Salinas, CA: Temperatures will remain unseasonably cold through May 17. Daytime highs will reach only 58 degrees May 15 with the possibility of rain, thunderstorms and even small hail. Overnight lows will be in the mid- to upper 40s.
Bakersfield, CA: Daytime highs will remain on the 80s through May 13, then dip into the mid- to upper 60s May 15-17. Overnight lows will be in the upper 50s through May 13, then plunge into the mid- to upper 40s.
Imperial Valley, CA: Daytime highs will remain in the mid- to upper 90s through May 13, then drop into the low to mid-80s May 15-17. Overnight lows will stay in the mid-60s through May 13, then fall into the mid-50s through May 17.
Texas and California onion shippers were seeing much improved demand and rising prices. Persistent cold temperatures in the Salinas Valley have reduced production levels on several key items to match or fall below demand. Carrot shippers were seeing continued strong jumbo and plug demand on limited production.
TRANSPORTATION & FUEL
Freight rates from California increased in late March with the shift of shipping districts from Yuma to the Salinas Valley. Truck availability will tighten, and rates will rise again with the start of California's stone fruit, grape and melon seasons in mid-May.
The price of crude oil fell $4.87 May 11 to $99.01 per barrel, which is 33 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of May 9 was $4.10, which is 31 percent higher than one year ago. The average price in California for a gallon of diesel is $4.46, which is 36 percent higher than last year.
Salinas Valley lettuce shippers have been caught off guard with the current slide in production and rise in the market.
Shippers point to the recent stretch of cold daytime temperatures. Aside from the brief warm period May 3-7, temperatures have been well below normal since the lettuce harvest started in mid-April. Daytime highs in the Salinas Valley will approach record lows the weekend of May 14. Salinas and Watsonville will reach only a high of 58 degrees Sunday, May 15, with the chance of rain, thunderstorms and even small hail.
A salesman for a Salinas shipper recently stated, "Aside from the cold temperatures, we are, to some degree, also dealing with production gaps from heavy winter rains, which did not allow us to plant as scheduled. Another Salinas salesman said, "We've had a hand grenade land in our laps, and the market has moved noticeably higher since early May."
At least one Salinas lettuce shipper has been approached by, and sold acreage to, a processor. History says that processor activity is a key factor in rising and sustained lettuce markets. The degree to which processors buy open-market lettuce will greatly influence the price foodservice distributors and retailers pay for lettuce.
For now, the cold weather will persist well into the week of May 16, overall supplies are below normal, and processors are showing interest for additional acreage. This combination of factors will result in continued higher prices at least into mid-May.
Romaine supplies are adequate, and the market is expected to hold fairly steady into the week of May 16. Green leaf is tight, and prices remain expensive. The continuing cold weather will curb production and prevent excess capacity. The Romaine and green leaf markets into mid-May will, to some degree, follow the direction and strength of the Iceberg market. Overall quality is strong.
The broccoli market had been inundated with ample supplies from mid-April into early May. But for every glut there is a gap, and the recent glut has been replaced with a production gap.
The recent stretch of very reasonable broccoli prices is over for now. Salinas shippers said that persistent cold temperatures have finally caught up with production. The result is noticeably lighter supplies, especially on Asian cut crowns. Buyers can expect rising prices well into the week of May 16.
Celery prices have risen considerably over the past three weeks and will remain stout through the month of May.
The celery market is expensive for two reasons. First, the much anticipated seeder problem in Oxnard has arrived in full force and is reducing yields. Seeders are produced when celery begins its reproductive phase and pushes up from the inner stalk to produce seeds. Seeders are allowed to be two-and-a-half times taller than the bottom width of the celery stalk. Excessive seeders are not marketable, hence growers harvest their fields early before the seeders exceed the allowed standards. The result is a higher-than-usual percentage of the mid- and small sizes. Second, shippers remain in a production gap caused by the heavy winter rains, which prevented growers from planting their fields on schedule.
New-crop celery is slated to start in Santa Maria the week of May 16. Shippers predict that they will combat seeders from the beginning and that initial supplies will not offer much market relief. The Salinas celery season will start in early June. Buyers can expect high prices and a seller's market through May.
Foodservice buyers are can load California strawberries in Oxnard, Santa Maria, Salinas and Watsonville. Fruit quality from Salinas, Watsonville and Santa Maria is exceptional with good sizing, deep color, glossy sheen and lengthy shelf life after delivery.
Below-normal temperatures are curbing production. The long string of cold daytime temperatures will persist at least until Tuesday, May 17. Daytime highs in Salinas and Watsonville will reach just 58 degrees May 15 accompanied by the threat of rain and thunderstorms and even the possibility of small hail.
A two-tier market may develop as shippers in Oxnard and Santa Maria attempt to lure both orders and trucks away from the Salinas Valley.
Texas onion supplies continue to decrease and will fall noticeably further later this week and through the week of May 16. Production from California's Imperial Valley initially compensated for Texas's decline. Today, California's volume is not able to compensate for further declines in Texas, and the yellow market is quickly advancing.
California shippers said that heavy phone traffic started May 10 with much improved demand. Some California shippers are sold out of jumbo yellows until May 13. Jumbo yellow prices are firm and will stair-step higher May 12-16. A California shipper recently stated, "We're getting run over, and rising prices are not stopping the charge. Jumbo yellow prices are definitely pushing higher. This market will advance daily in the near term. This market is going nowhere but up."
Washington state shippers will continue to offer storage yellow and red onions through most of May. Currently, jumbo red prices from the Northwest are very competitive and are keeping a lid on new-crop red prices in Texas and California. The jumbo red market will push quickly higher once Washington state supplies are exhausted either the week of May 16 or May 23.
Looking down range, New Mexico and Huron, CA, will begin around June 1. Rumors are flying that the front end of the New Mexico deal will be plagued with light yields and undersized onions. The early February freeze brought overnight temperatures between zero and 10 degrees in the onion-growing districts. Onion tops in countless over-wintered fields fell and did not recover. A New Mexico salesman recently stated, "We knew onions were in trouble when the cold temperatures killed some palm trees."
Trucks availability is limited, and fuel is expensive. Buyers are encouraged to stay ahead of inventories and load trucks as they become available. Flatbed trucks are the preferred mode of transportation because the highway wind whistles through the load and keeps the respiring onions dry.
More of the same. Through March, the mantra for the 2010-11 Idaho Burbank crop had been a lack of size. The market structure over the past several months offered price breaks from 70s to 80s and again from 80s to 90s. Slowly but surely, the foodservice trade shifted demand to these more reasonably priced carton counts.
Today's good availability of large Burbank cartons has caught shippers somewhat by surprise. A salesman for an eastern Idaho shipper recently stated, "We offer both Norkotahs and Burbanks from August to March, then rely on Burbanks into July. The Norkotahs offered more size all shipping season, and we expected the Burbank profile to be heavier to the mid-cartons. It will vary from cellar to cellar, but the Burbank crop has more size than first thought."
The recent Easter pull by retailers on consumer bales was heavy and generated high carton inventories leaving many Idaho packingsheds flush with cartons. The Idaho market on 70-count and larger cartons has eased over the past few weeks and is now more in line with Colorado and Washington. Deals remain available for volume purchases on large cartons.
Idaho shippers were seeing decent demand on consumer bales and No. 2s. Demand for cartons remains a bit soft, especially on 70s and larger, which seems to be every shipper's long suit. Idaho shippers expect continued good carton supplies into mid-May and possibly later. Overall supplies in Colorado are light, and several shippers will conclude their seasons in late May, which is one month ahead of schedule.
Demand and prices historically rise through the spring months. Overall lemon supplies are fairly snug, and sooner or later, the market will push higher. Sizing will increase gradually as the summer months approach. Prices are firm at current levels and are on the verge of more increases later in May. Overall quality is strong. Lemons are available to load in Oxnard and the Central Valley, and can load together with oranges.
The California orange industry is on the verge of switching from navels to Valencias. California Valencias are now available in light quantities and are primarily going to export. Production will increase quickly each week into late May and early June. Prices for foodservice-sized Valencias have eased recently and are now comparable to navels. Early-season Valencia sizing will begin heavier to the smaller foodservice sizes, and prices of Valencia 88s and smaller will fall below navels by mid- to late May. Oranges are available for loading in the Central Valley followed distantly by Oxnard and Riverside. Oranges and lemons can load together in either district.
California carrot shippers continue to struggle with undersized carrots and light production, caused by the cold winter and hard freeze in early February. A salesman for a large California shipper recently stated, "We will continue to harvest in the desert into late May. We started the Bakersfield harvest the week of April 18, three weeks early, which improved supplies on the baby whole peel carrots. The availability of jumbo and large plug carrots, which are used to produce shred carrots and carrots sticks, will remain light into late May. Availability will return to normal by June 1."
(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)