Salinas, CA: Daytime temperatures will be in the mid-60s to low 70s through July 12 with overnight lows in the low 50s. There is no threat of rain heading into mid-July.
Fresno, CA: Daytime temperatures will remain in the low 100s through July 7, then ease into the mid- to upper 90s through July 12. Overnight lows will be in the low to mid-70s through July 8, then ease into the upper 60s through July 12.
Russet demand far exceeds supply in all shipping areas. Salinas Valley row crop shippers were seeing moderate to light demand on several key items. Onion demand remains surprisingly light.
TRANSPORTATION & FUEL
Truck availability on the West Coast improved modestly with the conclusion of the July 4 pull. Freight rates remain near the summer season's peak.
The price of crude oil fell modestly July 6 to $96.76 per barrel, which is 34 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of July 4 was $3.85, which is 32 percent higher than one year ago. The average price in California for a gallon of diesel is $4.07, which is 30 percent higher than last year.
Salinas Valley lettuce shippers have recovered nicely from the late-season rain on June 28. Daytime high temperatures have returned to seasonal levels and will be in the upper 60s to low 70s through July 12 with overnight lows in the low 50s. There is no threat of rain heading into mid-July.
The June 28 rain acted like a shot of fertilizer and accelerated field maturity. Shippers expect good supplies to continue through July 15. Current lettuce quality is strong with good color, weight and texture. Today's lettuce harvest will offer good shelf life upon delivery. The market is very reasonably priced and is expected to hold near current levels heading into the week of July 11. This is an excellent time to highlight Iceberg lettuce from California's Central Coast.
Romaine and green leaf remain in a similar situation as Iceberg lettuce. The June 28 rain acted like a shot of fertilizer and accelerated field maturity. Ample acreage is under production, and nearly all shippers offer good supplies of high-quality leaf with good weights, color and texture. Today's harvest will offer good shelf life upon delivery.
Regional leaf deals on the East Coast and in the Midwest are offering good supplies of leaf lettuce. The net effect is less demand for product from the West Coast. The California leaf market will remain steady 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 react higher. For now, the West Coast leaf market will remain very reasonable heading into the week of July 11.
Broccoli supplies remain ample from the Salinas Valley and Santa Maria. The June 28 rain acted like a shot of fertilizer and accelerated field maturity. All broccoli packs, including Asian crowns, are in good supply. The market is very reasonable, and this remains a good time to highlight broccoli from California's Central Coast.
Salinas Valley and Santa Maria shippers continue to offer ample supplies of high-quality celery. The size profile continues to peak on 24s. A two-tier market has developed as Santa Maria shippers attempt to lure orders and trucks away from Salinas. The overall market is expected to remain steady and reasonable heading into the week of July 11.
Production in Oxnard has faded substantially over the past month, and shippers have essentially concluded their season. The annual 30-day soil moratorium in Oxnard begins July 15. New-crop celery from Oxnard will be ready by Thanksgiving.
Strawberry production has rebounded nicely from the late-season rain on June 28. Post July 4 demand is a bit relaxed, while over-production levels remain near the season's peak. Shippers expect harvest totals to drop 15 percent in the second half of July, and the decline will deepen through August and into September. Current quality is excellent and offers good shelf life after arrival. Fruit size will drop as the overall production declines in the coming weeks. The market may ease modestly in the near term. There is a two-tier market based on labels.
The much anticipated high onion market has not yet materialized. Shippers are left wondering what happened. The bottom line is that light production levels are offset by equally light demand. The post-July 4 holiday demand is down as expected and is further contributing to the unexpected slow pace of business.
Limited truck availability is also adding to the light demand. A truck shortage means there are more onion orders than there are trucks to haul the onions to market. Transportation cannot keep up with production, and onion supplies build at the source. The net effect is a tight truck market that curbs demand for product.
Aside from demand, the necessary ingredients are in place to produce a seller's market. Today's market remains fragile, and it wouldn't take much additional demand to push prices higher. Looking down range, the Northwest crop is late due to the cold spring and may present supply issues in August.
Today's russet market is demand far exceeds supply. Remaining storage supplies are incredibly light and falling into fewer hands with each passing week. Colorado's early exit has placed extra pressure on Idaho shippers who are struggling to minimize or prevent a gap between old- and new-crop russets. Adding further pressure are Northwest processors who find themselves in need of extra product and are willing to pay top dollar for the few remaining supplies.
The cold spring has delayed the progress of new-crop russets. Idaho shippers speculate that the harvest will begin Aug. 22-28, which is two weeks late. An Idaho salesman recently stated, "On one hand, we have processors and fresh buyers competing fiercely for limited old crop supplies. On the other hand, persistent cold temperatures throughout the spring will delay the start of the new-crop harvest, and we are forced to stretch today's remaining light supplies in order to prevent or minimize a gap between old and new crop. We have to balance today's excessive demand and light remaining supplies to make sure we don't run out of supplies in August."
Fresh buyers are trying to stay ahead of inventories and the rising market by loading additional product. This extra demand contributes to the frenzy and fuels even higher prices. Idaho shippers are so overwhelmed with business that they are taking orders only from regular customers three to seven days in advance of loading and establishing prices the day of shipment. In some cases, Idaho russet Burbank shippers are filling orders in Washington state with russet Norkotahs. Buyers may be required to be flexible on sizing. This is a runaway market, and prices will continue to rise daily in the near term.
Patchy fog will continue in Oxnard through July 12 with daytime highs near 70 degrees. Continued strong summer demand will stair-step prices higher through July. Limited early-season supplies of Chilean lemons are available on both coasts. Chilean volume will be large enough in late July to influence the U.S. market. Looking down range, production of the desert crop which starts in October may be down as much as 50 percent due to the February freeze. Current overall quality is strong. Lemons are available in Oxnard and the Central Valley, and can load with Valencia oranges.
Daytime temperatures in the Central Valley breached the century market July 1 and will be in the low 100s thru July 7, then ease into the mid- to upper 90s through July 12. The sizing profile of the Valencia crop is fairly typical and offers traditional percentages of most sizes. The market on small oranges is strong, and prices will stair-step higher through July on 88s, 113s and 138s. Overall quality is strong with good sugars. 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 five0month struggle with light volume and undersized carrots from California is thankfully over. Shippers said that the production of jumbo and plug carrots has returned to normal levels. Quality is excellent, and jumbo prices may ease further in the near term.
The Mexican Hass avocado season is in its twilight stages and will offer only smatterings of volume through the remainder of the summer months. What production there is will be second-bloom fruit, also known as La Flora Loca. The quality of this fruit may be suspect.
The 2010 California crop produced a record 575 million pounds. This year's production has fallen 55 percent, to 260 million pounds. The 10-year average in California is 380 million pounds. Bottom line: California cannot compensate for the production drop in Mexico.
The strong seller's market will continue until late July or early August with the introduction of new-crop fruit from Chile. When it arrives, price relief will be only modest.
(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 )