The Source - June 26, 2019

Washington:
As we make our way through the summer months, expect to certain sizes and grades slowly become less available with shippers. Golden Delicious has become extremely tight and Granny Smith are also trending in that direction, especially on smaller sizes. Some shippers are buying from those who have inventory just to cover orders. As we make our way through June/July, we will continue to see this trend on other varieties like Gala and Fuji.

For many shippers, ‘Spot Buy’ opportunities are non-existent due to their need to extend inventories through to the start of fresh harvest (August). The need to send Apple/Pear orders earlier becomes more important as each week passes. Shippers need some time to pack the product and source the product they do not have in order to limit the number of pickups. Flexibility on subbing size/grade/variety is essential (especially on smaller sizes).

California (FOB-L.A.):
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.)

Not much change from last week. Central Mexico (Guanajuato) is still producing good volume out of that region. Volume on Jumbo and Large sizes is still lower than expected and should increase in the next couple of weeks. Domestic supply is pretty much done as they conclude their season. Peruvian supply remains steady out of the North, Southern Peru has started to shut down fields due to seasonality. Big sizes out of Peru is still an issue due to cooler temps. Markets out East remain steady as markets out west have jumped due to less domestic supply and more demand.

The harvest remains strong this week. With Mexico producing a lot less volume, some suppliers are pulling California fruit and shipping it to Texas to cover business. With so much pressure being put on California fruit, the season will end sooner that projected. Fruit will be available through mid-July and taper off by the end of the month.

Volume continues to decrease on this current crop in Mexico. The industry is in a demand exceeds supply situation. There is little to no fruit to be had, especially on smaller sized fruit (60's/70's). On the new crop fruit (Flora Loca crop) some growers have been authorized to start harvesting due to fruit meeting the dry matter standards. There are very few growers harvesting this new crop and they are trying to control the market as long as they can. New crop fruit is projected to have a size curve from 48's and smaller. We are also going to see better volume/offerings on #1 grade fruit once production is in full swing. Peruvian fruit has provided relief for both east and west.

Supplies of green bell pepper are coming from Georgia, South Carolina and North Carolina. Each region has good volume, Georgia is winding down, with all the heat the region has received over the past two months yields have gone down and a higher percentage of choice and mixed red pepper are being packed. South Carolina has just gotten over their peak, they are still packing good pepper but also are packing smaller sizes. North Carolina is just getting started on steady volume of mostly jumbo pepper. New Jersey will start mid-July, the mid-west states are 10 days to 2 weeks late because of a cold wet spring.

Transitions:
Bell Pepper is in Transition from Georgia to North Carolina.

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 pepper from Mexico is 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. The market has strengthened with prices escalating from limited supplies and increased demand. More choice grade than a 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 pepper 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.

This item remains in light supplies out West although there are other loading options available in GA, NC, and Fl. Look for the market to remain firm at the on 6oz blacks out West with possible temporary shortages going into this weekend. Better availability will exist loading east until numbers pick up in California.

Central California is winding down this week with some availability coming out of the Stockton CA area as well. Availability out west is spotty. Markets are fairly firm on the 6oz pack style. We are preparing to move to the Northwest on blues as early as next week. There are also blues crossing in from Mexico as well as alternatives in North Carolina and New Jersey. Quality has been good out of all areas.

Raspberries continue to be in just adequate supplies coming out of the West Coast with some Mexican fruit being transferred to bolster light local supplies. The market remains firm. Load volume is not available and shippers are filling pallet quantities only with the other mixed berries. Quality has been good

California growing areas both north and south are experiencing very light supplies due to significantly lower field estimates for the second straight week. With good demand existing as we move into the upcoming 4th of July holiday pull period, expect markets to remain firm in Salinas, Watsonville and Santa Maria. Quality has been hit or miss depending on what varieties are being used. Some of the more sensitive proprietary plants are still seeing problems from previous weather events and you can expect bruising and other issues in the pack. The heartier nonproprietary varieties that are widely used in the industry are cleaning up nicely although some minor defects are still present there as well.

The broccoli market has started to come off 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 come off as rain gaps are closing and a little more supply is in the pipeline. The recent warm weather has brought on yields. The quality has been impacted by rain and cold weather with sizing tends to run smaller due to colder weather. Look for the Brussels sprouts market to continue to adjust going into next week.

The California carrot market remains steady with the exception of the rainbow varieties which are gapping at this point in time. Mexico is experiencing rain-induced supply gap on Jumbo carrots and the market has risen steadily since Monday. Look for the jumbo market out of Mexico crossing into Texas to stay firm through the weekend.

Alerts:
Jumbo carrot market much higher out of Mexico

The cauliflower market continues to adjust downward with the recent warm weather in the Salinas Valley. Yields have improved since the heat wave a couple of weeks. 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 still commands a high price for this commodity, but with this being said, the market is softer. Production in Salinas has picked up. Production in Oxnard/Santa Maria is moderate at best. The lack of school business has eased demand. According to multiple shippers, production is expected to be steady over the next few weeks. Demand is average at best. Long stock celery used in bin production will be held to averages. Regular sizes, twenty four to thirty six counts, in particular, will have better availability. Some defects being reported to include mechanical, leafy tops and bowing. These defects are minimal however and the overall quality is good.

Washington

Over the past week and into the current week, most shippers are packing Bing variety and are approximately 25%-30% short on their anticipated forecasts. Fourth of July retail ads are in full swing and weather has not been accommodating with cooler days (highs in the low 70s) and colder nights (low in the mid 40s). On top of that, isolated thunderstorms, which bring unwanted showers, are forecasted for the next 1-2 days. Although the thunderstorms are isolated and will pass through quickly, any water left on the cherry will be absorbed, causing expansion and splitting of the skin.

Jalapenos- Moderate supply of Jalapeno still available to load in Los Angeles from Mexico. Jalapeno is being harvested in Baja California where the quality is good. Mostly medium to large size are available from this region. Market on jalapeno 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. 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 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 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. 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 reacted to the recent heat wave and gone up due to lower yields. The cilantro quality is fair with an occasional yellow leaf. Look for the cilantro market to be volatile going into next week.

No real change on the lemon supplies. Markets continue to remain tight on 140’s and smaller. Expect market prices continue to climb weekly, looking at mid $30’s on choice and fancy fruit. Shippers are doing their very best to improve quality and extend shelf life. Therefore, to be cautious, faster rotation of inventories is recommended.

Limes supplies continue to improve weekly, we’re seeing more crossings from the border. Plenty of promotional opportunities coming up for 4th of July pull. Supplies continue to peak on the 175’s and smaller, with markets in the low teens to single digits. Supplies continue to remain light on large sizes 110’s – 150’s, markets are in the mid to low teens.

Late season Navels are at the tail end of the season, majority of suppliers have transitioned to Valencia’s. The Valencia supplies continue to improve weekly, especially on the 113’s and smaller. Markets on both varieties are in the $15-$17 range depending on grade and size. Quality is looking great! 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.

A few shippers in Georgia are still packing cucumbers and the quality is not that bad. Virginia and New Jersey are shipping good volume along with other small regions in the mid-Atlantic. There has been a wide range in pricing between number 1 product and select cucumbers. Quality has been good in the mid-Atlantic, the market on selects and cartons is steady at lower prices. Michigan and Ohio will start after the fourth of July.

Transitions:
Cucumbers are Transitioning up the coast, from Georgia to the mid-Atlantic states.

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

There is an over supply of eggplant in Georgia and South Carolina, North Carolina will start by this weekend, the market has been depressed for two weeks. Quality has been good in Georgia, the problem is a lot of shippers are struggling to keep up with supply and product is sitting too long. At these price levels, growers in the southeast will stop harvesting and supplies will start to dry up.

Light supplies of eggplant available to load in Los Angeles. Eggplant is currently being harvested in Bakersfield, CA. Light supplies of eggplant expected to continue for about 2 weeks. 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 2 weeks.

No major changes this week on green grapes. Both Mexico and Coachella are in full production with plenty of availability. Quality has been good in all areas. Sizes have been heavier on the medium-large, but all sizes are available. Demand has been consistent. We are still seeing a split market between both areas. Mexico's production has been heavy and shippers have been getting very aggressive moving volume out of Nogales. Coachella harvest has been steady, but growers are holding their prices firm. For a hot deal, look to load in Nogales for the next 7-10 days. New domestic harvest will start in the California Central Valley by the second week of July. Volumes will be light at first but will ramp up quickly. We expect good availability, quality, and good prices moving forward.

No major changes this week on grape supplies. Red grape supplies continue to be excellent. Quality is very strong out of all areas. Currently, we have Mexico and Coachella in full production. Demand has been steady and market prices have remained flat. There are still some very aggressive deals being made on older or very small fruit, but be aware of the quality. As we look toward July, we expect new harvest to start in the Central Valley by the 8th. We have loading options out of Nogales, Coachella, the Central Valley, and Los Angeles.

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 green onion market will continue to stay steady going into next week.

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

Demand continues to exceed supplies to start the week. Multiple shippers were sold out early and were attempting to purchase with outside label. Contract averages are being watched closely from all suppliers and this will continue throughout the week. Temperatures although not as warm compared to last week, has still been above average in the growing regions both north and south. Lower yields continue to be reported from growers due to the past high temperatures. Expect this market to be active all week. Escalated pricing on contracted commodities as well as value added items will continue all week. Some issues on quality for this commodity include mechanical, puffiness, light weights, growth crack, and insect damage.

The romaine market, as well as all leaf items, continues to be very active in the marketplace. Much of the issue is the same as lettuce. High temperatures in prior week damaged this crop and yields have suffered for all growers. This is an industry-wide issue. Green and red leaf are very active as well. Supplies will be very limited all week both in northern and southern California. The internal burn continues to be the issue. Escalated pricing is in effect. Some issues on the quality that are being reported include mechanical, insect damage, twisting, fringe burn, and discoloration. Romaine hearts are very scarce as well and supplies simply cannot meet demand. The weights on romaine are averaging 32-37 pounds and green and red leaf range from 20-24 pounds.

All Tender Leaf has been affected by the volatile weather in the Salinas Valley. Curly parsley, spinach, and arugula have reacted to the recent hot weather and has remained tight due to lower yields caused by this recent heat wave. Quality is fair with yellowing and bruising of the tender leaves.

Production in the desert will run through mid-July. Mostly large fruit this week (9's, J9's and 12's. Light offerings on small fruit (15's/18's). There are a few growers in California harvesting this week, mostly 9's and jumbo 9's and a few 12's to follow. As the weather gets warmer in the San Joaquin Valley, production will ramp up. Most growers are shipping the LSL and ESL varieties. They hold up better in hot weather, travel well and eat well.

Honeydews in the desert will run into mid-July. Quality has gotten better internally and externally. Small fruit (8's) remains snug this week. Plenty of opportunity buys on large fruit (4's,5's,6's). California fruit will ramp up around the 4th of July.

Good 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 to good. Good supplies of seedless watermelon 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.

Yellow and white onions continue to have limited supply in both New Mexico and California with heavy demand. Red onions are in better shape with stable markets. California Valley yields are lower due to growers culling out issues from rain experienced late spring. Quality issues of mold and staining will be seen in some lots. New Mexico also experienced rain mid-June that created issues of mold and staining as well. Supplies remain limited for yellow and white with the active demand for the 4th of July holiday. Winter-over yellow onions in Washington will start late this week and add some relief to the increasing market. Pending any weather-related issues, we will see a declining market the week of July 8.

The pear market is firming up. With availability limited to Green and Red D’Anjous, there are only a few shippers who have inventory and as we make our way through the summer, that inventory continues to shrink (especially on 120ct and smaller). For most shippers, Half Carton Red Anjou pears (Euro pack) are the prevalent pack for this time of year (30s through 55s) and are available through mid-July.
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 after July 4th—more specifically, the week of 6/15 or 6/22. CALIFORNIA BOSC pears are expected to follow CA Barts—week of Aug 12th.

Pineapple supplies will continue be tight through mid September. This is typical for this time of year due to a condition called Naturally Differentiated Flowering (NDF). NDF occurs when weather patterns of low light or cool temperatures trigger ethylene product of the pineapple plant which leads to a disrupted supply of fruit resulting in lower yields per acre. Typically the summer demand during July – September tends to be soft and the entire industry is forecasted to experience similar supply issues until they improve. Members will be held to their six week averages. To help facilitate orders it is extremely important to place orders well in advance. Suppliers will do their best to help offer sub sizes if they are unable to fulfill orders in full. Markets remain steady $12-$14 depending on the size.

As we begin the decline of the Burbank storage crop, size profile will lean heavy towards 90 count and smaller. Markets are slowly increasing on 40 count through 70 count. Expect this steady increase as we work through the month of July. 80 count will see increased demand and will slowly rise as well once we hit mid-to-late July. Burbank quality remains good with some late storage lots showing occasional shoulder bruise and hollow heart. Washington, Colorado, and Wisconsin continue to ship Norkotah's. Markets in Wisconsin are active as supplies are limited.

Colored potato markets remain active as demand exceeds supply. California (Bakersfield) is the main source for red, yellow, and white potatoes. C size potatoes on all three colors are extremely limited. Arizona is winding down with some yellow available but selling out daily. North Carolina has started some red potatoes and expected to produce white and yellow onions towards the end of this week and bring some relief to this volatile market. Stockton, CA and Texas are expected to start in July followed by Minnesota and Wisconsin in August. Markets will continue to be high as we head into the month of July.

Squash supply is better, product is spread all over the place but no one region has an over supply and pricing has been steady. This time of year logistics are a nightmare with squash being in one location and nothing to go with it. Zucchini supply in better than yellow squash supply, quality is good in most location. Ohio and Michigan have started very light volume and won't have much volume until after the 4th of July.

Transitions:
Squash is in transition from Georgia up the coast to New Jersey.

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 fair on Yellow S/N. Better quality expected on yellow s/n as growers are transitioning to new fields.

Growers are transitioning between varieties on peaches and nectarines and some of the very big or very small fruit has been a little more limited this week. However, the mid-range sizes (50's to 70's) are still plentiful. As we look toward next week, we should once again be in good supplies of all sizes. Apricots and plums continue to be in excellent supplies. Overall, demand seems to be below normal and shippers are still hungry for business. Market prices have leveled off and have remained fairly flat this week. However, there is still plenty of promotional opportunities and volume spot buys. We expect to have excellent availability and quality for the rest of the summer season.

Peak Seasons:
We will continue to be in peak production for the next 6-8 weeks.

As we get ready to turn the page on the calendar, Eastern operations prepare to transition further north in July. There are no major gaps in supply expected but the market has realized a small uptick this week as operations struggle to overlap through transition. Quincy growers are currently wrapping up operations and tomato size, quality, and volume are declining. South Carolina growers will continue harvesting into next week, winding down and finishing by mid-July. Alabama, North Carolina, Tennessee, and Virginia are all forecasted to begin in the next 7 to 10 days helping to boost eastern supply. In the meantime, the round market has strengthened in the short term as usual for this period of time. Roma tomatoes are very limited but forecasted to improve with more operations coming to market next week. Production will start to expand in July as the regional programs mentioned become a factor. Grape tomato size is improving, moving past the larger sized fruit harvested in previous weeks. As weather has improved, so has the packouts helping to ease the pressure of an upward market. As transition progresses 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. Eastern Mexico and Baja are underway and have begun to establish the western market for vine-ripes in the US. In the coming days, California’s Central Valley will become more of a factor in the market as farms begin to ramp up mature green production. Amidst economical penalties, there has been no significant change in prices from last week outside of the incremental influences occurring during transition. 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. It is too soon to determine how both supply and demand will be affected, but it is expected that imports will be reduced at some point in the future.