Salinas, CA: The persistent stretch of cold weather was joined by rain May 14-17. Daytime highs recently have been in the upper 50s to low 60s with intermittent rain showers. The rain is expected to end May 18, but daytime temperatures will remain unseasonably cold through May 24.
Bakersfield, CA: Daytime highs will remain unseasonably cool through May 24 with daytime highs only in the mid- to upper 70s. The recent string of late-season rains will give way to mostly sunny skies beginning May 19.
Imperial Valley, CA: Daytime highs will remain unseasonably cool through May 24 with daytime highs only in the mid- to upper 80s. Temperatures historically reach the mid- to upper 90s in mid-May.
California onion shippers were seeing much improved demand and strong prices. Persistent cold temperatures and late-season rains in the Salinas Valley have dropped the supplies of lettuce and strawberries below current demand.
TRANSPORTATION & FUEL
Truck availability is tightening and rates are rising with the start of California's stone fruits, grapes and melons.
The price of crude oil rose $2.71 May 18 to $99.63 per barrel. which is 32 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of May 16 was $4.06, which is 31 percent higher than one year ago. The average price in California for a gallon of diesel is $4.37, which is 35 percent higher than last year.
Iceberg lettuce has become a strong seller's market for four reasons: First, lettuce being harvested today was above ground and endured the heavy March rains. Quality is not as strong as typically seen in mid-May. Second, recent temperatures along California's Central Coast have been persistently far below normal, which slows growth and reduces production. Third, the Salinas Valley has recently experienced unusual late-season rains. Shippers are beginning to talk about sclerotinia, which is a fungus caused by excessive moisture. If severe enough, it will produce brown rot diseases. And fourth, shippers are swinging in and out of production gaps because growers were not able to plant as scheduled due to heavy rains in February and March.
The lettuce market has climbed significantly since May 4. Shippers said that some processors have been forced to procure extra lettuce acreage to meet the strong Memorial Day demand. Retail, foodservice and wholesale demand have also been brisk since early May.
It appears that lettuce prices are near the top of the current market cycle. It's a given that post-Memorial Day demand will ease. More important, California stone fruits, melons and grapes will be available soon and compete with lettuce. The introduction of these three lines come with a sense of novelty and will be highlighted.
The recent cold and wet conditions along the Central Coast will affect lettuce quality to varying degrees. Receivers soon may experience reduced shelf life. The best advice is to buy quantities in the near term which can comfortably be moved upon arrival.
Romaine and green leaf have been exposed to the same elements as Iceberg lettuce, yet these markets are not nearly as active. The most plausible explanations are that more acreage is under production and that eastern supplies recently have been introduced. West Coast shippers forecast the Romaine and green leaf markets to hold fairly steady near current levels heading into the week of May 16.
Broccoli production shifted from glut to gap in early May. Supplies finally have steadied, and the market once again has found a fairly stable trading range. The late-season rains will end May 19, and dry skies are predicted through at least May 24. Supplies of good-quality broccoli may increase modestly heading into the week of May 23. The market will hold steady or possibly ease through the balance of May.
Celery is one of the few items not significantly influenced by the recent cold and rain. The market has actually eased a modest amount since the week of May 9.
The celery market escalated from late April through early May for two reasons. First, the much-anticipated seeder problem in Oxnard arrived in full force and reduced 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 are swinging in and out of production gaps caused by the heavy winter rains which prevented growers from planting their fields on schedule.
The start of the Santa Maria celery season is the main reason for the recent market adjustment. Buyers now have two districts from which to choose, and overall supplies from the state are higher. The near-term market is expected to hold fairly steady at current levels heading into the week of May 23. Salinas celery shippers will continue to consolidate supplies from Oxnard and Santa Maria until their local season starts in early June.
The recent cold daytime temperatures and late-season rains have reduced strawberry production from Santa Maria to Salinas and Watsonville. The market is higher in reaction to reduced supplies, which will stay below normal through the end of May. Field crews have been forced to slow the pace of the harvest and be very selective. Assuming dry skies, which is the forecast through at least May 24, fruit quality will not return to pre-rain levels until the week of June 6.
Production from California's Imperial Valley initially compensated for Texas' decline in early May. For the second week in a row, California's volume is not able to compensate for further declines in Texas. Texas onion supplies continue to fade, and the McAllen onion season expects to conclude by May 24. Therefore, the nation will rely even more on the Imperial Valley beginning May 23. The result is today's bullish yellow onion market.
Imperial Valley shippers said that heavy phone traffic started May 10 with much improved demand. Jumbo yellow prices accelerated quickly off the bottom and are now selling at a brisk pace. Shippers continue to see heavy phone traffic and strong demand from all regions of the country.
The New Mexico deal will be delayed and 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. We sense the new crop will start between June 7 and 13 instead of June 1, and onions will initially be undersized. We fear yields will be light at summer."
In California, the recent string of cold temperatures and last-season rain showers is delaying the start of the Huron crop beyond the traditional June 1 start. The combination of delays in the summer's two primary shipping districts, New Mexico and central California, has created a sense of urgency in today's market. The onion market is poised to be a strong seller's market beginning May 23 as it's becoming obvious that a substantial production will occur from late May through June.
Washington state shippers will continue to offer storage yellow and red onions into early June. Jumbo red prices from the Northwest remain very competitive and are keeping a lid on new-crop red prices in Texas and California. The jumbo red market will advance once Washington state supplies are exhausted from late May to early June.
Truck 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.
The consensus of the 2010-11 Idaho Burbank crop through March 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 said, "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."
A least one major Idaho shipper was seeing an increasing need to fulfill processor contracts. This essentially reduces the quantity of non-A supplies available to retailers. Idaho shippers are reducing packing hours because they sense that the remaining storage supplies are short. The goal is to stretch the remaining supplies and prevent a gap in July between the old and new crops. Carton prices have once gain reached a stable trading range after declines since late April.
Colorado supplies are light, and many shippers expect to conclude their season in early June, which is one month early. This will apply added pressure to the overall russet market and present additional supply challenges.
Late-season rains in the Central Valley and Oxnard have interrupted the harvest and limited near-term supplies. An extended period of dry skies will return Thursday, May 19. The lemon districts are shifting from Oxnard to the Central Valley. Fruit quality is strong, and initial sizing is larger than expected.
Late-season rains in the Central Valley have interrupted the harvest and limited near-term supplies. An extended period of dry skies will return Thursday, May 19. It is now time for foodservice buyers to switch varieties from navels to Valencias. The last remaining navels are large, and overall supplies are dwindling. The new-crop Valencias offer excellent quality and juice content. The unusual aspect is that the early-season fruit is larger than expected with lots of 88s and 72s. Traditionally, early-season Valencias are heavy to 113s, 138s and 88s. Supplies are available in Oxnard, Riverside and the Central Valley.
California carrot shippers are still struggling 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 said, "We will continue to harvest in the desert for another week or so. 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 the week of May 30. Availability will return to normal by the week of June 6."
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.)