Daytime temperatures in Salinas, CA, were in the mid 70s leading up to Aug. 18 then were expected to ease into the mid- to upper 60s through Aug. 23. Overnight lows will hover in the mid 50s. Patchy morning fog and sunny afternoons will persist into late August.
In Mendota, CA, daytime temperatures were expected to be in the mid- to upper 90s through Aug. 23 with overnight lows in the low 60s.
Northwest russet shippers were seeing good demand for new-crop Norkotahs. Salinas row crop shippers continued to experience modest demand on many key items. Strawberry shippers said that demand remained strong for the premium lots and labels.
TRANSPORTATION & FUEL
Truck availability on the West Coast is adequate, and freight rates were expected to begin to ease in September. The price of crude oil increased modestly Aug. 17 to $87.57 per barrel, which is 40 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of Aug. 15 was $3.84, 29 percent higher than a year ago. The average price in California for a gallon of diesel is $3.96, 24 percent higher than last year.
Lettuce acreage in Salinas and Santa Maria is typically reduced during the summer months because schools are not in session and there is strong competition from seasonal melons, soft fruit and grapes at the retail level. This lighter production means there is less room for error should problems occur either in California or the regional deals in Canada, the Midwest or along the East Coast.
The persistent morning fog followed by sunny afternoons has produced an environment ripe for mildew. In August, many fields have suffered from varying degrees of mildew. In some instances, harvesters are forced to slow their pace and remove affected leaves, which can result in smaller heads and lighter weights. Shippers also combat the mildew by harvesting lettuce three to five days early and remove extra wrapper leaves to ensure healthy, clean lettuce. Shippers expect these weather and quality conditions to persist through August.
Light lettuce demand over the past several weeks has overshadowed most production issues. Most shippers are seeing their current production levels close to budget and the continued light demand makes it seem as though they have excess volume. The lettuce market was expected to remain very reasonable heading into the week of Aug. 22.
California's Central Coast leaf market remains in a similar situation as Iceberg lettuce. Summer plantings are purposely down and the persistent fog pattern is beginning to reduce yields, particularly in Romaine lettuce. Shippers remain mystified that the excessive heat in the regional growing areas has not diverted demand back to the West Coast. The ongoing mildew issues are decreasing production and some shippers have recently tested slightly higher Romaine and Green Leaf prices. Continued light demand will continue to curb sales and prevent the market from gaining any true momentum.
California broccoli shippers continue to compete with Canada and Maine for market share in the Midwest and along the Eastern Seaboard. Overall supplies outweigh demand and the overall market is reasonably priced. Recent production fluctuations in California have had little effect on the overall market. Production from California is somewhat lopsided towards bunch 14s, which is placing a higher-than-usual premium on Asian cut broccoli crowns. Quality from Salinas and Santa Maria is excellent.
Salinas Valley and Santa Maria shippers continue to offer ample supplies of high-quality celery. The size profile remains heaviest to 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 will compete with California for U.S. market share through the balance of the summer. The combined supply from Michigan and California currently outweighs demand and has created very reasonable prices. The market was expected to remain steady heading into the week of Aug. 22.
Strawberry production from Salinas and Watsonville remains in a declining pattern. Volume over the coming weeks will decrease further and shippers will likely be forced to prorate the larger orders. Decreasing production this time of year brings smaller-sized fruit, which will count 22 to 24 per one-pound clamshell.
The hardier lots can still comfortably arrive back east with good shelf life. The market has increased noticeably since late July and will push even higher through the remainder of August. Receivers are encouraged not to get long despite the forecast of higher prices.
A quality variance has surfaced in Salinas and Watsonville. A multi-tier market has developed and the better-known labels are commanding a premium. This trend will become more pronounced as September approaches.
New-crop russet Norkotahs are available in Idaho, Washington and Colorado. Shippers are still getting up to speed and not all packingsheds are on line yet. For the most part, the early-season crop is leaning heaviest to 80s, 90s and 100s. Mixer quantities of the large carton counts are available. Ten- and six-ounce No. 2s are very limited. Early-season quality is strong with minimal, if any, skinning.
The market is firm on the large cartons and No. 2s. There is some degree of play in the 80s, 90s and 100s. Generally speaking, the market was expected to hold fairly steady and then gradually relax the weeks of Aug. 22 and Aug. 29 as more shippers enter the mix and total production increases. Looking further down range, the russet Burbank harvest will start in early September.
Onion buyers have four different districts from which to choose: California, New Mexico, Washington and Colorado. Ontario, OR, and Utah remain a few weeks away and will offer onions in early September. California will continue to offer onions into mid-September, while New Mexico will complete its season in late August.
There are lots of moving pieces and it can be difficult to stay on top of the markets in all areas. Generally speaking, the near-term jumbo yellow market is expected to hold fairly steady near current levels. The jumbo red market is firm and fairly tight. New Mexico volume remains light, and California production is far less than it was two weeks ago. Washington is not yet ready to compensate for California's decline.
Looking ahead, the bulk of the Ontario, OR, crop will not be harvested until after Sept. 10. The theme of the Northwest crop remains "late and many unknowns" because of the cold spring and early-summer growing conditions.
The long-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 reduce Valencia production today and spread the remaining supplies over a longer period of time. Near-term prices will nudge higher as shippers apply the brakes to production. Extra demand is shifting to 88s through 138s as schools reconvene. Overall quality is strong with good sugars.
Oranges are available for loading in the Central Valley and Oxnard. Oranges and lemons can load together in either district. Daytime temperatures in the Central Valley were expected to range in the upper 90s through Aug. 23, with overnight lows in the mid 60s.
Offshore lemon volume has reached the tipping point and is influencing the market. The overall quality in California is good, however a few lots are beginning to fade. Receivers may want to consider switching from Choice to Fancy grade fruit. Quality will improve in October with the start of new-crop lemons in the desert.
Looking ahead, production of the desert crop could be down as much as 50 percent due to the February freeze. Lemons are available in Oxnard and the Central Valley, and can load with Valencia oranges. Patchy morning fog was expected to continue in Oxnard through Aug. 23, with daytime highs in the low to mid-70s.
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 quality is excellent, with Brix levels between 10 and 12, and production is at the season's peak. Melons have a full slip, high netting and a golden straw color. The size profile is heavy to 9s and 12s followed by 15s and distantly 18s. The cantaloupe market is very reasonable and was expected to remain steady into the week of Aug. 22.
Honeydew volume has finally peaked and the market remains firm at current levels. Honeydew sizes are heavy to 4s and 5s followed by 6s. Brix levels are 12 to 14, and the eating quality is outstanding.
(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 )