SUPPLY FORECAST 2/4/17 through 2/18/17
(Weeks 5, 6, 7)
The winds of change are in the air. To say prayers for rain have finally been answered would be a gross understatement. California farmers are beginning to ask if seemingly Biblical Rains will ever stop long enough to start planting for the coming season’s transition northward. Water logged fields make for difficult and painstakingly slow working conditions. 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 manifest in supply gaps come mid-April into the month of May.
In Yuma, the unseasonably warm nighttime temperatures combined with intermittent rains shortened days to harvest. Shortened “days to harvest” means production has pulled forward. Oversupply in the Sonoran Desert Valleys has become a fleeting memory as The Great Mildew Plague tightens its vice like grip on production, sending estimates into freefall. It’s simple math at this point: remaining acres, divided by remaining weeks, equals remaining weekly production. By our math, it’s NOT enough. NOT enough to bridge the gap between Yuma and Salinas. This creates conditions for a Perfect Storm. These markets have been slow to react to the clear signs of imminent declining supply and poor quality, and should finally take off. Depressed markets and oversupply were a common theme of the past year, but the situation is rapidly evolving. Shifting conditioned industry psychology, when markets have been stubborn to make significant moves for months, has challenged efforts to increase markets to levels more suitable to current supply and demand projections. It’s time to wake up to a new year and a new reality. It’s time to fasten our seatbelts, because going to be a bumpy ride. Expect markets to continue to increase with declining supply and lead us into what has the makings of a gap.