The Source - July 3, 2019

Washington:
Currently, there is talk of Golden Delicious apples 'gapping' between mid-July and the start of new harvest (early to mid-August). Right now, very few shippers have Golds; those who do are selling to those shippers who do not and are commanding significant money. Many shippers have scaled back their apple/pear packing lines and have allocated much of that labor to cherries.

In the coming weeks, we will see smaller shippers ‘clean up’ on certain varieties (Pink Lady, Honeycrisp, Braeburn, and Gala), adding pressure to large shippers who have fruit year-round. Similar to years past, July will bring increased prices as we move closer to August and the new harvest.

‘Spot Buy’ opportunities are few and far between but may be available on occasion. Continue to send apple/pear orders early. The extra time is needed to source product, that some shippers do not have, in an effort to limit the number of pickup locations. Flexibility on subbing size/grade/variety is essential, especially on smaller, foodservice sizes.

California:
California Gala apples are expected to be available the week of August 12 followed by Granny Smith the week of Labor Day (September 2).

Chilean Granny Smith – 80ct XFCY (available now)
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 apples are extremely tight and may not be available between mid-July and early August (new harvest).

Central Mexico (Guanajuato) production has increased and will continue to have good volume through the middle to end of August. Bigger sizes continue to be an issue from this region. All domestic regions have wrapped up due to seasonality. Peru supply has started to increase, and we should see this trend through the end of November. 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 with all domestic regions wrapped up.

California production has been strong due to the short supply on Mexican fruit. Domestic fruit has been key in providing relieve on the west because of the depleted Mexican market. With so much pressure and strong demand on California fruit, harvest should be done come August. Overall quality is great internally and externally with great shelf life.

Inventories of Mexican fruit are depleted as the industry is limited on options. Demand exceeds supply and fruit is holding at a premium. Suppliers are scrambling to cover orders. Peruvian fruit has played a key roll in bridging the gap on the shortage of Mexican fruit in the pipeline. Peruvian arrivals in the US have peaked and are well up over last year (Just shy of a 200% increase). Despite the solid flow from California and Peru, it is not nearly enough to offset the decline in Mexican production. Orders calling for Mexican fruit, have flex on sizing and country of origin.
Inventories of Mexican fruit are depleted as the industry is limited on options. Demand exceeds supply, and fruit is holding at a premium. Suppliers are scrambling to cover orders. Peruvian fruit has played a vital roll in bridging the gap on the shortage of Mexican fruit in the pipeline. Peruvian arrivals in the US have peaked and are well up over last year (Just shy of a 200% increase). Despite the uninterrupted flow from California and Peru, it is not nearly enough to offset the decline in Mexican production. Orders calling for Mexican fruit, have flex on sizing and country of origin.
New crop “Flora Loca” fruit will be a slow ramp up as the industry awaits. Growers are anticipating this new crop to be heavy on #1 grade fruit and small fruit (84s-60s). There are concerns of the fruit not meeting the required dry matter/oil content. For the month of July, the ideal dry matter percentage on Mexican fruit should range between 22%-25%. Early season fruit tends to have a very low dry matter, stays green externally when ripe and, and takes 10-12 days to ripen. With the 4th of July just a few days out, it will delay crossings this week on new crop fruit. The industry will see very strong market conditions for the month of July and could very well continue into the month of August.

Alerts:
The industry is in a demand exceeds supply situation on Mexican fruit. We expect strong market conditions for the month of July and could very well continue into the month of August.

Transitions:
New crop Mexican "Flora Loca fruit" will slowly ramp up. Better supply in the pipeline by the end of July.

The Pepper supply is spread out from Georgia to New Jersey. The largest supply is in North Carolina. Georgia will finish up this week and New Jersey is just getting started. Quality on Georgia bell peppers is fair but the product is starting to show wear and tear from very hot temperatures. North Carolina is in the peak of its season with good quality and quality coming out of New Jersey is good. Volume in New Jersey will start to pick up after the 4th of July. We expect the market to stay steady for the next couple of weeks, as supplies pick up in the northeast they will decline in the south. Michigan is running late this summer.

Transitions:
Bell Pepper supply is moving out of Georgia and up to North Carolina and New Jersey.

Peak Seasons:
Bell Pepper is in Peak season

Green Bell Pepper- Good supplies of green bell pepper being harvested in Bakersfield, CA. Both retail and choice grade continue to be packed. Quality of green bell pepper from this district is good. Green bell pepper supply currently meets demand, but the market has risen with higher demand. Green bell pepper harvest has also started in Fresno, CA with mostly large retail size. Green bell peppers from Mexico are also available to load in San Diego, CA and McAllen, TX.

Red Bell Pepper- Light supplies of Red bell pepper continue out of Coachella/ Thermal and Fresno will begin in a small way. Market has strengthened with prices escalating from limited supplies and increased demand. More choice grade than retail-grade on domestic product and quality is good. Light production expected throughout the week. Light supplies of red hothouse bell pepper continue to be harvested in Baja California. Red bell peppers are also available to load in McAllen, TX.

Yellow Bell Pepper- Limited supplies of Yellow Bell pepper continue to arrive in Nogales this week from Mexico. The hothouse crossing through Nogales is mostly being packed in choice grade. Market on yellow bell peppers has strengthened with demand exceeding supply. Yellow bell pepper continues to be harvested in the Coachella Valley this week where production is expected to be steady through the week. Yellow hot house bells are also available to load in McAllen, TX.

Blackberries in short supply but that situation is improving as shippers are drawing product from Georgia and Oregon for consolidation at Western shipping locations. The Watsonville CA area should begin to pick up volume as we move forward into warmer summer weather. Quality has been good however, there are the occasional leakers and red cell being found at arrival destinations. Look for the market to remain steady to slightly higher as shippers are forced to tack on transfer costs.

Transitions:
Blackberries are now being packed in Oregon

Blueberries are finishing up in The Central California Valley but the volume out of Washington and Oregon has been going for approximately a week. Adding to these supplies will be the British Columbia region beginning in a light way this week. East coast fruit is coming out of Georgia, Michigan, and New Jersey. There have been some reported issues with the New Jersey crop's quality causing many customers to look west for their blueberry needs. Mexico is still crossing into the U.S. through Texas in a light way and quality has been good. With all of these options for loading, look for the market to ease off this week as we approach the holiday lull.

Alerts:
Multiple Growing regions going options in both East and West

Raspberries are still in good supplies with some shippers using an overabundance of organic raspberries to sub for the leaner conventional supplies. We look for the market to remain steady as we move closer to better numbers in late July as the heat of summer ripens the fruit. Mexico is still crossing product into the U.S. with light numbers. Quality overall has been good.

Strawberry numbers remain unseasonably light for this time of year. Many shippers are still reporting reduced yields and adjusted daily projections moving into this holiday weekend. The quality is gradually improving, however, some lots are still arriving with issues. We suggest you keep your inventories lean as we approach the weekend due to the lack of strong shelf life combined with the inevitable lull in demand. The market is remaining firm and is expected to stay that way through the weekend. Look for more of the same steady trending next week.

Alerts:
Supplies will remain snug moving into the weekend. Large open market orders may be difficult to cover.

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 adjust as more supply is in the pipeline. The recent warm weather has brought on yields. Due to rain and cold weather, the size is affected an tends to be smaller. Look for the Brussels sprouts market to continue to adjust going into next week.

Carrots remain in steady supplies out West with little change in the market. The Mexican 50 and 25 lb jumbo carrot market is another story. Prices have risen sharply since mid last week and availability has been limited due to extreme weather in the Mexican growing regions. Look for that market to remain steady through next week on those items. Quality has been good out of all areas.

Alerts:
50 lb Mexican jumbo carrot pricing is much higher

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.

This market has fallen off with all suppliers. Northern and Southern California has plenty of production to meet demand. The overall food service business is off and with the lack of school business, expect supplies to be good for the entire week. Long stock celery will continue to be limited unfortunately but carton packages will be plentiful. The best sizing will be in twenty-four and thirty counts. Some defects were reported to include mechanical, and bowing but minimally. The overall quality will be strong.

Alerts:
Market coming way off with this commodity.

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 will continue over the next couple of weeks and should keep prices strong and inventories low. There are smaller shippers, who are not locked into ad commitments and have fruit that is superb.

Jalapenos- Moderate supply of Jalapenos are still available to load in Los Angeles from Mexico. Jalapenos are being harvested in Baja California, where the quality is excellent. Mostly medium to large size are available from this region. Market on Jalapenos has maintained in the mid-teens. Light supplies of jalapeno 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. Pasilla is being harvested in Baja California. Quality on Pasilla from this region is mostly fair to good. Size on the pepper is mostly medium. Market on Pasilla is higher/steady. Pasillas 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 from Mexico also available 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 pepper is presently 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. 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 also available to load in McAllen, TX.

The cilantro market has come off a bit with a little bit 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.

Supplies continue to remain tight on 140’s and smaller. Market prices continue to stay strong, looking at mid $30’s on choice and fancy fruit. Shippers are doing their very best to improve quality and extend shelf life. Some shippers have started utilizing offshore product, mainly on the east coast. On the west coast, containers are slowing trickling in, more inbounds should improve by mid-July.

Plenty of volume to push out on all sizes, markets continue to remain light. Low teens on the 40lb pack and single digits on the 10lb pack. There were few lighter inbounds the past week, but supply has been plentiful. Good supplies expected the rest of the month.

Valencia supplies continue to improve weekly, especially on the small sizes 113’s/138’s. Markets on both grades are in the mid-teens. Quality is looking great! Plenty of promotional opportunities available. On Specialty Citrus, the Bloods, Golden Nuggets, and Ojai Pixies have a few more weeks left. Quality is looking fair on all three varieties. Grapefruit supplies are looking plentiful through the summer, plenty of opportunities to push volume.

Cucumber supplies are tight and spread out across the eastern half of the country. Georgia is finished for all intense and purposes, but a couple of shippers will continue through this week. Eastern North Carolina is done and Western North Carolina is just starting. Virginia, New Jersey, and Pennsylvania are all shipping light volume of good product. The mid-west, Michigan, Indiana, and Ohio has just begun and will have very light volume until after the 10th of July when supply should get much better. With a cold wet spring, the mid-west is at least 10 days behind schedule, temperatures have warmed up the past week so product will start growing faster. Expect the market to stay strong until the 10th to 15th of July.

Alerts:
Cucumbers are in tight supply

Transitions:
Cucumbers are in transition to the Mid-West.

The cucumber market continues to be steady. Cucumbers are currently being harvested in Sonora, Mexico, and Baja California. Crop from Sonora is expected to finish up by next week. Quality from Sonora continues to be good. Good supplies of cucumber being produced by the Baja district. All sizes and styles currently being packed. Quality from Baja is also good. Mexican cucumbers are also crossing and available to load in McAllen.

Eggplant supply is starting to dry up, volume in Georgia is starting to wind down and North Carolina is just starting. Quality in Georgia is slipping with all the heat. The self-life has been reduced but some growers will continue to ship through the month. North Carolina does not plant a large acreage of eggplant, and the next large growing region will be New Jersey in late July. Eggplant pricing has been depressed for the last few weeks but is showing signs of improvement.

Transitions:
Eggplant is transitioning to North Carolina.

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 to continue for about 1 more 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 in about 1 week. Very light supplies of eggplant also being harvested in the Coachella Valley.

Green grapes supplies remain in excellent shape. Quality is excellent. Plenty of promotional opportunities in all areas. Demand is down this week due to the holiday and shippers are looking for orders. Mexican grapes loading in Nogales are the most aggressively priced, but there are lower prices in Coachella as well. We expect Mexican production to last another 2-3 weeks before tapering off. Coachella will overlap with new domestic harvest out of the Central Valley. Growers will start next week with light numbers and gradually build momentum. We expect markets on the new fruit to be higher at first and level off as we move forward.

Alerts:
Markets are lower and demand is lighter due to the holiday. Aggressive opportunities are available.

Transitions:
California Central Valley production will start next week with light volume.

Red grape supplies continue to be excellent this week. Quality is very nice. Demand has tapered off because of the holiday. Shippers are looking for business in both production regions. Mexican grapes loading in Nogales are being offered at aggressive prices with plenty of volume opportunities. We expect Mexico to continue with production for the next 2-3 weeks. Coachella is steady with lower prices this week. We will see an overlap with the new harvest starting next week. The Central Valley will begin production with red grapes next week. Volume will be light and we expect prices to be higher at first. However, volume will increase and prices will level out as we move forward.

Alerts:
Demand is down, Markets are lower. Shippers are looking for volume deals.

Transitions:
California Central Valley is starting next week with red grape production.

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.

Supplies continue to be on the light side and this will continue for the entire week. Escalated pricing is in effect on value-added items. Demand continues to exceed supplies. Shippers continue to watch contract averages very closely. The weather has been very favorable to growing conditions. The quality has been much better compared to previous weeks. Minor defects include puffiness, mechanical, and insect damage. The weights on wrap have picked up, averaging thirty- nine to forty-three pounds. With the holiday coming up, expect shipping to slow down towards the end of the week. Next week pricing is expected to be softer.

Alerts:
Light supplies with this commodity thru the week with all shippers. Escalated pricing is in effect.

The romaine market has remained steady with some shippers while others have come off. Romaine hearts will be light in availability all week. Green leaf is the most active and red leaf supplies have tightened up as well. Escalated pricing is in effect on romaine and green leaf items. The quality has picked up compared to past weeks. Minor defects include mechanical, insects, and some discoloration, but minimally. Overall, multiple shippers are reporting good quality overall. The weights on romaine are averaging 33-38 pounds and green and red leaf range from 22-25 pounds.

Alerts:
Market is softer on carton romaine, although romaine hearts will be tight all week.

Tender Leaf market has started to adjust downward 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.

We are seeing temps hit the 90's to low 100's in the San Joaquin Valley. These are prime growing temps for melons. The fruit has started ramping up and seeing a steady supply on smaller fruit with opportunity buys available. New crop fruit is showing excellent internal and external quality. Most growers are running ESL (extended shelf life) and LSL long shelf life) varieties. Those varieties seem to be their bread and butter as they travel well, eat great, and have an amazing shelf life. Production in the desert is running strong with a good supply of all sizes. The harvest will start to taper off soon and done for the season in a few weeks. Overall quality has been solid.

The San Joaquin Valley has started up with very light offerings this week but with these warm temps, production will ramp up expecting better volume next week. We are currently overlapping with the desert still producing fruit. We will see the desert run for another few weeks.

Moderate 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. Moderate supplies of seedless watermelon will continue to be available to load out of Nogales, AZ through the week. The seedless watermelon market remains low as summer demand continues to be light.

Demand is slowing down as the 4th of July pull winds down. Supplies in California are beginning to show improvement but still seeing most of the demand with transportation difficult to locate out of New Mexico. Markets in New Mexico remain high with limited supplies on yellow and white onions. Red onions are in much better supply for both regions. Winter-over onions in Washington have started with a good supply of yellow available in Pasco, WA. Walla Walla sweets are also available out of Burbank, WA. Expect to see declining markets as we head into next week.

Alerts:
Onion markets to decline week of July 8. Winter-over yellow and Walla Walla sweets available in Washington.

Washington:
Much like the apples, the pear market is also firming up. With availability limited to Green and Red D’Anjou, 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). Many shippers only have ½ carton (Euro packs) available on Red Anjou pears.

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

California:
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.

We received reports from our pineapple suppliers of a strike in Costa Rica, where a majority of our pineapples are sourced from. We are still waiting for more information from growers and shipping lines to determine the reaching effects of the protests and strikes in Costa Rica that began the end of last week. Truckers set up blockades on major roads throughout Costa Rica protesting a new value-added tax which went into effect yesterday. Complicating matters further, students throughout the country added additional blockades to protest new policies implemented by the Education Ministry which further clogged the roads and highways completely impeding traffic. These blockades and protests have yet to be disbanded. Without any immediate resolution and containers blocked from entering the ports, shipping lines were forced to leave Costa Rica without loading their containers. We hope to have more information regarding possible resolutions as the day and week progresses but the strike and blockades could continue for several days. If this continues this will affect supplies industry-wide by the week of the 15th, we’ll take it day to day on updates.

Markets on 70 count and larger continue to inch up as we move into July. 80 count and 90 count Idaho russets are also showing a little bit of strength due to some added demand. Expect to see these sizes continue to inch up throughout the month as suppliers begin to scale back in an attempt to stretch out the storage Burbank season until new crop harvest starts in August. There have been isolated issues of shoulder bruise and occasional hollow heart. Washington and Colorado continue to ship out Norkotahs with increasing prices on the larger counts as well. Wisconsin markets are growing across the board, and quality is fair. It is recommended to give ample lead time over the next 6 weeks to ensure order coverage.

Alerts:
40-70 count potato supplies tightening up. Markets on the rise. Advanced orders needed.

Peak Seasons:
Idaho Burbank storage crop will wind down over the next 4-6 weeks.

Color potatoes remain limited as demand exceeds supply. California (Bakersfield) is the main source of supply for red, yellow, and white potatoes. Size B reds are limited as well as creamers for all three colors. Arizona is nearly finished and only covering contracts and previous commitments. North Carolina has a very limited supply with Virginia producing a few red potatoes. Yellow and white potatoes are expected to start next week. Stockton, CA and Texas are looking to start up over the next couple of weeks with Minnesota and Wisconsin coming up in August. Markets will remain volatile for the month of July.

Alerts:
Color potato supplies limited. Markets remain active; in particular B reds and size C for all colors.

Transitions:
North Carolina and Virginia starting new crop. Stockton, CA and Texas to begin over the next couple of weeks.

Squash supplies are coming from numerous places but at the moment none of them have a large supply. Western North Carolina, Virginia, New Jersey and Pennsylvania are shipping steady supplies of good product. Ohio, Indiana, and Michigan have started light supplies with very good quality. After the 4th of July, volume in the mid-west will go up and more local deals in New England will start. Temperatures in the mid-west and New England have gotten much warmer and product will be growing at a faster rate.

Transitions:
Squash is in Transition to Michigan, Ohio and the Northeast.

Both Italian and yellow straight-neck squash continue to be harvested in Santa Maria, Fresno, and Baja California. Better supplies on Italian squash than Yellow S/N from all three districts. The market on soft squash has stabilized with better supplies in the growing region. Quality from Santa Maria, Fresno, and Baja California is good on Italian squash and continues to be fair on Yellow S/N. Better quality is expected on yellow s/n as growers are transitioning to new fields.

As a whole, we continue to see good availability on all stone fruit. As the season progresses and growers transition in and out of new varieties, very large or very small sizes may be limited. However, for the most widely used Tray Pack (48-56ct) and Volume Fill (60-70ct) sizes, we are in good shape. Quality has been excellent and demand has been lighter than normal. Peaches, Nectarines, Plums, Apricots and now Pluots are available. Market prices vary slightly from shipper to shipper, but have remained fairly flat as we are in the peak of the season. We expect to see good availability and promotional opportunities through the summer and early fall.

Peak Seasons:
We are currently in the peak of the season on all domestic stone fruit. We expect good supplies through summer and early fall.

As anticipated, eastern supply has contracted while operations begin to transition to regional summer farms. Quincy Florida and South Georgia will finish production this week. South Carolina is nearly finished and harvesting what second picks are available. Tennessee farms are beginning to scratch the surface and will begin building volume after the holiday. Next week operations in Alabama, North Carolina, and Virginia will all begin harvesting to help the overall supply in the east. The round market has strengthened in the short term as usual for this time of year. Roma tomatoes are limited to none but anticipated to improve with more operations coming to market by mid month. Production will start to expand next week as the regional programs mentioned become a factor. Grape tomato size is improving, moving past the larger sized fruit harvested in previous weeks. Weather continues to produce some challenges, but the pack-outs are favorably helping to ease the pressure of an upward market. During transition to regional programs, western supply becomes more of a factor, however it is yet to be determined how subtle or drastic the 17.56% Mexico duty set by the US Dept of Commerce for tomato imports will affect the dynamic of the market in the weeks ahead.

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 and has not yet come into heavy supply but already proving to be the better value in the market. Tomatoes remain in the low to mid double digits as typical for this time of year. 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. Duties are set 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 keep prices low in order 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.