(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@comcast.net)
Yuma, AZ: Daytime highs will remain in the mid-70s through March 27, then rise into the low 80s. Overnight lows will be in the low to mid-50s through March 26, then rise into the upper 50s. There is no rain in the near-term forecast.
Oxnard, CA: Seven inches of rain fell March 19-22; another 1.5 inches were due March 23-24. Daytime highs will remain in the upper 50s through March 24, then gradually rise into the mid-60s by March 29. Overnight lows will be in the upper 40s to low 50s. An extended dry period is expected to start March 27.
Huron, CA: The recent pattern of rain and cold temperatures will continue through March 26. Daytime highs will rise into the mid-60s beginning March 27. An extended dry period is expected to start March 28.
Northwest russet shippers were seeing continued brisk carton and No. 2 demand on below-normal storage supplies. Carrot shippers were seeing strong demand on limited production. Iceberg and Romaine demand have returned to normal levels.
TRANSPORTATION & FUEL
The availability of trucks in California and Arizona is good. Freight rates are higher in response to rising oil prices. Rates will increase further when lettuce transitions north to Huron, CA, the weeks of March 28 and April 4.
The price of crude oil rose modestly March 23 to $105.62 per barrel, which is 28 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of March 21 was $3.91, which is 33 percent higher than one year ago. The average price in California for a gallon of diesel is $4.20, which is 37 percent higher than last year.
The lettuce industry is just beginning the spring transition from the desert to Huron. A small number of shippers is already harvesting in Huron, and several more will move north the week of March 28. All shippers will be in Huron by April 4.
The unusually heavy rain and cold temperatures in Huron have the attention of many shippers. A salesman for a Salinas lettuce shipper with acreage in Huron recently said, "The Huron deal is often a wild card with changing weather and varying degrees of quality. The recent cold and wet weather pattern will no doubt play a large factor in the quality of Huron lettuce the weeks of March 28 and April 4."
The moderate to cool weather pattern in the desert in early to mid-March will help stretch the desert season. A salesman recently stated, "Daytime highs in Yuma over the past week or so have been in the mid-70s to mid-80s. We haven't seen too many hot days in the 90s. If needed, the desert season can easily continue into the week of April 4 with good quality."
The weeks of transition will be March 28 and April 4. This is the time processing plants break down in the desert and move north to the Salinas Valley. Long-haul trucks will be asked to make some difficult pickups, which could stretch from Salinas to Huron and the desert. Looking down range, the first Salinas lettuce will start the week of April 18, with most shippers beginning the week of April 25.
There will be a lot of moving pieces in late March which all contribute to the price of lettuce. The market, as always, will be defined by weather. The recent weather pattern suggests an awkward start to Huron. An extended dry period is expected to begin March 28 and will hopefully yield market stability and good quality in early April. The near-term market is expected to hold steady into the week of March 28.
The Romaine market is again moving in tandem with Iceberg lettuce. The first Huron leaf will be available the week of March 28 with improved supplies April 4. An overlap is expected as some desert shippers will continue through April 8. The first Salinas leaf will be ready as early as April 11 with good supplies the week of April 18. The Oxnard season will continue into May. The near-term market is expected to hold steady into the week of March 28.
The transition from the desert to the Salinas Valley continues. Supplies are currently available in the desert, Mendota (the Central Valley) and Salinas. Unusually heavy rains in late March are interrupting the harvest and limiting supplies in the north. The market is on the rise, and Asian crown supplies are once again very limited. Buyers can expect a wide range of prices, based on shipping districts, to continue into early April. An extended dry period is expected to start March 28.
Oxnard celery shippers foresaw serious problems before 7 inches of rain fell March 19-22. The market was already poised to rise because of the heavy rains over the holiday season and cold temperatures in January and February.
In the near term, shippers are bracing for limited production because of the recent heavy rain. Longer term, shippers foresee quality issues and rain gaps through much of April and into May. Some Oxnard growers are already seeing seeders, which normally don't become a market factor until mid-April.
Some shippers predict prices over the next one to two weeks to rise and test the expensive levels seen in early February. Today's prices are at the bottom of the current market cycle, and may not be seen again until May.
Oxnard received 7 inches of rain March 19-22, and more is expected today (March 24). This rain is very untimely and arrives just as Oxnard becomes the nation's primary shipping district.
A major shipper with operations in Florida, California and Mexico recently stated, "The late winter transition to Oxnard can be dicey. The success of the transition depends greatly on the weather. This heavy rain March 19-24 is a hard blow to the Oxnard berry deal. Fruit showing any degree of red color will need to be stripped from the vines. For now, we must rely more on Mexico and Florida, which are districts late in their seasons and producing less and less fruit."
The strawberry market has increased recently and will undoubtedly rise higher in the near term. An extended dry period is expected to start March 28. A sense of normalcy should return the week of April 11.
More of the same: light demand, good availability and multiple shipping districts are contributing to today's soft market. Onions are available from Washington, Oregon, Idaho, Utah, Texas and Mexico (via McAllen, TX). Prices are expected to remain flat and fairly weak into the week of March 28.
Nearly all Texas shippers are running domestic onions. Cold weather during a critical point in the growing season has produced a rather small size profile. Pre-pack and medium yellows are plentiful, large jumbos are somewhat limited, and colossals and super-colossals are tight. Red and white supplies are abundant. Supplies from Mexico remain plentiful and will continue into May.
A few of the smaller Ontario, OR, shippers have finished their season, while several larger shippers will continue into late April. Washington state shippers will continue through April and into May.
The surge in oil prices has forced freight rates higher, and the increased cost is passed along to the consumer in the form of higher delivered prices. Railex prices are steady and more attractive than ever. Whether truck or rail, buyers are encouraged to secure their transportation needs in advance.
The horrific events in Japan are being watched by the world. Far, far down the list of concerns are the effects on Japan's agricultural industry. Washington state onion growers may very well increase their onion acreage this spring because Japan, under normal conditions, is a sizable importer of Washington state onions to supplement its national crop.
Generally speaking, potato packingsheds run when they have consumer bale orders, and carton counts are generated as a by-product. This means that the availability and price of cartons to the foodservice trade is a function of retail demand for consumer bales. Idaho shippers said that current demand for consumer bales is moderate to sluggish.
Foodservice buyers have observed a large price gap between large and mid-sized carton counts for several months. The price point falls between 70s and 80s, and again from 80s to 90s and 100s. Idaho shippers said that demand for 80s, 90s and 100s has recently strengthened as buyers shift to the more affordable mid and smaller carton counts. The near-term market will reflect a narrowing price gap between the large and mid carton counts.
The surge in the oil market is forcing freight rates higher, and they are passed along to the consumer in the form of higher prices. The combination of rising fuel prices and tight carton supplies will push carton prices higher into the spring. Today's availability of carton counts is limited and subject to availability, and buyers are encouraged to plan ahead.
The market will be tested when the Wisconsin season fades in early April and Colorado shippers reduce packing hours to stretch their light remaining crop.
Persistent heavy rains in the Central Valley and Oxnard continue to interrupt California's citrus harvest. Shippers are struggling to balance lighter supplies and brisk demand. More rain is expected through March 25. Aside from the rain, overall supplies are tightening and the market has firmed since the desert season finished three to four weeks ago. Buyers in the near term must rely on rain-soaked Oxnard and the Central Valley for supplies. The availability of 200s and smaller is fading and increasingly difficult to procure. The percentage of 140s and larger continue to rise and are the bulk of today's packouts. Clear skies and an extended dry period are expected March 28.
Persistent heavy rains in the Central Valley and Oxnard continue to interrupt California's citrus harvest. Shippers are struggling to balance lighter supplies and brisk demand. More rain is expected through March 25. Aside from the rain, the current size profile is pretty much what the industry will offer for the duration of the navel season, which continues through May and into June. The navel crop continues to peak on 88s, 72s and 56s, which represent 65-70 percent of today's packout. Fruit is currently running 65 percent fancy grade and 35 percent choice. Fruit is primarily available for loading in the Central Valley followed distantly by Southern California. Clear skies and an extended dry period are expected March 28.
Bakersfield carrot shippers continue to struggle with undersized carrots and light production from the cold winter and the hard freeze in early February. A salesman for a large California shipper recently stated, "Ideally, we'd sit out for three to four weeks and let the fields mature. Going without is not an option, so we will continue to enter fields early and delay our recovery." Shippers expect modest gains weekly leading to a full recovery in May. The availability of jumbo and plug carrots will remain sparse for the next several weeks. Plug carrots are used for several items, including shred carrots and carrot sticks.