Market Trends : Week of January 18, 2016

Note:  We are in the fifth week of severe supply shortages on several dry vegetable commodities.  Hardest hit again this week are tomatoes, yellow squash and zucchini.  Bell pepper is also critically short this week.  Recent weather in the east and west continues not to cooperate and has not helped us to recover.  The weather in the east continues to be much cooler, cloudier and wetter than normal.  It was raining again Tuesday with temperatures in the 50s. Mexico continues to see much cooler than normal temperatures.  Many are attributing these weather patterns to El Nino which has been well documented in the mass media. The past and current weather conditions this winter growing season are causing supply shortages which continue exert pressure on FOB prices and causing orders to be pro-rated.  If the weather continues the current pattern, abnormal markets of some commodities may last into February.  Acts of God Clauses and Trigger Price Points of contracts continue to be in place.  As is almost always the case during supply shortages caused by weather events, quality and the shelf-life of product will suffer.  We strongly recommend that inventories be kept as close as possible.

 

Tomatoes

East

·      Rounds- The weather continues to take its toll on tomato yields out of eastern fields. Supplies are critically short and sizing is even on the smaller side this week as growers are in second and third pickings of old fields as we continue to await fruit in the newer fields to mature. The small sizing has caused the FOB prices of the 6x6 and larger to increase while the price of 6x7s has fallen again this week.  This is causing a much wider than normal spread in the price of the various sizes.  If sizing is not critical to a customer, it may be wise to direct them to the smallest size that they can utilize.  Quality and shelf-life are variable and suspect.  It may be February before volume out of the new fields in the east is sufficient to appreciatively put downward pressure on FOB prices.  The Mexican crop is also behind but should precede the east with volume and we expect the west to be the first to begin to put downward pressure on national FOB prices.

·      Romas- Romas, which have been the tightest of all tomato commodities over the past several weeks, are one source of good news in an otherwise bleak market report.  Supplies of romas remain tight in the east but the increased volume from MX has caused the FOB prices on both coasts to fall.  FOB prices have fallen $8-$10 in the east as a result of the increased supplies from the west.

·      Grapes- Supply and demand are pretty much in equilibrium causing FOB prices to remain generally steady from last week.  We are beginning to see some downward pressure on FOB prices.  Quality is fair to good; shelf-life is suspect.  

·      Cherries- FOB prices are slightly down compared to last week.  Quality is variable.

·      Weather forecast-  Immokalee- Mostly cloudy skies will continue into next week with rain forecasted for Thursday, Friday and Sunday.

 

West/Mexico

·      Rounds- Vine-ripes are crossing at McAllen and Nogales.  Supplies are slowly increasing but will not approach normal levels for at least 10 more days. Demand is currently good and the level of demand will be a large factor on how FOB prices will react in the next week or two.  We are seeing some quality issues primarily in the form of skin defects.

·      Romas- As mentioned above, the Mexican roma market is the one bright spot this week as supplies continue to increase and FOB prices are down again on all sizes.

·      Grapes- Grapes are crossing primarily at Nogales.  After falling last week, FOB prices are higher this week as supplies become tighter due to cooler weather.  Quality continues to be variable.

·      Cherries- Slight increases in supplies continue to put slight downward pressure on FOB prices.

 

Green Bell Pepper

East- Due to adverse weather, the supply of bell peppers in the east has reached critical levels. FOB prices are up sharply compared to last week.  Quality and shelf-life continue to be a concern as growers continue to report issues from bacterial pressure to bruising.  Accordingly, inventory levels should continue to be kept as tight as possible

West- FOB prices are much higher again this week as the cool weather has caused a decrease in supplies.   Demand is good.  Quality is generally good.

 

Yellow Squash

East- Supplies remain extremely tight to non-existent and not near enough to meet demand.  Homestead is the primary growing region and their acreage is down.  FOB prices remain high with continued upward pressure for both medium and fancy grades. Quality and shelf life is variable and generally fair at best.

West- The cold weather did more damage to the yellow squash crop than any other dry vegetable commodity.  It will affect the volume of supplies through February.  FOB prices remain high this week and are expected to remain high for the rest of the month.  Crossings continue at Nogales.

 

Green Squash

East- Supplies are tight again this week and FOB prices remain high.  Large sized squash continue to be extremely tight.   Quality and shelf-life is variable and suspect but is better than the yellow squash.

West- Crossings continue at Nogales.  Supplies are down sharply due to the cool weather and prices are much higher.  Quality remains generally good.

 

 Green Beans

Demand is still good and pricing has come off in Florida and Mexico.

 

Cucumbers

East- Our domestic crop has ended. The off-shore Honduras product continues to unload.  The quality of the off-shore product continues to be good. FOB prices are generally steady with upward pressure.

West- Product continues to cross at Nogales.  Supplies are down and FOB prices are higher this week.

 

Eggplant

East- FOB prices are slightly higher again this week on both grades. Quality of eggplant remains generally good.

West- FOB prices are moderately higher this week as the cold weather has slowed harvesting.

 

Jalapenos

East- FOB prices are steady to higher this week due to increased demand and limited supplies

West- FOB prices are slightly higher this week.  Quality remains good.