers and packers have to stop losing and get the market up in order to keep going. There has been and still is a lot of larger sizes available but this is about to change when this last flush of fruit cleans up. The fruit that will be picked going forward will start to shift toward smaller sizes. We expect by the end of February large sizes will see a large premium over smaller sizes Current FOB market prices on 10# are $8 -$9, and the 40# current market prices are $22 - $26 depending on the size.

California is at the center of multiple storms bringing heavy rain, snow, wind, and flooding across the state – The Central Valley is no exception. Due to the wet weather, we are experiencing challenges with the harvest. Unable to get into the fields, supplies are very limited and we are experiencing shortages on all sizes and grades. With export demand being very strong, our domestic supply will continue to be limited as long as we have rain in the forecast. February is a great month for CA Citrus – We are harvesting some of our best varieties/fruit of the season. Once the weather clears, we will be back to harvesting and packing daily. Fruit continues to peak on 72/88/113. Supplies of XL fruit will continue to be limited for the next few weeks. We expect the market to go up some, as most shippers will see limited supplies to finish February. Most suppliers are holding off promotable opportunities until they build inventory supplies. We encourage orders to be placed at least 48 hours in advance to help allocate orders. Color and flavor are excellent, brix averages are climbing to 13-14 as we are into some of our best varieties of the season with great quality. The pack has been majority fancy grade with limited choice grade availability.
Satsuma Mandarins supplies are ample on any size or pack style. Brix is 12-14 and extremely juicy.
Delite Mandarins are coming along peaking on 32/28/24 followed by size 36.
Plenty of Pummelos available sizing and quality look great.
Cara Caras & Blood are moving along, plenty of supplies available.

Import cucumbers are in good supply and should continue with steady supplies until the end of February. Starting the first week of March Honduran supply will start to drop off as growers wind down for the season. Florida cucumber growers were late planting this season due to wet conditions potentially causing very light supplies in mid-March. Quality has been good on Honduran cucumbers, temperatures have been moderate with dry conditions producing firm fruit with a dark green color.

Peak Seasons:
Cucumbers are in peak availability for the next 2 weeks.

Good supplies of cucumber are being harvested in Sinaloa this week. Supplies are better as growers begin to transition from older fields. Mostly plain and small sizes available in 1 1/9 bushel pack this week along with 24ct and 36ct pack. Few Super, Select, and large size continue to be packed this week. The cucumber market has stabilized and is expected to remain steady through the remainder of the week. Quality out of Sinaloa is good.

Eggplant supply is steady with light demand. Eggplant quality is not good in most places, growers have been working on the same acreage most of the winter that has been through some tough weather. Eggplant is not a major commodity in Florida during the winter months anymore, the market is dominated by Mexican product this time of year and Florida has a tough time producing a good crop with short days and typically windy conditions through the winter. Growers will continue to cut light volume for the next month until new fields are ready for harvest in mid-March.

Alerts:
Most eggplant is poor quality.

Eggplant- Good supplies of eggplant continues to be harvested in the Mexican State of Sinaloa this week. Both fancy and choice grade currently being packed. Current market on eggplant is low and is expected to remain low on both grade packs this week. Quality from Sinaloa on fancy and choice pack is good.

Green grape supplies are still limited. This week, we are seeing slightly better availability on the west coast, but the east coast is still very limited. Although the industry is in a better position than we have seen over the last 4 weeks, supplies are still too light to fill the pipeline. Market prices are still firm and we expect things to remain the same for another 7-10 days. We will see markets slowly decline as better supplies arrive late next week. Quality is being reported as strong and sizes are in the Large to Extra Large range. We anticipate things to smooth out by late next week and hope to see consistent supplies over the next 4-6 weeks as we move through the import season.

Alerts:
Supplies are still limited and markets are firm.

Peak Seasons:
We expect supplies to improve and reach peak availability by March.

Red grape supplies are gradually improving week over week. This week's supplies are better than last week's and we expect even more availability next week. We have not seen the markets react as quickly or severely as we initially expected. Rather, there has been a very slow decline across the industry. We saw red grape prices come down $2 this week and expect an additional $2-3 drop next week. Most shippers are expecting more arrivals later this week with good availability starting Monday. Supplies seem pretty even on both the east and west coasts. Quality has been good with occasional soft berries being reported. Sizes are still in the Large to Extra Large range. We expect to see consistent supplies over the next 4-6 weeks as we move through the import season.

Peak Seasons:
We will enter peak supplies of import red grapes over the next 2-3 weeks.

The Green Onion market continues to come off with the recent nice weather in Mexico. Currently, the weather has cooperated with a little more supplies coming on. This recent cold weather in January is causing occasional leaf minor and mechanical damage. The green onion market will continue to come off going into next week.

The kale market continues to stay remain strong and steady with the recent rain and cooler weather in Yuma. Quality is fair with full bunches, and only an occasional yellow leaf being reported.

This market has become active with all suppliers. Demand is up. Cold weather has caused the plants to grow much slower than normal. Multiple shippers have a gap in production. Although the rains have slowed down in the Yuma region compared to last week the frigid temperatures continue. Common defects being reported about this commodity to include ribby, big veins, blister, mechanical, misshapen heads and puffiness. Please understand this is industry wide defects that are being reported. The quality is fair. Temperatures are expected to heat up next week, but will only be in the 60's this week. This will cause soil temperatures to stay below optimal conditions. The weights on liner lettuce are averaging 38-43 pounds.

Alerts:
Frigid temperatures and rain has caused difficulties in the growth of this commodity.

Romaine, as well as green and red leaf and butter, are active in the marketplace. Demand is clearly up compared to past weeks. The cold weather and rain have caused havoc to the growth cycle of these commodities. Twisting, mechanical, blister, fringe burn, and mildew are common defects being reported. All of these defects are industry-wide issues. Shippers are attempting to clean the product up before being packed, but simply put, only so much can be cleaned up. Fair quality will continue for the entire month of February at a minimum. The value-added product will have a shorter shelf life. Cool weather will continue in the growing regions for the rest of this week.

Alerts:
Poor weather is creating fair product quality at best.

The Tender Leaf market continues to remain steady on spring mix, arugula, baby spinach, and cello spinach. Quality issues are fair with minimal yellowing and bruising of the tender leaves. Look for these items to continue to remain steady going into next week.

Cantaloupe (offshore)
Arrivals will begin to increase next week but there are major retail promotions in place for early March. This will assist in stabilizing the market. Honduras and Costa Rica production is starting to decrease as they are completing their first cycles. Second cycle fruit will not start hitting until the third week of March leaving only Guatemala for the early portion of the month. Quality has been pretty consistent.
On the west we will see some delays this week. Due to the holiday, vessels will get backed up and arrive Tuesday/Wednesday. Suppliers will have good volume on 9s, 12s and 15s going into the weekend.
Shipments from Costa Rica into Florida- down 82%
Shipments from Guatemala into Florida- down 35%
Shipments from Honduras into Florida- down 25%
Shipments from Costa Rica into California- down 24%
Shipments from Guatemala into California- down 55%

Honeydew (offshore)
Shipments into the US are still down drastically this week but we are expecting arrivals next week to increase in Florida with improved sizing. As far as quality, it is hit and miss. There is good quality fruit but also seeing some occasional spotting. On the west, we will see better volume on open market fruit midweek. Mostly 8s and 9s with some 5s and 6s as well.
Shipments from Costa Rica into Florida- down 63%
Shipments from Guatemala into Florida- down 29%
Shipments from Mexico into Nogales- down 14%
Shipments from Guatemala into California- down 49%
Shipments from Honduras into California- down 61%
Domestic Melons-
Fruit in the desert (Yuma, Maricopa and Nogales) has been planted and we typically see the first harvest late April, early May. With the current cold temperature and rainy weather in the desert, we can definitely expect some setbacks on production come May. With most crops, cold weather and heavy rains during vulnerable points in the growing life cycle will result in adverse effects. This can possibly hurt overall yields as well as quality. As suppliers will try and mitigate the damage, there is only so much they can do. We will communicate as the harvest draws closer on domestic fruit.

Light to moderate supplies of watermelon available to load in Nogales, AZ. Only a few growers are receiving watermelon from Jalisco or Colima, the southern Mexican growing area. The seedless watermelon market has begun to adjust down as good volume is now being harvested. Quality from the new watermelon crop is good.

White Onions are in very few hands with a very strong market. Quality is fair at best. The only light at the end of the tunnel is Mexico supplies crossing into the U.S. through Texas. Supplies will slowly increase over the next several weeks accompanied by Reds then followed by Yellows. Medium Yellow and Red onions look to be limited for the balance of the Northwest storage crop and are getting a premium over the larger onions. Quality overall is still good with the occasional late storage translucent layers showing up. For this to be considered a quality defect, it needs to affect two full rings. Good air circulation in your onion holding rooms is key this time of the year. Transportation is good.

Transitions:
Mexico has started to cross White, Red and Sweet Yellow onions into the U.S.

Washington Bartlett pears season is coming to a quick close just in time for the Chile import season to kick in. Demand is light with a steady market. Sizing is peaking on 90-110. D'Anjou and Red pears market is steady with moderate supplies. Quality is good.

Transitions:
Imported Bartlett pears from Chile have started.

Current supplies are improving and will continue to get better each week the next couple of months. Demand on the crownless has increased industry-wide and suppliers are doing their best to keep up with the current demand. Crownless supplies expected to start improving in a couple weeks. Current market prices on all sizes between $10-$12.

Russet potato carton market is strong on 70 counts and larger with the smaller sizes steady. Retail bags demand continues to be light which is keeping some sheds only running limited hours. Norkotah variety is getting into fewer hands and will finish up in March. Burbank sizing currently is peaking on 80 count and smaller with very few 60 count and larger. Will this continue through the balance of the season? Only time will tell. Quality is still being reported as good with very few reports of issues upon arrivals. Transportation is good.

Alerts:
Russet 60 count and larger limited out of Idaho

Red and Gold potato market is steady with good supplies available out of Washington, Idaho, California, North Dakota, and Florida. Quality is good. Sizing is peaking on A size on both colors except for Florida. Florida sizing is peaking on B size and smaller with few #2's.

Squash is being harvested in good supply all over south Florida. Warm dry weather has brought squash production up to peak availability. Squash always runs in cycles and we have been in an up cycle for the past two weeks, don't expect that to change for the rest of this week. Quality is good on zucchini, some issues have been reported with scaring and discoloration on yellow squash. Growers are indicating production could slow down next week.

Peak Seasons:
Squash is in peak availability.

Italian and Yellow S/N- Good supplies of Italian squash continue to be available to load in Nogales, AZ this week. Better supplies of Yellow S/N also available. Price on Italian squash is firming up after the market was oversupplied for a couple of weeks. Market on yellow s/n has stabilized on both #1 and #2 grade pack . Quality on both packs on Italian is good. Quality on yellow s/n is fair to good on #2 grade pack and mostly good on #1 grade pack. Supply on Italian squash continues to exceed demand. Supply on Yellow S/N is moving better due to increased demand.

Not much change on import stone fruit this week. Supplies are fairly consistent as are markets. Sizing is still running on the bigger side. Both tray pack and volume fill is available. Peaches, nectarines, red and black plums are available on both the east and west coasts. Quality is being reported as very strong. We expect consistent arrivals of fruit moving forward. Markets will gradually adjust down over the next 7-10 days.

Peak Seasons:
We expect to see peak supplies of import fruit over the next 3-4 weeks.

Overall tomato volumes have been reduced from rain and cool weather throughout Florida growing regions, however, a full range of sizing is available on rounds as growers harvest through the crown, 2nd and 3rd picks. Roma volumes continue to be light for the season but heavy volumes crossing from Mexico continue to keep Eastern FOBs competitive. Quality is mixed but a fair amount of #2 fruit is available as a result of recent rain and wind. Grape and cherry tomatoes yields are mixed between farms as supply continues to improve this week. A warm weather trend has helped boast grape tomato production bringing fobs to the lowest offerings of the year thus far.

Mexico is in full swing production working through winter crops with steady volumes crossing AZ and TX. Nearly all items are at Suspension agreement minimums. There is a good supply of large rounds and plenty of volume spanning all varieties. Roma tomatoes have strengthened by a dollar or so following a series of scattered showers in Mexico while farms rotate. With mostly dry weather conditions in the coming week, markets should continue into February near minimums with healthy supply through both McAllen and Nogales facilities.