The Source - July 10, 2019

Washington:
The apple market continues to firm up as we make our way to August. Ginger Golds are expected to gap as shippers continue to struggle with filling orders. Those shippers who do have them are selling to the shippers who don’t (and for a substantial price). Many shippers have scaled back their apple packing lines and have allocated much of that labor to cherries, which has also contributed to the active market.

In the coming weeks, we will see smaller shippers ‘clean up’ on certain varieties (Granny Smith, Pink Lady, Honeycrisp, Braeburn, and Gala), adding pressure to the large shippers who have fruit year-round. Similar to years past, July will bring increased prices as we move closer to August and to the new harvest. Early reports indicate that we may see bigger sized fruit for the upcoming season, but there have not yet been official estimates published.

We should see Wildfire Galas start towards the end of July and Royal Galas the last week of August. Ginger Golds and early Honeycrisp to start the week of August 5.

Flexibility on subbing sizes/grades/varieties is essential—, especially on smaller, foodservice sizes.

California:
Buckeye Galas should start around the end of July/beginning of August (heavy, spring rains have affected CA start dates). Granny Smiths should start at the end of August/first week of September.

Chilean Braeburn – 70-90ct XFCY (available now)
Chilean Pink Lady – 70-90ct XFCY (available now)
*Fresh harvest (not C.A.)—FOB L.A.

Alerts:
Golden Delicious (Washington) continue to be in few hands and may gap until new-harvest, Ginger Gold apples are available (first week of August).

Transitions:
California Gala expected end of July / first week of August
California Granny Smith expected at the end of August / first week of September

Central Mexico (Guanajuato) production has decreased this week due to lack of rain. Rain is expected this weekend, and we should see better volumes in 7-10 days. The bigger sizes are still short in the market due to the weather. Peru supply has remained unchanged and should stay about the same through July. Peru is having the same issue on the bigger sizes due to weather in the South, this should get better in about 4-6 weeks when the weather becomes warmer. Markets on both coasts are more active and should remain the same for about 7-10 days.

California continues to harvest at a much faster pace rate than expected. With the pipeline short on Mexican fruit, California is providing relief on the west coast and as far down as Texas. The fruit is showing great internal and external quality. The flavor profile is on point as fruit eats great and cuts well. Volume will taper off come August.

Fruit remains tight this week. Demand exceeds supply and fruit is holding at a premium. The new crop "Flora Loca" is arriving in the US with very light numbers. This new crop fruit will take about 10-12 days to ripen and will remain green externally when ripe. New crop fruit will also be heavy on smaller fruit and #1 grade fruit. With inventories depleted, suppliers are not only trying to ripen fruit as quickly as they can but also replenish inventories. California, Peru, and Columbia have all been key players in supplying the industry while Mexico transitions into new crop fruit.

Alerts:
Strong market conditions are expected for the month of July as Mexico transitions into new crop fruit.

Bell Pepper supply is in transition from North Carolina to New Jersey. North Carolina is over its peak production but will continue shipping until the end of July. New Jersey bell pepper volume is picking up and will peak the third week of July. Quality is good in all regions, size is trending mostly to larger sizes. The market is steady with good demand, most supply is in only a few hands this week, so expect the market to stay on a steady pace through the week.

Transitions:
Bell Pepper is in transition to New Jersey.

Green Bell Pepper- Good supplies of green bell pepper are being harvested in Bakersfield, CA and in the Fresno, CA growing area. Mostly XLG Retail size and choice grade being packed. Quality on green bell pepper from these areas is good. Green bell pepper supply currently exceeds demand, and the market has decreased with better supplies of green bells. Green bell pepper from Mexico is also available to load in San Diego, CA and McAllen, TX.

Red Bell Pepper- Good supplies of red bell pepper are being harvested in the Bakersfield and Fresno growing area. Both retail and choice grade currently being packed from this district. Quality from Fresno and Bakersfield is good. Supplies from the Coachella growing district have finished up this week. Light supplies of Red Bell pepper still crossing through Nogales this week. With better supplies being harvested in the Bakersfield and Fresno market has decreased on mostly choice grade. Market on retail grade has maintained steady. Red bell pepper is also available to load in McAllen, TX.

Yellow Bell Pepper- Light supplies of Yellow Bell pepper continue to arrive in Nogales this week from Mexico. The hothouse bell pepper crossing through Nogales is mostly being packed in choice grade. Supplies crossing through Nogales is expected to finish this week. Light supplies of bell peppers are being harvested in the Bakersfield and Fresno Growing area. Better supplies of yellow bells expected to begin next week. Market on yellow bell peppers is expected to continue to be high with light supplies through the week. Yellow hot house bells are also available to load in McAllen, TX.

Blackberries continue to be in light supplies in any one growing area. Western shippers are transferring fruit from Georgia and Oregon to help fill orders. Quality is good in most lots with the occasional older fruit showing some age upon transfer arrival. Look for the market to remain firm through July as we wait on the warmer weather to increase production out West.

Blueberries are in production all along the Pacific Northwest in Oregon, Washington, and British Columbia. The market is easier and promotable volumes are available. Quality is excellent. Servicing the Eastern Seaboard in New Jersey, Michigan, North Carolina and the tail end of the Georgia crops. Mexico has dropped out of the mix due to the reduced returns on their product because of the multiple loading options we have at this time.

Peak Seasons:
Blueberries are moving into peak volume in the Northwest

Raspberries continue to be steady mainly out of the Watsonville area and production should increase steadily as we move into warmer weather. Quality is good in most lots. Look for the market to remain firm through next week

The strawberry market will remain firm this week as the actual damages from the recent inclement weather become increasingly evident keeping supplies short. Quality and quantities have been affected for much longer than the anticipated period of time. The market remains stable with higher undertones. Most growers are expecting this steady trend to hold through the last week of July when warmer temperatures should help plant growth and production numbers. Quality is just fair right now. Watch for weather-related issues to still be present in most lots including bruising, full ripe and short shelf life.

The broccoli market continues to stay steady and plentiful as we've experienced some recent warm weather. This recent warm weather has increased yields and has affected the overall quality. Quality is fair with slight purpling, some mechanical damage and occasional yellow cast.

The brussels sprouts market continues to stay steady as there is plenty of supply is in the pipeline. The recent warm weather has brought on yields. Look for the Brussels sprouts market to continue to adjust going into next week.

California carrots remain steady with good supplies. The Rainbow variety is now back in production for the 25 pound pack after a month-long gap. Mexican jumbo carrots crossing into the U.S. through Texas remain fairly tight with an escalated market. This spike was caused by recent rains in Mexican production areas making it difficult to enter fields to pack. Mexico will continue to experience sporadic rains as it is their wet season.

Alerts:
Mexican jumbo carrots still remain tight

The recent warm weather in the Salinas Valley continues to keep supplies moderate to plentiful. Overall, the quality is good with minor bruising and yellow cast with weights in the 25 to 28-pound level. Look for the market to continue to adjust going into next week.

Demand continues to fall off with this commodity. Better availability has surfaced for bin product as well, as long stock celery production has picked up. Previously celery has been very limited for the last five to six months. Santa Maria/Oxnard, as well as northern California, are expecting to have moderate to good availability on carton celery for the entire week. Large sizing, twenty-four counts, in particular, will have the best availability for the week. Some minor defects being reported to include leafy tops, mechanical and some insect damage, but minimal. The overall quality is being reported as good from most shippers.

Washington
Over the past few years, overall, state-wide cherry volumes (total bins) have lessened each year and this year’s volume is predicted to be smaller than last year’s. Retail ads continue to command volume; therefore, keeping prices strong and inventories low. For some smaller shippers, they will finish packing this week and quickly sell out of inventory.

Jalapenos- Moderate supply of Jalapeno are still available to load in Los Angeles from Mexico. Jalapenos are being harvested in Baja California with good quality. Mostly medium to large size are available from this region. Market on Jalapenos has maintained in the mid-teens. Light supplies of Jalapenos also being harvested in Santa Maria, CA. Jalapenos from Mexico are also available to load in McAllen, Texas.

Pasilla- Moderate supply of Pasilla peppers available to load in Los Angeles from Mexico. Pasillas are being harvested in Baja California. Quality on Pasillas from this region is mostly fair to good. Size on the pepper is mostly medium. Market on Pasillas is higher/steady. Pasilla from Mexico also available to load in McAllen, Texas.

Anaheim- Moderate supply of Anaheim available to load from Baja California. Quality from Baja is mostly good. The market for Anaheim is in the mid-teens and is expected to stay there through the week. Anaheim peppers are also available from Mexico to load in McAllen, Texas.

Serrano – Moderate supplies of Serrano peppers available to load in Los Angeles, from Mexico. Supplies are expected to remain steady throughout the week. Supplies currently meet demand. Price on Serrano peppers is currently in the high teens and is expected to remain the same through the week. Serrano supplies also crossing through McAllen, Texas.

Tomatillo – Husk tomatillos are available to load in Los Angeles from Mexico. The quality of husk variety is good. Good supplies on husk tomatillos are expected to continue through the week. The tomatillo market has increased slightly on both husked and peeled. Both Husked and Peeled tomatillos are increasing in the teens. Both varieties of tomatillos are also available to load in McAllen, TX.

The cilantro market continues to stay steady with more supply in the pipeline. The cilantro quality is fair with an occasional yellow leaf. Look for the cilantro market to continue to be steady going into next week.

Domestic supplies will continue to remain tight on 140’s and smaller for most of the summer. Market prices continue to stay strong, looking at mid $30’s on choice and fancy fruit. Quality of domestic supply continues to improve. Offshore supply is getting better weekly on inbounds on both coasts which will help offset domestic supplies. We’re hearing great feedback on the export quality.

Plenty of volume to push out on all sizes, markets continue to remain light. Low teens to single digits on the 40lb pack and single digits on the 10lb pack. Suppliers have been receiving inbounds consistently and supplies are expected to be good the rest of the month.

With navels pretty much done, production on California Valencia’s will increase. We’ll have plenty of supplies on all sizes and grades with great quality. Markets on both grades are in the mid-teens. On Specialty Citrus, the Bloods have a few more weeks left and a few suppliers have started to import Clementine Mandarins. Supplies will gradually increase weekly. Grapefruit supplies are looking plentiful through the summer, plenty of opportunities to push volume.

Cucumber supplies are tight with small volumes in a few locations. Western North Carolina, Virginia and New Jersey all have light supplies of cucumbers. Michigan and Ohio have started very light supply, this where the next big volume will come from but most shippers will not start until next week. Quality has been good in most regions, and the number one grade product has been at a premium. Pricing on select cucumbers has gone up over the past week but not to the degree Super Selects have. We expect supplies to continue to be tight through the week.

Transitions:
Cucumbers are in transition to Michigan

The cucumber market is on the rise. West coast cucumbers are currently being harvested out of Baja California. Crop from Sonora has finished this week. Good supplies of cucumbers are being produced by the Baja district. All sizes and pack styles currently being packed. Demand for retail cucumber has exceeded supply on the West Coast. Quality from Baja is good. Moderate supplies of Mexican cucumbers are also crossing and available to load in McAllen.

Eggplant supplies are steady and pricing is a little higher this week. A few shippers in Georgia will continue through the week, North Carolina is in the peak of their season and New Jersey is starting this week with light supplies. Quality is good in most regions. Eggplant from Georgia is starting to show it's age and wear and tear from heat and rain. Demand on eggplant is not very strong keeping pricing at a moderate level.

Transitions:
Eggplant supply is in transition to North Carolina and New Jersey.

Light supplies of eggplant continue to be available to load in Los Angeles. Eggplant is currently being harvested in Bakersfield, CA. Light supplies of eggplant are expected through the week. Both fancy and choice grade being packed. Quality on domestic eggplant is currently fair at best. Fresno, CA is expected to start harvesting eggplant this week. Eggplant supplies from the Coachella Valley are expected to finish this week.

We started the new harvest of green grapes this week in California's Central Valley. Production is light but will ramp up quickly as we move forward. We continue to see an overlap of harvest with Coachella and Mexico. However, we have seen several reports of quality issues on Mexican grapes. Soft, wet berries, shatter and early decay are some of the issued we have seen this week. Coachella seems to be holding up, but both areas are approaching the end of their seasons and we need to start making the transition into the new harvest. Prices are more expensive on the new harvest, but the quality is better. As we move forward, we expect good quality and increased production out of the central valley. As volumes increase, prices will gradually level off. Look to make the move over next week.

Alerts:
Mexico grapes have shown some quality issues as we approach the end of their season. New harvest in California is looking good, but prices are higher.

Transitions:
New harvest in California's Central Valley started this week and will ramp up quickly. Quality is looking great.

We started a new California harvest this week in the Central Valley. Harvest numbers are lighter and market prices are higher. However, the quality is much better than what we are seeing out of Mexico. Coachella is still harvesting and the quality seems to be holding up. Mexico continues to have good volume, but we have seen several complaints this week on quality. We are approaching the end of the season and prices are cheap, but the quality is starting to suffer. We are seeing wet berries, shatter and early decay. This week is the first week that we have seen this wave of issues, but it is a good indication to make the switch to a new harvest. We expect Central Valley production to continue to increase moving forward. We will continue to have an overlap between the new harvest in Coachella and Mexico for the next week or so. Again, there will be a big price disparity between new harvest and Mexico, but as production increases in California, we expect prices to level off. Moving forward we will transition into 100% Central Valley harvest and we expect good quality and supplies for the season.

Alerts:
Mexico grapes are approaching the end of the season and quality is deteriorating quickly. Coachella seems to be holding up. New Harvest in California just started.

Transitions:
New harvest just started this week in California's Central Valley. Prices are higher, but quality is excellent.

The green onion supply continues to be plentiful with the recent nice weather in Mexico and Salinas. The cooler weather in March is causing occasional leaf minor and mechanical damage. The market will continue to stay steady going into next week.

The kale market continues to remain steady as supplies stay plentiful. Quality is fair with full bunches and an occasional yellow leaf being reported due to the recent heat wave.

Expect production of this commodity to be light all week. Demand exceeds supplies. Escalated pricing continues on all value-added items. Shippers are firm on averages and this will continue for the entire week. Aside from lightweights, the quality has been good. Weight is averaging 34-38 pounds on liner lettuce. There have been minor reports of mechanical, misshapen heads and growth crack but these defects are minimal. The weather has cooled off and growers are gaping in production. With the holiday past us, demand was expected to fall off but thus far this has not happened. Supplies are expected to be better in seven to ten days.

Alerts:
Lightweights on liner lettuce are being reported at 34-38 pounds.

The romaine market is steady with some suppliers while others have eased up slightly. The overall production for this commodity is on the lighter side. Shippers were not able to offer value-added romaine to begin the week except for normal averages. This will likely continue for the entire week. Although schools are out, demand exceeds supplies due to gaps in production with multiple growers. These production gaps are expected to continue throughout this week, at minimum. Green leaf continues to be very limited as well. Butter and red leaf are average. Romaine hearts continue to be very active and demand exceeds supplies, industry-wide. Escalated pricing is in effect on romaine and green leaf items. The quality is good with leaf items. Minor mechanical, insect damage and tip burn have been reported but in a very light way. The weights on romaine are averaging 33-38 pounds and green and red leaf range from 22-25 pounds.

Tender Leaf supplies continue to be plentiful as the weather in the Salinas Valley has recently spurred on the growth and have produced better yields. Curly parsley, spinach, and arugula have reacted to the recent warm weather and supplies look to be in good shape going into next week. Quality is good with occasional yellowing and bruising of the tender leaves.

Cantaloupe is a little flat due to the overlap between growing regions. In California, we are seeing good numbers on small fruit. Quality on California fruit is good with Brix levels in the 12%-14% range. Desert fruit is showing availability on all sizes. There will be fruit in the desert for another week or two as the season is coming to an end.

We continue to see warm temps in the San Joaquin Valley this week. Growers are seeing mostly smaller fruit as the season ramps up. Solid internal and external quality. Large fruit is limited this week but expecting better numbers next week. The desert is tapering off and will be done for the season in the next week or two. Late season fruit is fair with good availability on all sizes. We can expect an overlap between these two growing regions for the next few weeks.

Light supplies of watermelon are still available to load in Nogales, AZ. Mostly 2/3 bins continue to be packed. Quality of the watermelon crop from Sonora, MX is mostly fair. Supplies from Sonora, Mexico should finish up this week. Watermelons have started to be harvested in Phoenix, Arizona. The seedless watermelon market remains low as summer demand continues to be light. Watermelon quality out of Arizona is good.

Yellow onions had a slight dip heading into the week but now showing strength as New Mexico has a few growers gapping on supply and pushing demand into California. We expect to see a strong market into next week and looking to the week of July 22nd to see another drop in the yellow onion market when New Mexico has improved production. Red onions in both regions are in good supply and seeing lower markets. White onions will see a stronger market as supplies are limited and expected to be tight until new crop in the Northwest begins late August/early September. Winter-over onion supplies in Washington quickly dried up with the heavy demand. Walla Walla sweets are still available out of Burbank. New crop in the Northwest is expected to start mid-to-late August.

Alerts:
Yellow onion markets showing strength. Reds in good supply. White onions limited.

Washington:
The pear market is steady, but inventories are quickly depleting. With availability limited to Green D’Anjou (Red Anjou are done), there are only a few shippers who have inventory. As we make our way through July, that inventory will continue to diminish, especially on 110ct and smaller. New crop Green Bartletts are expected mid to late August, followed by Red Bartletts/Starkrimson at the end of August.

California:
IMPORTED PEARS: Chilean and Argentinean Bartlett pears are available to load in Los Angeles. Also, Chilean Packems (70-120ct) are available.

CALIFORNIA BARTLETT pears are expected to start the week of 7/15 or 7/22. CALIFORNIA BOSC pears are expected to follow the week of Aug 12.

Alerts:
Only Green D'Anjou available in Washington (Red D'Anjou done for season)

Transitions:
California Bartlett pears available the week of July 15 or July 22.
California Bosc pears should be available the week of August 12.

The strikes that occurred last week in Costa Rica have been resolved, which puts supply in better shape, but it doesn’t change our current tight situation. Most customers have been flexible with subbing sizes to fulfill orders in full. Quality has been becoming more of an issue. We’re seeing occasional browning on the interior of the fruit which is usually attributed to excess water absorption from when the pineapples were in the fields. Markets continue to remain steady in the mid teens. We’ll continue to take it week to week on supplies.

Idaho potato markets are on the move for most sizes as the Burbank storage crop winds down for the season. Larger size 40 count through 70 count continue to inch higher with smaller sizes now showing a rising trend. Suppliers are reviewing their cellars and slowing down production to stretch the remaining inventories for the balance of the storage crop. With additional demand shifting into other regions such as Washington, Colorado, and Wisconsin, expect to see markets creep up in all areas. Quality in the late storage potatoes will show more shoulder bruise as we get deeper into July. The occasional hollow heart will also be seen in some lots. Wisconsin quality remains fair. It is highly recommended to provide ample lead time over the next 5-6 weeks to ensure order coverage.

Alerts:
Potato markets on the rise as Burbank storage season winds down. Advanced lead-time on orders necessary.

Color potatoes continue to be in short supply with very active markets. California remains the main source of supply for red, yellow and white. Bakersfield is finishing up and transitioning into the Stockton area putting even more pressure on the West Coast. Texas has started this week on reds and yellows but off to a slow start due to rain over this past weekend. The weather has improved and production is expected into August. North Carolina/Virginia are struggling on red potato supplies with yellow and white in good production but heavy demand keeping volume to a minimum. Alabama has started their very short 2-3 week deal with some reds and will see yellow potatoes by the end of the week. Minnesota is expected to start the first week of August and potentially bring some relief to the overall supply.

Alerts:
Supplies limited with sporadic sizing available. Markets to remain active through July.

Transitions:
California moving from Bakersfield into Stockton area.
Texas and Alabama starting up.

Squash supplies are in a few locations but no location has a very big supply. Yellow squash is very tight. Supplies of green squash are better but demand is good and shippers are struggling to fill orders. Western North Carolina, Virginia, New Jersey Pennsylvania and Connecticut are shipping light supplies of squash. Michigan and Ohio are starting with light supplies, but the volume in the mid-west should pick up by next week.

Alerts:
Yellow squash is in very light supply

Both Italian and yellow straight-neck squash continue to be harvested in Santa Maria, Fresno, and Baja California. Better supplies on Italian squash continue to be available than Yellow S/N from all three districts. The market on soft squash is currently steady. Quality from Santa Maria, Fresno, and Baja California is good on Italian squash and Yellow S/N. Good supplies are expected to continue on both Italian and Yellow S/N through the week.

Stone fruit supplies are steady, but due to the warm weather and new varieties, size is ranging on the large side. Smaller fruit (TP 54 and VF 60 and smaller) is limited. This is especially true on Peaches and Nectarines. Plums are sizing up as well, but there are still some smaller sizes out there. Growers continue to have plenty of volume available for promotional opportunities. We are in the peak of the domestic season. Quality has been excellent. Demand has been lower than years past and shippers are looking for business. We expect to see good supplies through August.

Alerts:
Smaller sizes are limited. Plenty of large fruit in all varieties.

Peak Seasons:
We are currently in peak season and expect good supplies through August.

Regional programs are underway and the market tone is steady to lower this week as more fruit becomes available. Programs in Quincy, Fl, GA, and SC have finished for the season. As anticipated for early July, smaller operations are popping up helping to improve eastern supply loading at regional farms in AL, NC, TN, and VA. The round market has begun to soften by a dollar or more this week as supply and quality continue to improve. Roma tomatoes are beginning to fill the eastern supply chain out of farms in TN and NC helping to stabilize the market. Grape tomatoes have also transitioned to new fields, moving from FL, GA, and SC further north to VA and Eastern TN where volume and quality have improved greatly from just 2 weeks ago.

Mexico tomato prices are steady from last week. Baja and Eastern Mexico are underway and have begun to establish the western market for vine-ripes in the US. Northern California is continuing to ramp up production of mature greens improving the market by a couple of dollars this week as farm production builds momentum in the San Joaquin Valley. Roma tomato FOBs are steady and expected to slide as California gradually increase operations over the next 7-10 days. Mainland Mexico is slowly improving Grape tomato harvests while Baja continues to produce better quality as they move into new fields. Duties remain at 17.56% of the value of tomatoes crossing into the US directly affecting the cost of goods. The added costs for importers will ultimately be reflected in what the consumer pays and is pressuring Mexico to help offset costs by keeping prices low to continue the flow of tomatoes into the US. Since the suspension agreement was terminated in early May, the current landscape is proving to establish a new “minimum” as Mexico works to find footing in the US market. It is too soon to determine how both supply and demand will be affected in the long run, but it is expected that imports will be reduced at some point in the future.