- February 09, 2011
Bill Armstrong is a self-employed produce broker who operates Armstrong Marketing in Salinas, CA. His column appears here every Wednesday afternoon/Thursday morning. He may be reached by phone at 888/484-0800 or at ArmstrongMarketing@comc ast.net
Yuma, AZ: Daytime highs in the outlying areas of Yuma will remain near 70 degrees through Feb. 10, then climb into the mid- to upper 70s through Feb. 15. Overnight lows will hover near freezing Feb. 9 and 1,0 then rise into the mid-30s to 40 degrees through Feb. 15.
Coachella, CA: Daytime highs will remain near 70 degrees through Feb. 10, then climb into the mid- to upper 70s through Feb. 15. Overnight lows will dip to 30 degrees Feb. 10 and 11, then rise into the mid-30s to 40 degrees through Feb. 15.
Bakersfield, CA: Daytime highs will remain in the upper 50s through Feb. 10, then climb into the mid-60s through Feb. 15. Overnight lows will remain in the mid-30s through Feb. 10, then rise into the low to mid-40s through Feb. 15.
Desert row crop shippers are seeing strong demand on very light volume, Northwest russet shippers are seeing continued strong demand and onion shippers are seeing continued modest demand.
TRANSPORTATION & FUEL
The availability of trucks in California and Arizona is good, and freight rates are steady to lower.
The price of crude oil rose fractionally Feb. 9 to $86.97 per barrel, which is 41 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of Feb. 7 was $3.51, which is 27 percent higher than one year ago. The average price in California for a gallon of diesel is $3.71, which is also 27 percent higher than last year.
ICEBERG LETTUCE The Yuma, Imperial and Coachella valleys were decimated by a hard freeze Feb. 3 and 4. Widespread overnight lows reached 23-27 degrees; a few areas reached as low as 18 degrees. The freeze over New Year's weekend resulted in lettuce ice three to four leaves deep. The freeze the first week in February caused lettuce ice six to eight leaves deep.
Freezing causes blisters to form on the frost-affected areas of Iceberg and Romaine lettuce. These blisters pop and then peel as the plant continues to grow. The epidermal peel discolors and eventually leads to decay. Harvest crews are working at a greatly reduced pace to remove all affected leaves before packing. The result is smaller heads, lighter weights and pale color. Overall quality is diminished, and shelf life is reduced. The effects of the Feb. 3 and 4 freeze are far reaching and will persist through the duration of the desert winter season, which ends in late March.
Shippers said that current yields are down by as much as 60 percent. Upwards of 90 percent of the current harvest is 30-count lettuce. Many shippers are forced to pack 30 heads in a conventional carton or pack 24 heads into a clean-and-trim box.
Receivers should anticipate four things from the early February freeze: quality is weak, shelf life is reduced, prices are very expensive, and these problems will present a significant challenge to the lettuce industry over the next six to seven weeks.
LEAF LETTUCE The Romaine market faces the same headwinds as Iceberg lettuce: quality is weak, shelf life is reduced, prices will be very expensive, and these conditions will persist over the next six to seven weeks.
Green leaf may be a reasonable alternative to Romaine because the leaf is a bit more coarse and less affected by the peel and fungus, and green leaf prices remain considerably lower. Oxnard shippers continue to offer supplies of peel-free Romaine. However, overall supplies are moderate and cannot begin to compensate for the problems in the desert.
BROCCOLI The desert broccoli crop came through the hard three-day freeze relatively unscathed. Current quality is strong, and there are, for the moment, adequate supplies of bunch 14s, crowns and Asian cut crowns.
Broccoli demand is on the rise. One explanation is that buyers are struggling to fill their trucks with lettuce, leaf and celery, and broccoli is one of the few available items. The broccoli market is firming and expected to rise beginning Feb. 10 or 11. Shippers foresee a production gap from Feb. 21 through March 11.
CELERY Oxnard celery shippers continue to feel the negative effects from the relentless holiday storms which produced nearly 12 inches of rain. Growers are currently fighting very light yields and off-quality. Growers are concerned about significant rain gaps in March and April. The market has quickly escalated, and current prices are terribly expensive. Prices will push even higher into the week of Feb. 14. There is no relief in the foreseeable future, and prices will remain terribly expensive for many, many weeks.
STRAWBERRIES A major shipper with operations in Florida, California and Mexico said, "Our production in Mexico will continue to peak into late February. This growing area is 800 miles south of Yuma and dodged the freezing temperatures." Production from Oxnard remains surprising above normal. Florida production is sporadic between thunderstorms. Oxnard will become the primary shipping hub on the West Coast beginning in mid-March. The market will stay fairly steady into the week of Feb. 14.
ONIONS Onions are one of the few items not in a state of chaos. The overall market is fairly stable at current levels and is expected to hold steady into the week of Feb. 14.
The near-term market is displaying temporary weakness caused by a combination of heavy early-season supplies from Mexico, a brief lull in export business and the recent harsh winter weather across much of the nation, which stifled the already light demand.
Export demand has been robust all storage season and is expected to influence the market through March as some of the world's larger onion- producing regions struggle with light crops. Washington state shippers have enjoyed brisk overseas sales, and Ontario, OR, shippers benefit because there is less competition from Washington state for the domestic market.
The stage remains set for an unusually strong medium yellow onion market into the spring. The Wisconsin, Michigan and New York yellow onion crops are undersized and did not produce the usual percentage and tonnage of medium yellow onions. Onion buyers who normally rely on these states for medium yellows during the autumn and winter have been forced to the Northwest for supplies. The Oregon, Idaho, Utah and Washington medium yellow markets are tight, and prices are uncharacteristically higher than jumbos.
RUSSETS Light remaining supplies and a smaller size profile within the Idaho Burbank crop will push prices higher into the spring months. Above-normal demand in February, which is traditionally a slow month, is adding to the bullish outlook.
Idaho shippers will transition out of Norkotahs and into Burbanks as April approaches. This variety shift translates into a smaller size profile and increasing price pressure on the large carton market. An Idaho salesman recently stated, "The large carton market is bullish because the Burbank crop does not have the same size profile as Norkotahs. The overall size profile will decrease in the coming weeks and months, and large carton prices will be pressured higher." Foodservice buyers can expect a widening price gap between large and mid-sized carton counts. The price point will fall between 70s and 80s. Buyers with some degree of size flexibility will achieve considerable price savings by adjusting to a slightly smaller carton count.
The bullish grower sentiment is compounded further when considering the supply shortages in some of the world's larger producing regions. Russia is buying heavily from Prince Edward Island, and Northwest processors are expressing high interest.
All major producing regions are bullish. A large Colorado shipper said, "At the pace we've been selling since September, we'll exhaust our supplies by late April instead of the usual early to mid-July". A Washington state salesman added, "We expect strong export demand to continue. As well, we've recently received calls from Idaho shippers asking for help filling their contracts."
LEMONS The threat of a freeze in the desert has past. Growers are assessing what, if any, damage occurred with the hard freeze the first week in February. Lemons hanging on the trees continue to gain size. This size shift means that 115s and larger are more available, while 165s and smaller are fading. Fruit is available for loading in Yuma, Coachella, Oxnard and the Central Valley. Domestic demand will hold steady into late February. Buyers can achieve considerable savings by loading independent fruit.
ORANGES A frost advisory has been issued in the Central Valley for the nights of Feb. 9 and 10 with projected overnight lows near freezing. In general, oranges hanging on the trees continue to gain size. The navel crop is peaking on 88s, 72s, 113s and then 56s; 72s and 88s represent 55-60 percent of the current production. Packouts are running 65 percent fancy grade and 35 percent choice. The eating quality of the navel crop is excellent. Central Valley shippers are seeing continued strong export demand to the Pacific Rim. New- crop navels are available for loading in the Central Valley, followed by Oxnard and Riverside. Buyers willing to buy independent fruit, and have trucks in the Central Valley, can save some money.