Salinas, CA: Daytime highs will remain in the low 60s through June 5, then bump into the mid-60s June 6-7. Overnight lows will be in the upper 40s to low 50s. There was a 20 percent chance of rain June 1, and rain showers are likely June 3-5.
Fresno, CA: Daytime temperatures will remain unseasonably cold through June 7 with highs in the low to mid-70s and overnight lows in the upper 40s to mid-50s. Historically, daytime highs in early June are in the 90s. There is a 20 percent chance of rain June 3 and a 40 percent chance June 4.
Yellow onion shippers are on the verge of a demand-exceeds-supply market. Idaho is seeing good consumer bale and No. 2 demand. Row crop shippers said that weather conditions have decreased broccoli and cauliflower supplies below current demand.
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Truck availability is tight, and rates will increase further in mid-June as the production of stone fruit, grapes and melons rises.
The price of crude oil decreased $2.45 June 1 to $100.25 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 30 was $3.95, which is 32 percent higher than one year ago. The average price in California for a gallon of diesel is $4.22, which is 37 percent higher than last year.
Salinas Valley lettuce quality recovered nicely from the late-season rains in mid-May. Receivers can buy with confidence that today's lettuce harvest will arrive with good color, weights and shelf life. The next challenge looms with the forecast of more rain and continued cold temperatures in early June.
Another strong late-season storm system is looming over the Pacific Ocean and will affect California's Central Coast June 3, 4 and 5. Daytime highs will reach only 60 degrees, and rain showers are expected to arrive late June 3 and continue into early June 5. Salinas and Watsonville could each receive a total of 0.50 inches of rain.
The chronic pattern of cold temperatures during April and May in the Salinas Valley are delaying crop maturity. Salinas shippers said that lettuce fields are 10 days behind schedule. A Salinas lettuce salesman recently stated, "Lettuce being harvested today (June 2) was planted with the intention of being ready May 23. Fields and volume are bunching together and piling up. Combine this with today's light demand, and the result is very reasonable prices."
The heavy winter rains in February and March did not allow Central Coast growers to plant on schedule. As a consequence, the lettuce industry will swing in and out of a few production gaps this summer. A salesman for a large Salinas lettuce shipper forecasts a rain gap the entire week of June 6. This shipper expects a 50 percent volume drop the week of June 6. The salesman stated, "A big production drop for a large shipper tends to affect the market. Only time will tell if there will be enough demand to spark a market rise."
Buyers can expect roller coaster lettuce prices early this summer as Salinas shippers struggle through rain gaps in June and possibly July. Today's market is reasonably priced, and there is just one direction it can move: higher. Odds are that the pending rain gap beginning June 6 will decrease supplies more than enough to raise the market.
Salinas Valley leaf shippers expect a decrease in supplies the week of June 6 due to a rain gap. However, unlike Iceberg lettuce, the leaf market is not expected to advance.
Regional leaf deals in the Midwest and East are offering good supplies of leaf lettuce. The net effect is less demand for product from the West Coast. The leaf market will remain fairly quiet until the regional deals are hit with either excessive summer heat and/or rain. When this happens, and it will, demand unexpectedly swings back to California, and the leaf markets quickly advance.
Rain gaps and the persistently cold spring in the Salinas Valley are creating variances in broccoli production from one week to the next. A Salinas Valley salesman recently stated, "The chronic cold daytime temperatures are creating a roller coaster effect in production and the market. It's difficult to sell against our two-week production estimates when the flow of supplies is so inconsistent." Another salesman offered, "Today's broccoli market is like the weather in the Midwest. If you don't like it, just wait a day or two and conditions are bound to change." Supplies are currently in a downward cycle, and prices will advance into the week of June 6.
For the second consecutive week, Santa Maria is producing enough new-crop celery to raise statewide production above overall demand. Oxnard and Santa Maria shippers continue to slug it out and compete for market share across the nation. The celery market has eased considerably since mid-May and should soon regain a stable trading range near current levels.
The persistently cold spring has delayed the beginning of the Salinas celery season. Historically the new-crop celery begins in early June. Daytime high temperatures this spring have been consistently 10-15 degrees below normal, and several Salinas shippers now forecast a start date of June 20.
Another strong late-season storm system is looming over the Pacific Ocean and will affect California's Central Coast June 3, 4 and 5. Daytime highs will reach only 60 degrees, and rain showers are expected to arrive late June 3 and continue into early June 5. Watsonville could receive a total of 0.50 inches of rain.
Local strawberry production recently increased and is expected to reach its season peak in late June. The direction of short-term prices, production and quality depend on the amount of rainfall over the weekend of June 4. In a worst case scenario, production will be negatively affected June 6-9. Daytime highs in the mid-60s are expected beginning June 8.
The New Mexico deal is delayed one to two weeks and will be plagued with light yields and undersized onions through July. 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 believe New Mexico lost 20-30 percent of the entire summer crop. We sense the new crop will start between June 7 and 13 instead of June 1. Initial production will be very light, and onions will be undersized." Another New Mexico shipper recently offered, "We have 50 percent of a crop in June and 75 percent in July."
New Mexico and Huron, CA, are the nation's two primary onion-shipping districts in June and July, and New Mexico is the larger of the two. A large New Mexico shipper said that New Mexico normally ships 140 loads per day in June and July, of which 100 are jumbo yellows. The current forecast is for New Mexico to ship just 80 loads per day in June, of which only 30 will be jumbo yellows. That's an incredible reduction of 43 percent and 70 percent, respectively.
Buyers must be aware that the onion industry is on the verge of a mammoth production gap. The yellow onion market is poised to catapult substantially higher any moment and remain a strong seller's market through all of June and deep into July. The red and white markets will follow quickly. Now is an opportune time to load extra onions and get ahead of curve.
Central Valley daytime highs have been cold all spring. Highs in early June should be in the 90s yet will remain in the 70s through June 7. This strong and unprecedented weather pattern is delaying the onset of the Huron onion deal. One Huron shipper may start the Zephyr variety June 3, while all others will be delayed until June 6-7. It's just a matter of time before the nation's onion buyers wake up to the fact that New Mexico has a huge problem and that California cannot even begin to compensate for the mammoth shortfall. Washington state will soon add to the deficit because May 30 was its last week to pack storage yellow and red onions.
Idaho shippers were seeing continuing brisk consumer bale and No. 2 demand while carton interest remains moderate. 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 sense that overall supplies are short for this time of the year and are reducing packing hours. The goal is to stretch the remaining supplies and prevent or minimize a gap in July between the old and new crops. Carton prices have fallen considerably since April and have once again found a stable trading range at current levels. The next carton market price move will be to the upside and likely begin in mid-June.
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.
The cold spring is curbing lemon supplies in Oxnard and the Central Valley. The market is very firm at current levels. Shippers foresee the next price increase the week of June 6 or June 13. Overall quality is strong. Lemons are available in Oxnard and the Central Valley, and can load with Valencia oranges.
Another strong late-season storm system is looming over the Pacific Ocean and will affect California's Central Coast beginning Friday, June 3. Central Valley daytime highs in early June are normally in the mid-90s. The cold spring will continue through June 7 with daytime highs only in the 70s from Fresno to Bakersfield. The unprecedented cold spring in the Central Valley has altered the size profile of new-crop Valencias. Shippers said that fruit is peaking on 72s followed by 88s and then 56s instead of the customary 88s through 138s. This is good news for retailers and bad news for foodservice operators. Overall quality is strong with good sugars. If you haven't already done so, switch varieties from navels to Valencias. Oranges are available for loading in the Central Valley followed distantly by Oxnard and Riverside. Oranges and lemons can load together in either district.
The four-month struggle with light volume and undersized carrots is nearly over. California carrot shippers said that the production of jumbo carrots and two-inch plugs is approaching normal levels. Production of four-inch plugs will remain light until the week of 13.
(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)