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Hot cauliflower market cooling down

High retail prices and increasing supplies have resulted in a cooling down of a cauliflower market that was hot during much of April.

Denny Donovan, sales manager of Fresh Kist Produce LLC in Santa Maria, CA, said warm winter weather was the genesis of the situation.

"A warm winter helped speed up the cauliflower crop. In March, we were harvesting the cauliflower that was supposed to be sold during the first two weeks of April. That moved everything up, and for the past two-and-a-half weeks cauliflower has been very short," he said the last day of April.

However, he added that the cauliflower market was starting to weaken during the week of April 28 because supplies were greater than forecast. "And it looks like there will be even more [supplies] next week," he said. "The market is definitely coming down, just how far down we just don't know."

He said cauliflower had been trading for around $22 for much of the second half of April. He said a drop of at least $5 per carton over the next several days was likely.

Concurring was Tanimura & Antle in its regular industry newsletter that discusses supplies, but it said rising prices at the retail level were also responsible for lowering demand and knocking down the f.o.b. price. "Retail prices have definitely slowed down movement. $2 a head f.o.b. pricing cannot be sustained for more than a day or two. Supplies continue to be short, but the price must retreat for open market business to load."

Donovan said the warm winter weather also cut supplies of several other vegetable crops during the April time frame, but the demand was not strong to move the market upward.

And moving forward, he said there appeared to be plenty of supplies between the Santa Maria and Salinas valleys to keep supply and demand in check on most vegetable items.

Temperatures in both valleys were expected to eclipse 90 degrees, and Donovan said if the warm weather persists, there could be some tip burn on some of the leafy items, which might temper supplies.

On the other hand, the heat would bring on some fields faster, which would increase supplies. On balance, he anticipated no big jumps in the vegetable markets over the next several weeks.

The USDA's Market News Service report for late April indicates that the only other item with a very strong f.o.b. prices was avocados, and that has been anticipated for several months.

California's avocado crop, which is currently in full production, has been estimated at less than 60 percent of the volume of last year's 500 million pounds.

Ron Araiza, director of sales for Mission Produce Inc. in Oxnard, CA, said that decrease in volume has resulted in an f.o.b. price that "is on average $10 per carton greater than last year. But we haven't had the volatility in pricing that some predicted."

Araiza said the market has settled in at this higher rate (around $38-$40 for most sizes) and remained steady. "That's best for everyone," he said. "Retailers like it [when the market is fairly predictable]."

Some had predicted that the spot market grove price (paid to growers) could climb to record heights of well above $2 per pound.

"We haven't seen that yet and we're happy about it," he said.

Araiza said Mexican producers have also kept the price steady, which has added to the stability of the market. However, he did say that Mexican avocado supplies were beginning to decrease and California producers would have a higher percentage of the market over the next couple of months.

The unknown is how many Peruvian avocados will come into the U.S. market during this summer time period, and how supply and demand would be affected.

And as the season wears on, Araiza said buyers and sellers need to be aware that most California growers will be out of fruit by Labor Day.

"There could be a gap in September," he said. "At this point, we just don't know how much fruit we are going to get from Chile."

However, he added that New Zealand does have a fairly large avocado crop this year, which is harvested in the fall time period. He said New Zealand producers will probably send some of that fruit to the U.S. market, especially if prices are high because of low supplies.