Tanimura & Antle Newsroom

March 30, 2017

Straight Talk: Weeks 14, 15, 16

SUPPLY FORECAST 4/03/17 through 4/22/17
(Weeks 14, 15, 16)

 

 

 

 

 

 

 

 

 

 

We have just begun what figures to be the most challenging Transition in recent memory. Our daily vocabulary has migrated from the all too familiar 2016 terms of “over supply” and “promotable volumes” to the far more alarming terms of “production allocations,” “prorates,” and “gaps.” Balancing customer service expectations with the harsh realities of Mother Nature has stressed grower/shippers and customers alike. Fields in the Sonoran Desert Valleys are finishing well ahead of schedule. Most commodities are finishing between 7-14 days early, creating gap concerns that growers are attempting to mitigate via pushing fields beyond acceptable maturity targets and breaking fields earlier than normal in the north.

While production in the desert has come to an early and abrupt end, Huron and Salinas cannot start fast enough. Many grower/shippers attempt to transition directly from Yuma to Salinas. Tanimura & Antle’s significant Huron land base and irrigation infrastructure investments serve as an important point of difference between us and most of our competitors. Huron plantings decrease our susceptibility to gaps in production during this period. Quality will significantly improve as we bid farewell to the heat and mildew damage that continually hampered the Yuma season. Size and weight concerns coupled with typical springtime bug pressure will become the primary areas of focus for our QC team. Initial harvest estimates are significantly lower than budgeted levels — a direct result of an unrelenting wet and cold California winter. “Reaching” into fields that, by normal standards, are not considered ready to harvest, will contribute to diminishing yields and extend availability issues.

Most of January and February were planted between rain events, during very short windows. The ability to prepare the ground and plant according to schedule was considerably reduced. This has created a roller coaster effect to forecasted volumes and increases the likelihood of future supply disruption. Some plantings were also moved to less favorable locations due to wet field conditions which can also negatively affect yields. It’s difficult to measure the degree to which the planting disruptions will affect overall availability, but there is no doubt that holes in production will continue to manifest through the month of April and beyond.

Demand exceeding supplies has translated into sustained market increases for all commodities making promotable volumes non-existent. Communicated product allocations are routinely changing, and are sure to fall short of what we would consider acceptable levels during this period. Volatility in supply is inevitable and communication and collaboration between Grower/Shippers and our Customers are the keys to navigating the associated turmoil as productively as we can.