Daytime temperatures in Salinas, CA, will range in the upper 60s to low 70s through Sept. 6 with overnight-lows in the mid-50s. Patchy morning fog and sunny afternoons will persist into early September.
Daytime temperatures in Mendota, CA, will range in the low to upper 90s through Sept. 6 with overnight lows in the low to upper 60s.
Strawberry shippers report strong demand for the premium lots and labels. Northwest russet shippers report good demand for new-crop Norkotahs. Salinas row-crop shippers report continued modest demand on many key items.
TRANSPORTATION & FUEL
Truck availability on the West Coast is adequate. Freight rates should begin to ease after the Labor Day pull.
The price of crude oil fell modestly August 31st to $88.75 per barrel, which is 40 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of August 29 is $3.82 and 30 percent higher than one year ago. The average price in California for a gallon of diesel is $3.96 and 26 percent higher than last year.
Summer plantings are purposely down and the persistent fog pattern is reducing yields, particularly in Romaine lettuce. The ongoing mildew issues are decreasing production, and some shippers have recently tested modestly higher Romaine and green leaf prices.
California shippers sense Hurricane Irene harmed leaf supplies in New Jersey, but the degree of damage remains unknown. Shippers wouldn’t be at all surprised if demand from East Coast buyers suddenly swings back to California. Buyers should expect the unexpected and the possibility of quickly rising Romaine and green leaf prices.
California’s Central Coast Iceberg market is in a situation similar to leaf lettuce. Lettuce acreage in the Salinas Valley and Santa Maria is purposely reduced during the summer months because of the competition from regional growing deals in Canada and in the east. As well, there is strong competition for retail space from melons, grapes and soft fruit.
The chronic pattern of morning fog followed by sunny afternoons has produced an environment ripe for mildew. Many lettuce fields in August suffered varying degrees of mildew. In some cases, growers have been forced to disc entire fields due to low quality. In many instances, harvesters are forced to slow their pace and remove affected leaves, which can result in smaller heads and lighter weights. Shippers can also combat the mildew by harvesting lettuce three to five days early and removing extra wrapper leaves to ensure healthy, clean lettuce. Buyers should expect these trends to continue well into September.
Light lettuce demand over the past several weeks has overshadowed most production issues. Shippers are beginning to sense that the light demand will not be able to mask the increasing quality concerns on the West Coast. The market has been rock-bottom for several weeks and frankly cannot drop any further. Buyers should expect looming supply issues to test higher prices in early September.
September will prove to be a significant procurement challenge for buyers. Strawberry production from Northern California has dropped 33 percent to 50 percent since early August. Shippers are perplexed because this steep decline typically occurs in mid- to late September. The Oxnard crop in Southern California will not be in position to pick up the slack until late September or early October. Buyers should brace for tight supplies, prorated orders and rising prices through much of September.
A noticeable quality variance exists in the Salinas Valley, and the best fruit is commanding a premium. Buyers must be diligent and select the hardier lots, which can arrive on the East Coast with adequate shelf life. Receivers are encouraged not to get long despite the forecast of rising prices.
California broccoli shippers continue to compete with Canada and Maine for U.S. market share in the Midwest and along the Eastern Seaboard. Overall, broccoli supplies outweigh demand and the market is reasonably priced. Production of Asian-cut broccoli crowns has increased in California, and shippers once again offer a nice blend of bunch and crown product. The overall market was expected to hold fairly steady heading into the week of Sept. 5. Quality from Salinas and Santa Maria is excellent.
Once again, little change. 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 summer months. 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 Sept. 5.
The current snapshot of Idaho’s Norkotah crop consists of light yields and small sizes. Yields are only 275 to 300 cwt. per acre instead of the expected 350-400 hundredweight per acre. Overall sizes are leaning heaviest to 90s and 100s followed by 80s. Buyers will pay a hefty premium for 60s and larger, and any size No. 2 grade. Overall production is light as only 10 of Idaho’s 36 packingsheds are running.
An Idaho salesman recently stated, “Our yields are down and we’re blowing through our early season acreage ahead of schedule. There’s not a lot of size in the current diggings.” The state needs September to offer warm days and temperate night temperatures in order for the crop to play catch-up and finish with a good size profile. It’s conceivable the 2011 crop will have 60-count f.o.b. prices twice as expensive as 100-count.
Washington State is in a similar situation with light yields and smaller-than-usual sizing. Value-conscious buyers can find deals in Washington state on 90s and 100s.
Growers in Idaho and Washington state will be tempted to delay the vine kill in an effort to gain additional size. Such tactics increase the possibility of being confronted by an autumn freeze in mid-October.
Onion buyers have several growing districts from which to choose: California, Washington state and Colorado. A small trickle of Ontario, OR, onions have started, but shippers don’t expect to region to offer decent supplies until the week of September 12. Utah onions won’t really be a factor until mid-September. California will continue to offer onions into early and mid-September while the New Mexico season is essentially done.
There are lots of moving pieces and it can be a chore to stay on top of the markets in all areas. Late-season California onions are a storage variety and the quality of today’s yellows and reds is excellent. Jumbo yellows from California are 80 percent to 100 percent three-and-a-half inches and larger in diameter. Washington state production continues to rise with jumbo yellows closer to 60 percent over three-and-a-half inches. Red onion production is increasing in Washington state. California red shippers still have good supplies of reds and remain competitive.
A good portion of the Ontario, OR, crop won’t be harvested until after Sept. 10. The front end of the harvest looks fairly good and the middle looks OK. The last third of the harvest has some shippers and growers concerned. The crop got in late, and growing conditions during the spring and early summer were cool. The Northwest onion crop really needs extra “heat units” through the balance of the growing season. According to the National Weather Service, temperatures in September, and September through November will be “normal.” If this forecast is accurate, the latter portion of the onion crop could struggle to make size and growers may be tempted to prolong the harvest into late October or early November. Delaying the harvest increases the possibility of being confronted by an autumn freeze.
The upcoming Navel crop is at least three weeks late and will not start until late November. Shippers are reducing Valencia production today in an effort to spread the remaining supplies over a longer period of time and minimize a variety gap in November. Shippers will be forced to reduce production even further as we approach October and November. The looming decline in production will pinch prices higher during the early autumn. Fruit being harvested today has been hanging on the trees through the summer heat and is beginning to show varying degrees of softness. Oranges are available for loading in the Central Valley and Oxnard. Daytime temperatures in the Central Valley were forecast to range in the mid- to upper 90s through Sept. 6 with overnight lows in the mid- to upper 60s.
California continues to offer good lemon supplies and a wide selection of sizes from Oxnard. It is approaching late season and the percentage of choice-grade fruit is on the rise. The price gap between fancy- and choice-grades will widen into late September. Quality will improve in October with the start of new-crop lemons in the desert. Production of the desert crop may be down as much as 50 percent due to the February freeze. Patchy morning fog was expected to continue in Oxnard through Sept. 6 with daytime highs in the low to mid-70s.
West Side cantaloupe shippers were temporarily plugged with excess production leading up to the Labor Day pull. Cantaloupe production fell considerably just as the holiday pull began and the market has noticeably reacted higher.
Shippers that were packing 25,000 to 30,000 cartons of cantaloupes per day the week of Aug. 22 have fallen to just 10,000 to 12,000 per day. Cantaloupe nine-count and 12-count prices, which were rock bottom the week of Aug. 22, are noticeably higher and have the potential to run further the first week of September. Prices on 15-counts are currently steady.
Today’s cantaloupe quality remains excellent with Brix between 10 and 12. Melons have a full slip, high netting, and a golden straw color. The size profile is heavy to 9s and 12s, followed by 15s then distantly 18s. Honeydew volume is down moderately and the market remains firm at current levels. Honeydew sizes are heavy to 4s and 5s, followed distantly by 6s. Brix 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 ArmstrongMarketing@comcast.net)