Desert row-crop shippers report modest to moderate demand on most key items. Oxnard celery shippers report brisk demand on light volume. Northwest onion demand is strong and the market continues to have a very strong undertone. Russet supplies far outpace demand.
Desert temperatures have consistently been above normal since the winter lettuce season started in mid-November. Lettuce fields in Yuma, AZ, are maturing ahead of schedule and shippers are collectively struggling with excess supplies. Lettuce quality is outstanding and today’s market cannot decline any further.
Experienced buyers know production gluts don’t last forever and are usually followed by equal and opposite gaps. Lettuce shippers foresee a pending production decrease beginning the week of Dec. 17.
Shippers will no doubt seize the opportunity and attempt to push prices higher.
We are quickly approaching the winter solstice and the shortest daylight days of the winter season. Mid-December through mid-January is usually the time of year for the desert to experience overnight freezing temperatures. It’s entirely possible the pending production may be coupled with a cold spell. If so, the lettuce market will have the necessary ingredients to rally and push well off today’s floor. Shippers and receivers should keep a close eye on the weather through January.
The leaf lettuce market is in lockstep with the Iceberg market. Warm desert temperatures and ideal growing conditions have resulted in a slug of excess product. Current quality is excellent and prices are rock-bottom. When the leaf market changes and it eventually will, there is only one direction for prices to move up.
Shippers foresee a production drop beginning the week of Dec. 17.
The leaf markets would increase noticeably if a cold snap coincided with the pending volume decrease. All eyes will be on the weather forecast now through January.
Oxnard is currently the primary growing area on the West Coast and is supplying the vast majority of the nation’s celery. Shippers are struggling to balance brisk holiday sales and below normal production.
Growers are packing celery today that was planned to be harvested 10 to 12 days from now. Shippers are reaching ahead in order to meet the current holiday demand and capture today’s strong returns. An Oxnard salesman recently stated, “We’re robbing Peter to pay Paul when we reach so far into the harvest schedule. We’re digging a hole from which will we won’t soon recover. The phone traffic is heavy as buyers secure their holiday needs and shippers try to buy celery from one another.” Buyers can expect rising and expensive celery prices to persist through much of December.
Five weeks into the Navel season and shippers have excess supplies of small oranges. What a difference a little over one month can make. Buyers struggled in October to procure adequate supplies of 113s and 138s, and today shippers are struggling to keep their floors clean. Current quality is excellent and prices are reasonable. The recent series of storms had little effect on the harvest or availability. The size profile will gradually increase as the spring approaches.
The winter broccoli deal is four weeks into the season and temperatures have been above normal from the start. Fields have been maturing ahead of schedule and shippers have been inundated with excess supplies since late November. Current quality is excellent and prices are very reasonable.
Buyers should take advantage of today’s ample supply of Asian crowns.
Shippers know there is a gap for every glut and today’s heavy volume will sooner or later give way to a production shortage. Shippers sense production may retreat as early as the week of Dec. 17 and the industry will once again face limited availability. The pending production decrease would be extenuated if the production drop is coupled with freezing overnight temperatures. After all, the winter solstice is just a short while away and this is the time of year the desert can experience cold spells.
The bullish tone of this report cannot be overstated. Low yields, unfilled cellars and strong export demand have combined to create a strong seller’s market. Northwest shippers are sitting on their hands and minimizing production. They want to stretch the light crop and believe returns will be considerably higher during the winter months.
Washington state shippers report above normal export sales to Asia.
Ontario, OR, shippers will benefit indirectly from strong export sales because they wouldn’t necessarily have Washington state shippers climbing over their shoulders competing for domestic market share.
The near- and long-term onion market is supply-driven and will continue to strengthen over time. We may face a runaway market beginning in January or February. Buyers should assume replacement costs will be higher with each new order.
Trucks are currently very limited due to the Christmas tree pull and lead time is essential to secure transportation. Railex is a good option.
The 2012 Northwest crop is plentiful and has lots of size. The harvest is complete and shippers now have the option of packing or keeping russets in storage. Shippers should adhere to a scheduled release program or risk being caught with excess storage supplies later in the shipping year.
Idaho demand is strongest on 80s and smaller simply because these cartons are not prevalent in the size profile. Foodservice operators will see the price point on the largest carton counts and retailer consumers will see large bulk displays.
Prices for large russets (70s and larger) will remain very attractive into the new year and noticeably lower than 80s, 90s, 100s and 120s. The near-term carton market will hold near current levels. Some Idaho shippers do not foresee noticeable price increases until the spring.
The lemon harvest continues in Coachella and Yuma. Overall quality is excellent and shippers have decent supplies of most sizes.
Buyers can load in the desert, Riverside or the Central Valley, where shippers are packing lemons transferred in bulk from the desert.
Bill Armstrong is a self-employed produce broker who operates Armstrong Marketing in Salinas, CA. He may be reached by phone at 888/484-0800 or by email at ArmstrongMarketing@-comcast.net.