The Source - June 5, 2019

Eastern Region:
Although the apple market remains steady, many shippers are looking to clean out their remaining, minimal inventories over the next few weeks. Most are redirecting their focus to stone fruit, cherries, etc. Prices have softened and most of the demand has shifted to the northwest.

Washington:
The overall market is steady, but we are noticing a ‘softening’ of prices across the board. Smaller fruit (125ct and smaller) continues to be a challenge with regard to availability. Retail demand has eased with their transition to stone fruit, cherries, etc. We are seeing a decrease in volume as schools begin closing their doors for the summer.

Shippers are dealing on larger fruit (100ct and larger), so please continue to look for ‘Spot Buy’ emails or call in and let’s talk about it. Also adding to injury, for shippers, is the absence of export business to India/Mexico. With the continuous tariff scares, the volume is way down for the season.

Continue to send Apple and Pear orders early. The more time shippers have to pack the product (before load dates), the better chance we have of receiving the requested product. It is essential that some size/grade/variety substitutions be allowed (especially on smaller sizes).

New harvest Chilean (FOB-L.A.):
Chilean Granny Smith – 80ct XFCY (available now)
Chilean Braeburn – 70-90ct XFCY (available now)
Chilean Pink Lady – 70-90ct (available next week)

Central Mexico (Guanajuato) has started with much better volume this week, and volume should ramp up by next week. Volume on the bigger sizes out of this region remain low. Domestic volumes from all regions are unchanged. Peruvian volumes are about the same from the North, and are lower in the South. Bigger sizing from all regions in Peru are low due to seasonality, and weather. Markets on both coast are lower overall due to all regions having good volume.

Strong demand for California fruit. Volume has increased with shippers chasing quality fruit for retail programs. The fruit is looking great externally and internally. Pricing remains in step with Mexican fruit.
Peruvian arrivals have been well received providing some relief on the market with Mexico winding down and a short California crop.

Prices remain strong as Michoacan's current crop harvest begins to taper off for the season. We have seen a decline in demand these last few weeks. Late season fruit is looking rough externally but eat very well. Keep in mind this fruit has been on the trees all season long and exposed to mother nature. Smaller fruit will be limited for the month of June (60s-84s) and the beginning of July. On larger fruit, we are seeing better supplies (48s-32s) on this late-season crop. Organic fruit will remain tight for the next few months. We should see some relief come late July, early August. New crop Flora Loca crop is expected to ramp up mid-July.

Green Bell Pepper supply is good, peppers are being harvested in Florida and Georgia. Florida is having quality issues and growers are winding down for the season this week. Georgia is harvesting good volume of good quality pepper, but the heat for the past 5 days has been extreme. This heat will have an effect on future supply, pepper plant stress easily and will stop producing under the current conditions. The market has been declining over the past week but if the heat holds up that could change quickly.

Alerts:
Extreme heat and pepper supply will be a lot less.

Green Bell Pepper- Green bell pepper from Sonora and Sinaloa have finished for the season. Good supplies of green bell pepper being harvested in Thermal, CA. Both retail ang choice grade being packed. Quality of green bell pepper from this district is good. Green bell pepper supply currently meets demand. Market on choice green bell is Low/Steady while retail grade is steady. Green bell pepper from Mexico is also available to load in McAllen, TX.
Red Bell Pepper- Light supplies of Red bell pepper continue to arrive in Nogales from Mexico this week. The quality from Mexico is fair to good. Mostly choice grade being packed from this district. The market on red bell pepper has maintained in the high teens as red bell production has started in Thermal, CA. Retail and choice grade being pack from this district. Quality out of Thermal is good. Steady production expected in Thermal through the week. Light supplies of Red hothouse bell pepper also being harvested in Baja California. Red bell pepper also available to load in McAllen, TX.
Yellow Bell Pepper- Light supplies of Yellow Bell pepper still arriving in Nogales from Mexico. Hot House variety is mostly being packed in choice grade. Yellow bell pepper demand has decreased and currently meets supply. Market on yellow bell is steady. Coachella has started to harvest supplies of yellow bell and should remain steady through the week. Yellow Hot House bells are also available to load in McAllen, TX.

Shippers whose crops on the West Coast have not yet begun to yield sufficient numbers are struggling to meet demand. The rapid decline in Mexican imports due to rains ending the season early has left them looking at a 2 week gap in production. A few companies had already planned ahead of time to be out of Mexico by mid-May anyway and will not be caught short. Look for the market to move a little higher out West. Quality is reported as good. There are also loading options in The Homerville and Alma Georgia areas on the blackberries. Quality is fair.

Mexican production on this item is beginning to decline sharply. Emphasis is turning towards West Coast production which is beginning to peak with good volume in the Central Valley and farther West in Santa Maria in a smaller way. The North West product should be starting approximately the third week of June. Quality has been good out West with the Mexican product looking a little more tired as those numbers steadily decline.

West Coast production has begun to produce some decent numbers out of the Salinas/ Watsonville area and also in the Santa Maria area. There are still a few Mexican raspberries crossing but the numbers are dwindling. Quality has been good out of either area. Markets are fairly firm. Look for the market to remain fairly firm through the end of the week.

The Salinas/ Watsonville areas continue to have cooler weather than is the norm for this time of year consequently growers are reporting lower than projected yields. Most shippers are firm in their pricing. Numbers should begin to pick up towards the end of this week as we see warmer temperatures develop. Quality is much improved as shippers have already moved past fruit affected by the rain events in mid-May. It is the general consensus amongst growers that given a few days of warmer weather the plants will respond and numbers could jump dramatically. Santa Maria is still producing good numbers and has also been cooler than usual for this time of year. Their quality is good although the fruit in the North is still a little stronger overall. Look for markets to ease on the weekend and into next week.

The broccoli market has leveled out as there continues to be a steady supply in the pipeline. The gaps we've experienced recently have closed a bit in Salinas. Look for supplies to be more available going into next week. Quality is good with slight purpling, some mechanical damage, and occasional yellow cast.

The Brussels Sprout market has started to come off as rain gaps are closing and with a little more supply in the pipeline. 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 continue to adjust 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.

The cauliflower market continues to come off as rain gaps have closed and with fields producing better yields. Supplies are getting better and the heads are starting to size up. 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 exceed supplies and this will continue for the rest of the week. The market is firm with this commodity. With that being said, Production should start in Salinas with a few suppliers next week and more to produce the following week. This should help to better meet demand. Slower summer business will help shippers to catch up with demand as well. Harvesting in Santa Maria and Oxnard has been better this week compared to previous weeks. Production in Mexico is light due to inconsistent weather patterns. Some common issues continue such as seeder, leafy tops and mechanical.

Transitions:
Salinas will begin production next week.

California cherry season is practically done. Due to the rain, most crops were wiped out. The little fruit that is being sold is to cover previous commitments. We will look to new harvest from the Pacific Northwest to start in a very light way next week. Due to the current market conditions, I expect prices to remain very escalated until supplies ramp up. Quality is expected to be strong on new harvest.

Alerts:
California season is done and we will look to new harvest to start next week.

Transitions:
Washington state will start harvest with light volume next week.

Jalapenos- Moderate supply of Jalapeno still available to load in Nogales, AZ from Mexico. Jalapeno is being harvested from the Mexican state of Sonora where the quality is good. Mostly medium to large size are available from the Sonora region. Market on jalapeno has maintained in the mid-teens. Jalapenos from Mexico are also available to load in McAllen, Texas.
Pasilla- Light supply of Pasilla peppers available to load in Nogales, AZ from Mexico. Light volume is expected to continue through the week. Quality on Pasilla is fair to good. Size on the pepper is mostly medium to Large. Market on Pasilla is low/steady. Pasilla crossing through Nogales is being harvested in Sonora. Pasilla from Mexico also available to load in McAllen, Texas
Anaheim- Moderate supply of Anaheim available to load in Nogales, AZ from Sonora, Mexico. Moderate Anaheim production expected to continue through the week. Quality of peppers from Sonora is fair to good with mostly medium size. Anaheim continues to be harvested in Sonora, Mexico. Anaheim from Mexico also available to load in McAllen, Texas.
Serrano – Moderate supplies of Serrano peppers available to load in Nogales, 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 Nogales, 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 are also available to load in McAllen, TX.

The cilantro market continues to remain steady in Mexico with the recent warm weather and now production has started in Salinas. The cilantro quality is good with an occasional yellow leaf. Look for the cilantro market to continue to stay steady going into next week.

Lemon supplies continue to remain tight on 165’s and smaller, during the first part of June expect limited availability until we’re able to offset orders with offshore lemons which looking to be towards the end of the month. Market prices continue to climb weekly, looking at the low to mid $30’s on choice and fancy fruit. Lemons supplies continue to peak on the large sizes 75ct/95ct/115ct.

Limes supplies continue to improve weekly, we’re seeing more crossings from the border and more shippers are quoting open market fruit. 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 in the high $20’s/low 30$’s.

Late season navels are still in full swing heading into June, we’re looking at another three weeks until we fully transition to Valencia’s. Foodservice size 113’s and smaller will remain snug on navels and Valencia’s. We have plenty of volume and opportunities on 88’s and larger. Markets on both varieties will be in the $14-$16 range depending on grade and size. On Specialty Citrus, the Delite Mandarins are starting to dwindle down on supplies. Cara Caras have a few more weeks left. Bloods & Golden Nuggets will go through June, early July. Ojai Pixie Tangerines quality is looking great and the taste is excellent. Please reach out for pricing.

Cucumber supplies are coming mainly from Georgia with a few still being harvested in Florida and the Carolina's are starting light volume this week. Georgia has been producing good quality so far this season from most shippers, volume is declining mainly because of extreme heat. Movement is very good especially on #1 supers and carton 24's, #2 product is also starting to move better, we expect pricing to rise for the weekend. North Carolina is starting this week in what is traditionally a short and fast season. There are only a few growers in the eastern part of the state that come in with a big splash and then quit as soon as their pepper crop starts.

Light supplies of cucumbers are continuing to cross through Nogales, AZ from Sonora, MX. Mostly plain being packed. Cucumber volume continues to be low from Sonora due to the sluggish cucumber market. Quality out of Sonora growing district is still good. The cucumber market is increasing and could remain high due to crop from Sonora finishing up and cucumber crossing into McAllen is delayed. Mexican cucumbers are available to load in San Diego from the Baja growing district where the quality is also good.

Eggplant supplies are very tight. Plant city is shipping steady volume but shippers are over their peak volume. Georgia is starting light volume this week with a few shippers but volume will not start until late next week. Quality has been good in both regions and eggplant are the one item that likes the high temperatures.

Light supplies of eggplant continue to arrive from the Mexican State of Sinaloa. More choice grade eggplant than fancy arriving from this district. The eggplant crop from Sinaloa is expected to finish this week. Light supplies of eggplant also being harvested in Thermal, CA. Mostly 12ct and 16ct being packed. Eggplant supplies from Thermal are expected to increase. Eggplant market is currently high/steady due to limited supplies. Quality from Sinaloa is mostly fair to good. Eggplant quality from California is good.

This week green grape supplies have taken the lead. Most of the fruit is being produced in Mexico, with light harvest starting in Coachella. Yields have improved as well as quality and sugar levels. We saw the market drop this week with the additional volume coming into the market. With more fruit expected in Coachella, we can expect to see lower steady markets moving forward. We will have options to load in Nogales and Coachella with light volume in Los Angeles. There will be additional costs to transfer to LA. We anticipate a good summer season with plenty of promotional opportunities.

Transitions:
Coachella harvest will continue to ramp up as we move forward. Mexico harvest has increased and will remain steady.

This week was a bit of role reversal between red and green grapes. The volume on green grapes has now surpassed that of red. However, with the additional harvest coming from Coachella, we expect this to be very short lived. Mexico will continue with consistent harvest moving forward and Coachella will continue to ramp up. We will have the option to load in Nogales, Coachella and light supplies in Los Angeles. There is an additional cost to transfer fruit to LA. Market prices have been fairly firm with Coachella fruit, but slowly coming down on Mexican. Quality is solid from all areas.

Transitions:
Coachella is slowly ramping up harvest. Mexico is steady.

Green Onions 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 remain plentiful. Quality is good with full bunches, and only an occasional yellow leaf being reported.

This market has turned around completely. Multiple shippers were sold out of this commodity and supplies are expected to be light for the next seven to ten days. Demand exceeds supplies and this will continue for the rest of the week. A planting gap is upon us. The quality is average with some shippers while others are a little stronger. Some common defects being reported to include misshapen heads, insect damage, puffiness, discoloration, and mechanical. The weights on liner product have been reported at 40-44 pounds.

Romaine has been less in availability with a few suppliers while others remained steady. The market on this commodity is expected to get stronger by the end of the week but demand will dictate the outcome. Currently, supplies are moderate. There has been no rain in the growing regions and this will continue for the entire week. There have been a few issues on romaine such as fringe burn, mechanical, and insect damage. Green and red leaf, as well as butter, have also shown these defects as well. The weights on romaine are averaging 34-37 pounds while green and red leaf has been 22-26 pounds.

The Tender Leaf market continues to stay steady on spring mix, arugula, baby spinach, and cello spinach. Quality is good with minimal yellowing and bruising of the tender leaves. Look for these items to be steady going into next week.

Market remains active as offshore and Mexican fruit is done for the season. Production out of the desert is expected to increase with warmer weather in the forecast. We are seeing temps in the 90s/100s, which is optimal growing temps for melons. Domestic fruit is looking good internally and externally showing brix levels in the range of 12-16%. Light offerings out of Brawely California with great quality fruit.
Mixed melons in the Yuma area have been hit with the Whitefly and lost some fruit. Varieties affected are the Juan Canary and Orange Flesh. Blythe will hopefully start harvesting mixed melons around the 10th.

Domestic production is increasing. We are seeing warmer temps in the desert. Mostly larger fruit with very light offerings on small fruit. Growers have to wait for fruit to hit a good brix/sugar level. By the time it hits the required brix level, the fruit has only gotten larger. Supplies remain steady even with offshore completely out of the picture. Mexico is producing solid fruit internally and externally. Domestic fruit has some external scarring due to high winds in the desert.

Good supplies of watermelon still available to load in Nogales, AZ. Mostly 2/3 bins being packed. Quality of watermelon crop from Sonora, MX is mostly fair. Good supplies of seedless watermelon continue to be able to load out of Nogales, AZ through the week. The seedless watermelon market is low as summer demand has decreased.

Texas (Uvalde) and the California desert have minimal supplies left with sporadic sizing and colors left. South Texas has finished for the season. New Mexico has started and markets are rising as demand is shifting to this region for new crop supplies. California Valley is starting in a light way this week. Yellow onions are beginning to ship with red and white to follow by the end of the week: most suppliers will start up in full next week. Markets are active as demand is high. Expect markets to continue to rise through next week as we transition into the new growing regions.

The pear market remains steady with prices beginning to come down. Foodservice sizes (110ct and smaller) continue to be difficult to supply and are in few hands. GREEN BOSC PEARS ARE DONE; Green D’Anjou’s should be available through July, but be flexible on subbing sizes.

Half carton Red Anjou pears are the prevalent pack – for most shippers – this time of year (30s through 55s) and are available through mid-June.

Chilean and Argentinean Bartlett pears are available and loading in Los Angeles. Also, Chilean Packems (70-120ct) are available to load with Bartletts.

California Bartlett pears are expected to start the week of July 8 (specifically, the 10th-15th). Calif. Bosc is expected to start 3-4 weeks after CA Barts (week of Aug 5th or 12th).

Pineapples supplies are looking steady. Quality has been solid with a nice brix to add. As we head in June supplies looking to be good until last week supplies are looking to get snug until early September. This is due to yields coming on earlier than expected during the months of May and June. Markets remain steady $12-$14 depending on the size.

Larger size Idaho russet potato markets continue to rise on the larger size 40-70 count as Burbank profile leans to the smaller sizes. 80 count has also inched up with an increase in demand. Consumer business remains good as we approach the Father's Day holiday. Quality on Burbank's is good with the exception of a few lots showing some shoulder bruise and occasional hollow heart. Washington, Colorado, and Wisconsin continue to run Norkotah's. Markets for larger sizes are also on the rise due to higher demand. Wisconsin quality remains fair. Advanced orders for large size potatoes out of Idaho are necessary to ensure full coverage. Expect rising markets on larger size 40 - 70 count through the summer months until new crop harvest begins in August.

Color potato markets continue to climb upwards as supplies are lighter, in particular yellow. Idaho has limited supplies of red and yellow left for the remainder of the storage season with sporadic sizing available. California is producing all three colors out of the Bakersfield region for the month of June. Markets are rising with the increase in demand. Stockton, CA will start mid-July and run through August. Eloy, AZ is running red and yellow through the month of June with good supply and quality; prices are rising with increasing demand. Florida is running all three colors in the Hastings area but winding down for the season. Yellow potatoes in Florida are very limited and expected to finish in the next couple of weeks. Texas is expected to start early July followed by Minnesota and Wisconsin early August.

Squash is in good supply with light supplies in central Florida, good supply in Georgia and the Carolina's and Virginia starting steady volume. Extreme heat will hurt supplies in the southeast, plants will stop producing with the kind of temperatures the region has received over the last 5 days and the forecast does not have any real relief this week. Quality on zucchini has been good for the most part, yellow squash has had a few issues with scaring and discoloration. The heat is also hurting the shelf life on yellow squash.

Light supplies of Italian squash continue to cross through Nogales, AZ from Sonora, Mexico. The Italian crop from Sonora is mostly #2 quality on both fancy and medium size. Squash from this district should finish up this week. Both Italian and yellow straight-neck squash are being harvested in Santa Maria and Baja California. Market on soft squash has increased due to cooler temperatures in the growing region. Quality from Santa Maria and Baja California is good.

California stone fruit season is picking up the pace and shippers are looking to promote. All varieties are now available, including red and black plums. Although the plum volume is still light, it is expected to pick up quickly. Both yellow and white peaches and nectarines are in full swing. All pack styles and sizes are available with good volumes expected moving forward. Quality on all fruit is excellent. The warmer weather will help with increased sugar levels. Market prices have gradually been declining on peaches and nectarines, with some aggressive opportunities on smaller volume fill packs. Pluots are expected to start by the end of June.

Alerts:
Plenty of promotional opportunities.

Palmetto and Ruskin growing operations are wrapping up for the season causing supply to dip in the east this week as crops transition further North. South Carolina has begun picking to help bridge the short gap in Florida production until Quincy can begin harvesting decent volume next week. Recent temperatures in Florida have been in the mid-nineties and recent rains are casing quality concerns with scarring, some softness and less travel legs mixed throughout pieces in transit. Because of both factors, the round tomato market in the east has strengthen by a couple of dollars over the weekend. Roma tomatoes will follow suite and be limited over the next 5 to 6 weeks through the Quincy season due to the limited acreage planted. Poor growing conditions have limited the pack outs and has affected the quality of Grape and Cherry Tomatoes diminishing the supply in the market. As transition progresses to smaller programs in the North, western supply becomes more of a factor, however it is yet to be determined how subtle, or drastic, the recent tariffs will affect the dynamic of the market.

Mexico tomato prices continue to fluctuate slightly while growing regions transition. New crops in Eastern Mexico and Baja are underway and have begun to strengthen the number of crossings into the US. The current increase of round tomatoes in the west through June will mostly be Vine Ripe varieties with very limited Mature Greens until California’s Central Valley breaks ground near July. Amidst economical penalties, there has been no significant change in prices from last week outside of the typical swings of transition. Tomatoes have strengthened by a dollar or two from last week settling in the low double digits as typical for this time of year. Roma tomatoes have entered the $10 range of FOB prices as they become more difficult to source in the East. Hot weather is causing some puffiness in fruit but there is plenty of good product to be sourced. Mainland Mexico is slowly improving Grape tomato harvests while Baja produces better quality this week. 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 down the line, maybe even more so now since the new Tariff has been introduced, beginning next week.

Alerts:
The United States has announced a new tariff that is to be imposed on Mexico for ALL imports beginning June 10th. The tariff was announced, based on the belief that Mexico is not doing enough to slow the flow of immigrants from South America coming to the US that must pass through nation of Mexico. The tariff has been established on a sliding scale beginning June 10th at 5% for all items imported to the US, and then then grow to 10% by July 10th, 15% by August 10th, 20% by September 10th, reaching a permanent cap of 25% by October 10th. The Tariff is in addition to the 17.56% duty the Department of Commerce has set forth for all tomato imports since the withdraw of the Suspension Agreement in early May. Beginning next week, both penalties’ will be reflected in the cost of fresh tomatoes purchased and imported into the United states from Mexico, directly affecting the landscape of the marketplace in the coming weeks and months until resolutions between the two countries can be made.