California Romaine shippers were seeing demand drop off moderately, while lettuce shippers were experiencing steady and fairly modest demand. West Side melon shippers saw a brisk pull on Labor Day. Northwest onion shippers had fairly good demand on slowly rising production. Russet shippers said that heavy supplies far outpace demand.
Daytime temperatures in Salinas, CA, were expected to range in the low 70s through Sept. 11, with overnight lows in the low to mid-50s. Patchy morning and evening fog will persist into mid-September. The thermometer is beginning to stretch as the variance between the daytime high and overnight low lengthens.
In Mendota, CA, daytime highs were expected to range in the mid- to upper 90s through Sept. 11, with overnight lows in the low to mid-60s.
TRANSPORTATION & FUEL
Crude oil prices increased modestly Sept. 5 to $95.50 per barrel, which is 35 percent below record levels of July 2008. The nationwide average price for a gallon of diesel the week of Sept. 3 was $4.13, or 7 percent higher than one year ago. The average price in California for a gallon of diesel is $4.49, or 11 percent higher than last year.
Michigan celery quality is fair at best and several shippers are struggling to meet contractual obligations. Total production is noticeably below normal and shippers expect an early conclusion to their season.
West Coast celery growers purposely reduce their summer acreage so they don’t have to compete with the regional deals. California shippers simply don’t have the availability of product to cover an unexpected surge in demand. West Coast shippers say that Michigan’s subpar production diverted unexpected demand to California and pushed summer prices well above historical levels. California shippers sense that the pending early conclusion to the Michigan celery season will send another wave of demand to the West Coast and push celery prices even higher by mid-September.
California’s summer celery market had been split based on loading districts. Current celery demand is strong enough that Santa Maria and Salinas shippers are able to sell at similar levels.
California’s Central Coast shippers purposely reduce their leaf acreage during the summer because of competition from melons, grapes and stone fruit. Additionally, Canada and several U.S. regions offer home-grown leaf supplies from June through September.
The regional leaf deals in the Midwest and East Coast were hit with the hottest July since the Dust Bowl era. The regional leaf crops suffered from heat stress and below-normal production through much of the summer. West Coast leaf shippers received a strong increase in demand in July and most of August from parts of the country that normally rely on regional growing areas into late September.
Romaine prices have eased since Aug. 23 for two reasons: Quality at the regional level has improved and buyers will not pay the exorbitant freight rates from California until it is absolutely necessary. California shippers believe that regional buyers will make the final transition back to California leaf during the weeks of Sept. 10, 17 and 24.
Central Coast lettuce growers purposely reduce their lettuce acreage during the height of the summer season when West Coast melons, grapes and soft fruit are plentiful and dominate retail shelf space.
California lettuce shippers indirectly benefited from the hottest July in the Midwest and East Coast since the dust bowl era. Excessive heat damaged regional leaf supplies and diverted unexpected demand back to the West Coast. Buyers sought the more reasonably priced Iceberg lettuce when Romaine and Green Leaf prices soared in July and most of August.
Iceberg lettuce prices recently followed the easing Romaine market. The lettuce market is now expected to remain very reasonable and hold near current levels heading into the week of Sept. 10. The recent trend of moderately cooler overnight temperatures is welcom and should ensure good-quality lettuce heading into mid-September.
Looking down range, the Huron lettuce season will begin in mid-October followed by Yuma in late November.
Production from Watsonville and the Salinas Valley peaked in late July and declined as anticipated through August. Current supplies are 50 percent of the late-July peak and will continue to ease into mid- and late September.
Not all strawberries are equal and buyers must choose carefully. There is a wide range in price based on labels and whether the fruit loads in Salinas or Santa Maria. The thermometer is beginning to stretch as the variance between the daytime high and overnight low lengthens. These moderately cooler overnight lows are welcomed because they help produce firm fruit, which offers a longer shelf life. Buyers can expect small to medium-sized berries.
Shippers with the top-tier labels pushed the market higher through August and expect a trend of steadily rising prices through September. Oxnard will offer new-crop autumn fruit in early October and will be California’s primary hub by mid-October. The Salinas Valley harvest will continue until the first significant autumn rainfall.
Supplies along California’s Central Coast are in a downward cycle and the market is in the process of pushing higher. Shippers believe that prices will rise noticeably in the near term, then hold firmly at new levels heading into the week of Sept. 10. The availability of Asian-cut broccoli crowns has tightened considerably and prices have escalated quickly. Asian crown buyers are encouraged to plan well ahead. Quality remains strong despite the downturn in volume.
West Side melon shippers said that the Labor Day pull was bit late, but strong nonetheless. The current market is steady at current levels and was expected to hold into the week of Sept. 10. A full range of cantaloupe and honeydew sizes is available. The cantaloupe size profile is heaviest to 12s followed by 9s then 15s. Honeydews are heaviest to 6s followed by 8s then 5s. Melon quality remains excellent with good color, netting and sugar levels.
Daytime high temperatures were expected to range in the mid- to upper 90s through Sept. 11 with overnight lows in the low to mid-60s. Daylight hours are quickly shortening and temperatures will soon ease. There are just a few weeks until autumn melons and cantaloupes with a green cast.
The Valencia size profile remains uncharacteristically large for early September and will continue to gain size as autumn approaches. Supplies of small-sized oranges are scarce and demand far exceeds supply on 113s and 138s. Foodservice operators willing to switch to 88s will find a steady supply of fruit until the Navel crop begins in late October and offers small oranges.
It’s getting later in the summer season and the hot summer temperatures are back-flushing chlorophyll, which results in re-greening. This natural occurrence is cosmetic only and does not affect eating quality in the least.
California lemon supplies of 140s and smaller are good and overall quality is strong. Large lemons will remain tight until the Coachella Valley season begins in three to four weeks. California shippers are competing with ample supplies of offshore fruit arriving in several major ports. Buyers should be aware of the country of origin.
Onion acreage across the country is down 5.8 percent from 2011 and down 6.4 percent from 2010. The lion’s share of this season’s acreage is in Washington state (26 percent) and Ontario, OR (25 percent). The reduction from one year ago can be attributed to poor financial returns.
It’s early in the Northwest harvest, which will not be complete until mid- to late October. The front end of this season’s harvest suggests strong quality and somewhat disappointing yields. An Ontario, OR, salesman recently stated, “There are so many twists and turns ahead of us that it’s very difficult to take today’s early returns and form any concrete conclusions about the crop in the ground.”
Growing conditions now through late October will certainly influence the final tonnage in storage. Shippers are keeping a watchful eye on near- and long-term export demand.
Initial reports suggest that Washington state shippers will enjoy above-average export business through the spring season. This would be good news for Ontario, OR, shippers because they wouldn’t necessarily have Washington state shipper climbing over their shoulders and competing for domestic market share.
There are simply too many variables and unknowns to broad-stroke this year’s onion crop. That being said, there is a greater chance of fewer storage supplies this season and increased export demand, which together suggest higher returns compared to 2011.
The near-term market can be viewed as fairly steady and receivers can buy with confidence that the market holds only modest downside risk.
A strong buyer’s market is expected to persist far into September. An Idaho salesman recently summed up the current russet market, saying, “Too many acres, good yields and the fear we’ve outproduced our cellars.” Another Idaho salesman added, “I don’t wish harm to anyone, but we may need a hard, early freeze in October to thin the crop and give us any hope of decent returns.”
Shippers are running new-crop russets in Washington state, Oregon, Idaho, Colorado, Wisconsin and regional areas, including Kansas and Nebraska. Shippers are harvesting russets today that cannot go into storage.
Production is high from all areas and shippers collectively are outproducing demand. The current market is very attractive with very little, if any, downside risk. Once the crop is in storage in mid- to late October, growers will close the cellar doors and attempt to raise the market by throttling back the pace of packing.