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Fresh Directions

Salinas lettuce shippers are seeing falling demand in direct proportion to the rise in production of California melons, grapes and stone fruit. California and New Mexico onion shippers were seeing steady and good demand, and Idaho russet shippers were experiencing continued modest carton demand.

In Salinas, CA, the inconsistent weather pattern continues.  Daytime highs recently fell from the low 80s to the mid-60s, and were expected to rise again into the mid-70s the weekend of June 16. Daytime highs should return to the mid-60s starting June 18. Overnight lows are expected to range in the low to mid-50s.
Daytime highs in Bakersfield, CA, were expected to remain in the mid-90s through June 15 before pushing into the low 100s June 16-19. Overnight lows were forecast to remain in the mid-60s through June 15 before moving into the low 70s through June 19.

Demand for trucks and the cost of freight continue to rise.  Peak demand will occur from late June to early August.
Crude oil prices fell 78 cents on June 13 to $82.55 per barrel, which is 44 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of June 11 was $3.78, or 4 percent lower than a year ago. The average price in California for a gallon of diesel is $4.07, or 4 percent lower than last year.                  
The inconsistent weather pattern dating back to late March has created an unusual roller coaster pattern in California’s lettuce production. The ebb and flow in supply created the high lettuce market in mid- to late May followed by today’s drop to very  reasonable levels. Shippers believe summer lettuce supplies will be more consistent heading into the latter portion of June and mid-July.
Demand for lettuce is falling in direct proportion to the rise in production of California melons, grapes and stone fruit.  Accordingly, Central Coast lettuce growers purposefully reduce their lettuce acreage during the height of the summer season.  This, however, leaves less room for error. For the sake of discussion, lettuces would rebound and stay high if the cold temperatures experienced in the spring were to continue into the summer months.
For now, the near-term lettuce market was expected to remain reasonably priced and should offer high-quality product heading into the week of June 18.
Ample leaf acreage in the Salinas Valley has more than compensated for yield decreases and/or quality concerns since the season began in mid-April. The result has been a steady stream of very reasonable prices over the past two months.
As with Iceberg lettuce, Central Coast shippers reduce their leaf acreage during the summer because of competition from melons, grapes and stone fruit. As well, Canada and several U.S. regions offer local leaf supplies during the summer.  
As it invariably happens, the regional leaf deals will experience excessive hot spells during the summer months. When this occurs, leaf demand suddenly and unexpectedly swings to the West Coast and sends Romaine and Green Leaf prices higher in a hurry.
For now, the near-term leaf market should remain very reasonable heading into the latter portion of June.
Production in Watsonville and the Salinas Valley will reach its season’s peak between the weeks of June 25 and July 9.  Shippers believe supplies will be good for retailers and foodservice distributors to highlight California strawberries for the Fourth of July.    
Buyers must choose carefully because not all fruit is equal.  There is a wide range in price based on labels and whether the berries load in Salinas or Santa Maria. Truck rates are very expensive and climbing, so Santa Maria shippers must be creative to lure orders and trucks away from the Salinas Valley.   
The top strawberry labels are selling out every day and are subject to proration. At the other end of the spectrum, some labels are not worthy of East Coast destinations and are discounted in the western markets. In general, the current range in price and quality were expected to hold steady heading into the week of June 18.     
Weather in the Salinas Valley has been cool and inconsistent since the broccoli season began back in early April. Uneven weather patterns tend to produce peaks and valleys in supply.  At the moment, Salinas Valley and Santa Maria broccoli shippers are suffering from a substantial drop in production, which is expected to continue well into the week of June 18.  While overall production is light, Asian cut broccoli crown supplies are practically nil and buyers are challenged to locate product. Receivers can expect today’s high broccoli market to carry well into the latter portion of June.           
The Salinas celery season is underway and initial supplies are ample. Quality is excellent and the market is very reasonable.  This is a wonderful time to highlight new-crop celery from the Salinas Valley.
Buyers can load in three different California districts. Oxnard will continue to offer dwindling supplies until its 30-day soil moratorium begins July 15. Santa Maria and the Salinas Valley will offer celery through the Thanksgiving holiday rush.
Truck freight rates are very expensive and foodservice buyers are focusing their purchases in the Salinas Valley. Shippers to the south in Santa Maria and Oxnard must be creative to lure trucks and orders away from Salinas. Buyers willing and able to load celery directly in Oxnard and Santa Maria will find discounts into early July.  
Valencia production is finally rising after a slow start dating back to late April. The Navel season is finally over, which means harvest crews can focus on Valencias. There is a wide array of Valencia sizes from ranch to ranch, hence shippers will be heavy one day to 113s and 72s a few days later. One constant is the excellent quality of the crop, which is resulting in a high percentage of fancy grade fruit. Choice buyers are advised to plan ahead. The availability of Choice fruit will rise to normal levels when the Oxnard and Riverside harvest begins between June 18 and June 25.  
Oxnard growers have harvested 55 percent of their crop, and  overall quality is excellent. A full array of sizes in both grades is available. Seasonal lemon demand is strong, and buyers should expect lemon prices to possibly rise heading into late June.      
The onion industry has completed the transition from the Imperial Valley in California to Huron, CA, and Las Cruces, NM.
New Mexico shippers initially have good quality but a mixed bag of sizes. The hailstorm a few weeks ago wiped out 7 percent of the total New Mexico acreage and damaged an untold number of additional acres. How well these damaged fields recover is just beginning to unfold as evidenced by an unusually wide range in medium yellow prices.
To add to the confusion, West Texas shippers are flooding certain U.S. markets with heavy medium yellow supplies that are below market prices. The New Mexico jumbo yellow market is firm at current levels with only modest adjustments when shippers trim prices to compete on a delivered basis with California. Buyers need to know New Mexico Colossal and Super Colossal sizing is below par.         
Shippers in Huron, CA, have good yellow and red onion quality with fairly typical sizing. Some shippers are seeing that sales are brisk one day and quiet the next. Buyers with jumbo red orders in-hand should take a extra look at California onions.
Assuming equal quality, the summer onion market boils down to delivered prices between California and New Mexico. The preferred mode of transportation is a flatbed truck, which allows the highway wind to whistle through the load and keep the respiring onions dry. A seasoned driver will fold the ends of the tarp toward the middle of the load during dry weather and cover the entire load when there is a chance of rain.     
The 2012-13 crop was planted two weeks early in the Northwest and shippers anticipate the harvest will start two weeks ahead of schedule. Armed with this knowledge, process buyers are sitting on their hands. They can slow down their purchases of the old crop and access new-crop russets two weeks ahead of schedule this summer.
In other words, shippers are losing two weeks of processor sales and that extra volume is essentially flooding the fresh market with excess supply.
The carton market is weak. Prices are low and show no sign of increasing any time soon. Today’s buyer’s market is expected to continue through much of the summer. There is no hurry to buy russet cartons except for inventory replacement.