Daytime temperatures in Salinas were expected to range from the upper 60s to low 70s through Aug. 16 with overnight lows in the mid 50s. Patchy morning and evening fog should persist into late August.
In Mendota, CA, daytime temperatures were expected to be in the mid- to upper 90s through Aug. 16 with overnight lows in the low 60s.
Salinas row crop shippers are seeing continued modest demand. Strawberry shippers are experiencing strong demand for the premium lots and labels.
TRANSPORTATION & FUEL
Truck availability on the West Coast is adequate and freight rates should remain steady heading into late August.
The price of crude oil increased Aug. 10 by $3.18 to $82.48 per barrel, which is 44 percent below record levels set in July 2008. The nationwide average price for a gallon of diesel the week of Aug. 8 was $3.90, which is 30 percent higher than a year ago. The average price in California for a gallon of diesel is $4.07, up 28% than last year.
Lettuce acreage in Salinas and Santa Maria was purposely reduced during the summer months because schools are not in session and because of strong competition from seasonal melons, soft fruit and grapes at the retail level. This lighter production leaves less room for error should problems occur either in California or in the regional deals in Canada, the Midwest or along the East Coast.
Lettuce shippers were seeing persistent morning and evening fog that has produced an environment ripe for mildew, which can reduce yields. In such instances, harvesters are forced to slow their pace and remove affected leaves, a situation that can result in smaller heads and light weights. Shippers can also combat mildew by harvesting lettuce three to five days early and removing extra wrapper leaves to ensure healthy, clean lettuce. Shippers expect these conditions to persist through August.
Some of the larger shippers have been inundated with excess supply since late July, and the result has been very reasonable prices. The latest production estimates forecast the end of the glut and a return to normal levels. Shippers are expected to test moderately higher prices in the near term. However, light demand is curbing sales and will likely prevent the market from gaining any true momentum.
California's Central Coast leaf market remains in a similar situation as Iceberg lettuce, with summer plantings purposely held in check and the persistent fog pattern is beginning to reduce yields, particularly in Romaine lettuce. Shippers are a bit mystified that the excessive heat in the regional growing areas has not diverted demand back to the West Coast. The ongoing mildew issues will likely decrease production and tempt shippers to test moderately higher carton Romaine prices. Continued light demand is curbing sales and will likely prevent the market from gaining any true momentum.
Moderate production from California's Central Coast is being overshadowed by light demand. The bunch 14-count market is fairly steady from late July. Supplies of broccoli crowns, especially Asian cut, have decreased and the market is once again strengthening. Quality from Salinas and Santa Maria is excellent. Buyers in the Midwest and on the East Coast still have the choice of buying from Canada and Maine, in addition to California.
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 moderately higher for the lighter 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 will compete with California for U.S. market share through the summer months. The continuing heat throughout the Midwest suggests the possibility of celery demand switching back to California and sparking a market rally.
Strawberry production from Salinas and Watsonville is in a declining pattern. As expected, volume over the coming weeks will decrease further and shippers may soon be forced to prorate the larger orders. Buyers can also expect smaller-sized fruit. The hardier lots can still comfortably arrive back east with good shelf life. The market will continue to push higher through August. Receivers are encouraged not to get long despite the forecast of higher prices.
A quality variance has surfaced in Salinas and Watsonville. A two-tier market has developed and the better-known labels are commanding a premium. This trend will become more pronounced as September approaches.
Onion buyers now have another shipping district from which to choose and the list will soon expand. Washington state shippers now offer a combination of transplant and direct-seed onions. Colorado was expected to start the week of Aug. 15. and Huron, CA, and Las Cruces, NM, will continue through August and offer declining supplies into September.
The red onion market is strong and moving higher. New Mexico production remains minimal and California supplies are much lighter than in recent weeks. Washington state is just beginning reds but cannot compensate for the decline in California. Red volume from Washington state is expected to rise during the week of Aug. 15.
The jumbo yellow market is steady for now, but may possibly ease in the near term as Colorado starts the week of Aug. 15 and volume from Washington state should rise heading into mid-August. Some lots from California and New Mexico are only offering jumbo yellow 50 percent to 60 percent over 3.5 inches in diameter. U.S. No. 2 jumbo yellow onions are available in California for price-sensitive receivers.
Looking further down range, new-crop onions from Ontario, OR, are expected to start in late August or early September, and the bulk of the crop won't be harvested until after Sept. 10. The theme of the upcoming Northwest crop is "late and many unknowns" because of the cold spring and early-summer growing conditions.
The longer-term outlook indicates that the Navel crop is as many as three weeks late and will not start until the third week in November. Shippers must now reduce Valencia production in an effort to minimize the pending variety gap this autumn. Near-term prices are expected to nudge higher as shippers apply the brakes to production. Extra demand will soon shift to 88s thru 138s as schools reconvene. Overall quality is strong with good sugars.
Daytime temperatures in the Central Valley are expected to range from the upper 90s to 100 degrees through Aug. 16. Oranges are available for loading in the Central Valley and Oxnard. Oranges and lemons can load together in either district.
Offshore lemon volume has reached the tipping point and is influencing the overall market. Shippers expect near-term price relief on 140s and smaller. Current overall quality is strong. Patchy morning fog should continue in Oxnard through Aug. 16 with daytime highs in the upper 60s to low 70s. Lemons are available in Oxnard and the Central Valley, and can load with Valencia oranges. 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.
The Mexican Hass avocado season is essentially complete and will only offer 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 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. California cannot compensate for the production drop in Mexico.
Limited new-crop Chilean supplies are arriving on both the East Coast and the West Coast. Peru has received clearance to export Hass avocados to the United States. Supplies will arrive throughout August and total volume will be modest. The overall market is expected to remain quite expensive heading into late August.
The West Side melon season got off to a late start and offered very light volume in early to mid-July. Shippers struggled with undersized cantaloupes through the weekend of July 23.
Today's cantaloupe production has finally reached peak-season levels and should remain as such through most of August. The cantaloupe size profile is heavy to 9s and 12s followed distantly by 15s. The cantaloupe market is very reasonable and was expected to remain steady at least through Aug. 14. Honeydew volume is approaching mid-season levels and the market is firm at current levels. Honeydew sizes are heavy to 4s and 5s followed distantly by 6s. Sugars are good and the eating quality of today's fruit is outstanding.
The weather in Mendota, CA, remains sunny and hot, with daytime highs expected to be in the mid- to upper 90s through Aug. 16, with overnight lows in the low 60s.
(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)