Berry business on cruise control, stressful grape market
By
Ira Greenstein, owner of Direct Source Marketing
Berry business on cruise control, stressful grape market
California strawberry business continues to muddle along as retailers have put their focus on other commodities. Overall quality is still very inconsistent, so that’s another reason retailers have put berries to the back of the produce department. Fruit quality will start to improve over the next seven to 10 days as growers start harvesting more summer Portola variety. We could see strawberries back on promotions once Northwest cherries finish by the middle of August.
For now, the spot market ranges from a low of $10 to a high of $14, with the mostly market swinging between $11 and $12 FOB. Berry business will remain on cruise control, with very little change to the markets until September. Once quality and demand improve, we could see the spot markets firm back to $14 FOB, and then we will see that steady increase of pricing through the fall months.
Cherries
Northwest cherries are now in the hands of just a select few growers. The spot markets have adjusted significantly higher over the past 10 days and prices will continue to go higher through the balance of the deal. Washington 18# 10 row are being quoted at $42.95 and higher, 9 row and larger at $48.95 to as high as $56.95 FOB, depending on region and size. British Columbia is shipping a fair amount of fruit, with 10 row and larger being quoted at over $60 per box.
There remains some value for smaller cherries from British Columbia, as the 11-row market is ranging from $36 to as high as $42 FOB, this week. We typically see prices for 10 row and larger from British Columbia top $70 by the middle of August, but there could be some consumer cherry fatigue that could make it challenging for retailers to keep selling cherries at $4.99 to $5.99 per pound. Overall quality from British Columbia is very good, so at the very least consumers who do choose to keep buying cherries, should have a positive experience.
Table Grapes
What a difference a year makes. Last year at this time, the state of California had already tallied more than 20 days of temperatures that exceeded 110 degrees. Crews had only been able to pack four to five hours a day, and cold storages were barely full, as marketers struggled to meet the demand of their contracted programs. Earlier this week, coolers were almost at capacity.
Crews have been packing six to seven, eight-hour days and growing conditions have been ideal. Warm days followed by cool nights have pushed the natural color on red seedless and sugar levels on green are forcing growers to harvest or potentially lose fruit.
Certain varieties are better off storing on the vine as opposed to being packed, but that will only hold off the inevitable for a few weeks. Some growers have already started packing in totes, in hopes that the business will improve and they can pack the fruit later in the month or even hold the fruit until mid-September. All of this adds up to a very stressful market situation and growers have dropped the spot markets considerably in hopes of sparking some well-needed movement.
Red Seedless
Grape growers in Arvin, CA, will have an ongoing problem if Mexican proprietary varieties continue to bleed well into July as they have this season. Mexican Sweet Celebrations are still on many retail shelves, leading to lower demand for Arvin Flames. The Flame crop this year has also not sized well, so many marketers have found it very hard to find good homes for small red grapes. Currently, the Flame spot market ranges from $14.95 on medium, $16.95 for large and $20.95 to $22.95 for what limited XLG fruit remains.
Growers are now starting to harvest Scarlet Royal and Krissy, so once consumers get a taste of some bigger, better fruit, we could see movement improve. Currently, Scarlets and Krissy are being quoted at $24.95 to $25.95 FOB, but we could see those prices drop as more volumes come online.
Green Seedless
Volumes of California green seedless are stacking up in the Central Valley cold storages, as harvests are completely out pacing sales right now. Retail promotions are just starting to kick in, but it’s too late to change the existing challenge that growers face. Perfect growing conditions have pushed volumes up and some growers are packing Autumn Crisp, which would be three to four weeks ahead of schedule. Many growers are packing green seedless into totes and will look to pack that fruit once their inventories are back under control.
For now, deals are being made on some aging lots and B box quality fruit. The mostly market for premium XLG fruit ranges from $22.95 to $24.95 FOB, but there are shippers dealing off those prices as well. We will need to see a significant change in consumer buying habits or it could be a very long season for California grape growers.
Ira Greenstein, owner of Direct Source Marketing, has 25 years of experience in the fresh fruit import and distribution industry. Direct Source Marketing is a premiere direct importer and forward logistics distributor of fresh table grapes and stone fruit to the wholesale, retail and foodservice industries.