Daytime temperatures in Salinas were expected to hover in the mid-60s through July 18 then nudge into the low 70s starting July 19. Overnight lows should remain in the low 50s. There is no threat of rain in the current forecast.
Daytime temperatures in Mendota were uncharacteristically cool in the mid-80s and were expected to rise into the mid-90s beginning July 17. Overnight lows will range in the mid- to upper 50s.
Russet demand continues to greatly exceed supply in all shipping areas. Salinas Valley row crop shippers were seeing moderate to light demand on most key items.
TRANSPORTATION & FUEL
Truck availability on the West Coast is adequate and freight rates should remain near the summer season’s peak heading into the latter half of July.
The price of crude oil rose modestly the second week of July to $97.95 per barrel, which is 33 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of July 11 was $3.90, which is 34 percent higher than a year ago. The average price in California for a gallon of diesel is $4.10, which is 31 percent higher than last year.
The Salinas Valley saw rain June 28 followed by above-normal temperatures in early July. Temperatures since July 7 have been below normal with abundant of fog and wind.
Such wide swings in weather are not good for lettuce quality or yields. Some shippers experienced steady and budgeted lettuce volume heading into the week of July 18, while others were noticeably falling short. In some instances Salinas shippers are fielding phone calls from other shippers in search of open-market acreage.
The lettuce market was quite reasonable in late June and through the July 4 holiday. The current market has gained moderate momentum as some shippers find themselves short of good- quality fields ready for harvest.
A Salinas lettuce salesman recently stated, "The lettuce market is just firming up and is not expected to run higher. That said, we could sure use a stretch of seasonally consistent weather through the remainder of July."
The near-term weather forecast calls for below-normal temperatures to continue through July 15 then gradually rise into the low 70s by July 19.
Buyers should expect the recent yo-yo weather pattern to reduce overall production and breathe some new life into the lettuce market. Moderate roller-coaster market swings will likely occur through the remainder of July.
The June 28 rain and subsequent warm temperatures acted like a shot of fertilizer and briefly accelerated field maturity into early July. Total production is lower today, but ample acreage under production is softening the effects of any volume decrease. Leaf quality is strong with good weights, color and texture. Today's harvest will offer good shelf life upon delivery.
Salinas shippers are hearing rumors that regional leaf lettuce deals along the East Coast are beginning to suffer from the recent string of hot temperatures and periodic thunderstorms. For now, the West Coast leaf market is calm. This would change quickly and without notice should buyers abandon the regional leaf deals and swing their business back to California's Central Coast.
The near-term Romaine and Green Leaf markets have the potential to rise quickly and need to be watched carefully.
Broccoli supplies remain ample from the Salinas Valley and Santa Maria. West Coast shippers are seeing light demand in part because Midwest and East Coast buyers have additional sources to consider. Maine, for instance, is offering ample supplies of good-quality product.
All broccoli packs in California, including Asian crowns, are in good supply. The market will remain very reasonable heading into the week of July 18. This remains an excellent 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 followed by 30s. A two-tier market has developed in California, as Santa Maria shippers attempt to lure orders and trucks away from Salinas.
The Michigan celery deal is in its early stages and will compete with California for U.S. market share through the summer months. The current market cycle has topped out and was expected to ease moderately heading into the week of July 18.
Production from Salinas and Watsonville is down slightly from the season's peak, which occurred in late June to early July. Today's volume will stay fairly steady through July before declining noticeably through much of August. Current quality from Salinas and Watsonville is excellent and offers good shelf life after arrival. Fruit size will drop as the overall production declines in the coming weeks. The market was expected to hold fairly steady into the week of July 18. There is a multi-tier market based on labels.
The much-anticipated high onion market in June and early July never materialized. Production from New Mexico has normalized and will remain as such through the duration of the shipping season, which ends in mid- to late August.
Jumbo yellow supplies from California and New Mexico are more than enough to meet today's moderate demand. The jumbo yellow market appears steady but has the possibility of easing modestly in the near term.
The jumbo red market is the only segment showing signs of strength. California shippers were plugged with excess production through the week of July 4 and prices were at rock bottom. Production has since scaled back and the market is adjusting higher.
Truck availability for the moment is adequate. When it gets tight, it can indirectly create a sense of light demand for onions. A truck shortage means that 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 that a tight truck market curbs demand for product.
Today's russet market can be described as having demand that 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. 15-18, which is up to 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 early to mid-August."
Fresh buyers have tried 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 only taking orders 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. As a result, buyers may have to be flexible on sizing. This is a strong seller's market and prices have the potential to rise further in the near term.
Patchy fog was predicted to continue in Oxnard through July 17, with daytime highs in the upper 60s to low 70s. Temperatures were expected to bounce into the upper 70s beginning July 19. Continuing strong summer demand is stair-stepping prices higher each week. The first Chilean supplies are now available on both coasts. Chilean volume will be large enough to influence the U.S. market beginning in late July.
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 highs in the Central Valley remain unseasonably cold in the mid 80s. Highs should rebound to normal temperatures in the high 90s beginning July 18. 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 the market was expected to increase 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 five-month struggle with light volume and undersized carrots from California appears to be over. Shippers have seen the production of jumbo and plug carrots return to normal levels. The jumbo carrot market has recently eased and is now expected to hold near-current levels. Overall carrot quality is excellent.
The Mexican Hass avocado season is in its final stages and will only offer smatterings of volume through the remainder of the summer months. What production that remains 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. The bottom line is that California cannot compensate for the production drop in Mexico.
The strong seller's market will continue until late July or early August until the introduction of new-crop fruit from Chile. When it arrives, price relief will only be modest.
The cool spring and early summer is the reason the 2011 West Side melon season is off to a late start and initial sizing is far below normal. Current daytime highs are only in the mid 80s. Highs were expected to return to the seasonal upper 90s beginning July 18.
Historically, 9s and 12s are 80 percent of the production. Today, 9s are 2 percent, 12s are 25 percent 15s are 50 percent and 18s are 23 percent. There is a substantial price drop for buyers willing to shift from 12s to 15s. Despite the small sizing, sugar levels are high and the eating quality of today's cantaloupes is excellent.
The very uncharacteristic size profile was expected to continue until July 20-22 when shippers break new fields and hope for larger fruit. The first Honeydews are now available and several more shippers will enter the by market by July 18.
(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)