Salinas, CA: Daytime temperatures will be in the upper 60s to low 70s through July 26 with overnight lows in the low to mid-50s. Patchy morning and evening fog will persist into late July.
Mendota, CA: Daytime temperatures will be in the low to mid-90s through July 26 with overnight low in the mid- to low 60s.
Demand for California melons exceeds very light supplies. Russet demand continues to greatly exceed the remaining supply in all shipping areas.
TRANSPORTATION & FUEL
Truck availability on the West Coast is adequate. Freight rates will remain near the summer season's peak heading into the latter half of July.
The price of crude oil rose 64 cents July 20 to $98.14 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 18 was $3.92, which is 35 percent higher than one year ago. The average price in California for a gallon of diesel is $4.11, which is 32 percent higher than last year.
Lettuce acreage in Salinas and Santa Maria is purposely reduced during the summer months because schools are not in session and there is strong competition from melons, stone fruit and grapes at the retail level. This lighter production leaves less room for error should problems occur either in California or the regional deals in Canada, the Midwest or along the East Coast.
Salinas lettuce shippers are combating lettuce mildew. Some shippers are purposely harvesting lettuce four to five days early and removing extra wrapper leaves to ensure healthy, clean lettuce. The result is lighter volume, lighter weights and the occasional pale color. A number of shippers are offering cello wrap 30-count. Shippers expect this pattern of lighter volume and weights to continue into early August.
Regional deals throughout Canada and the eastern United States have been enduring excessive heat since early July. It wouldn't take much more heat stress to hurt quality and force buyers to consider shifting their business back to California's Central Coast. Should this occur, California would not necessarily be able to pick up the slack and adequately address the unexpected additional demand. A salesman for a Salinas lettuce shipper stated July 20, "I recently sold two loads of lettuce to Canada. I can't remember the last time this company shipped a sizeable lettuce order to a regional growing district in July."
Production in California is already down, and the market is fairly expensive. An extended wave of unexpected business would quickly produce a strong seller's market and substantially higher prices.
California's Central Coast leaf market is in a similar situation as Iceberg lettuce. Summer plantings are purposely down, and excessive heat is on the verge of hurtting the quality in the regional growing areas. An extended wave of unexpected business would quickly change the dynamics of the leaf market and produce a strong market rally.
Broccoli supplies remain good from the Salinas Valley and Santa Maria. West Coast shippers were seeing light demand in part because Midwest and East Coast buyers have additional sources in Maine and Canada. The West Coast market could change quickly if harsh weather and/or hot temperatures hurt these regional growing areas.
All broccoli packs in California, including Asian crowns, are in good supply. The market will remain steady and reasonable heading into the week of July 25. For now, 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. The market is noticeably higher for the limited supplies of 36s and 48s. 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 recent high heat in Michigan has increased the likelihood of demand switching back to California and sparking a market rally.
The market recently adjusted higher as production from Salinas and Watsonville dropped from early July levels. Overall production will decline noticeably, as expected, through much of August. Smaller fruit size will go hand in hand with the slide in production.
A quality variance is surfacing in Salinas and Watsonville. A two-tier market is beginning to build, and the better known labels will soon command a premium. This trend will become more pronounced as mid-August approaches. Buyers should expect additional price hikes in late July and again in early to mid-August.
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 demand. The jumbo yellow market should hold fairly steady through the week of July 25.
A large jumbo red price difference exists between New Mexico and California. The variance is so large that some New Mexico shippers are bringing in California reds to supplement their needs.
New Mexico has a 20-40 percent chance of daily rain showers and thunderstorms through Tuesday, July 26. Weather in California is dry and hot, which is ideal for onion quality. Buyers will need to watch carefully the near-term weather in New Mexico and possibly divert orders to California.
Truck availability is adequate for the moment. When it gets tight, it can indirectly create a sense of light demand for onions. 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 that a tight truck market curbs demand for product. Flatbed trucks are the preferred mode of transportation because the highway wind whistles through the load and keeps the respiring onions dry.
Prices recently increased on all grades of 140s and larger. Patchy fog will continue in Oxnard through July 26 with daytime highs in the low to mid-70s. Continuing strong summer demand is stair-stepping prices higher each week. Chilean lemons are available on both coasts. Chilean volume will be large enough beginning 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 currently available in Oxnard and the Central Valley, and can load with Valencia oranges.
Daytime temperatures have finally and thankfully returned to a fairly normal range. 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 will continue to 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 winter and spring struggle with light volume and undersized carrots from California is thankfully a thing of the past. Shippers said that production of jumbo and plug carrots is at normal levels. The jumbo carrot market eased in early July and is now expected to hold steady near current levels. Overall carrot quality is excellent.
The Mexican Hass avocado season is in its final stages and will offer only smatterings of volume through the remainder of the summer months. What production growers have 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.
New-crop Chilean supplies are just beginning to trickle onto both the East Coast and the West Coast. The strong seller's market will continue until late July or early August when volume from Chile increases to seasonal levels. There is a possibility that Peruvian avocados will be permitted into the United States later in July.
The cool spring and early summer set the stage for a very unusual beginning to the West Side melon deal. The season began late and with very limited volume. The cantaloupe size profile is uncharacteristically heavy to 15s and 18s, and shippers even have a few 23s. Cantaloupe 12s are scarce and will remain as such for the foreseeable future. Honeydews are in a similar situation, and the crop is heaviest to 8s instead of 5s followed by 6s. Overall production is far below normal, and shippers are essentially sold out through the week of July 18. Looking down range, shippers are optimistic that new fields the week of July 25 will offer a normal size profile.
Daytime temperatures have recently approached the normal range and will bounce between 91 and 96 degrees through July 26 with overnight lows in the low to mid-60s. Sugars are good, and the eating quality of today's cantaloupes is very good despite the small size profile. Buyers can order with confidence that today's melons will arrive with ample shelf life.
(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)