SUPPLY FORECAST 2/18/17 through 3/04/17
(Weeks 7, 8, 9)
Predictions of a turbulent finish to the desert season have become reality. The Great Mildew Plague of the Sonoran Desert Valleys continues to hamper efforts to effectively address quality concerns, namely discoloration. Fields, once vigorous and green have gradually migrated to a tired spectrum of green, yellow, and brown. Harvest crew workmanship is being tested at levels rarely seen this past year. A short lived heat wave continued the reoccurring theme of fields pulling forward. Diminishing yields will inevitably exacerbate early finish concerns for the Yuma deal. Mostly Markets that were previously slow to react to a variety of rising market indicators have finally caught up to reality on the situation.
California farmers continue to aggressively fight through unrelenting waves of wet weather to adequately prepare for the impending transition northward. Late February weather predictions are calling for more of the same. Flexibility in planting windows will continue to shrink, likely forcing tough decisions to eliminate plantings outright if the window is missed. 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 come mid-April into the month of May. An early finish to the desert coupled with the possibility of a late and unpredictable start in Salinas has grower/shippers taking an increasingly cautious position when it comes to advance commitments and pricing.
Weather concerns and plummeting yields have not been limited to domestic supply. European vegetable production has been decimated by a variety of unseasonal weather patterns that have increased overall demand for US grown imports. Traditional outlets for incremental oversupply have been swiftly replaced by the insatiable demand of the UK and EU.
Volatility in supply and quality concerns will be the primary drivers of increased market pricing during this period. It remains to be seen if an outright GAP will manifest between growing regions, but all the signs seem to be pointing in that direction.