It’s the Christmas season! The air is filled with the smell of fresh-cut evergreens, the sound of Mariah Carey’s only famous song, and the gossip surrounding a looming rail strike.
The cessation of 40 percent of the nation’s freight industry isn’t a typical hallmark of the holiday season; however, if the strike does proceed, the impact will be as unavoidable as humming “All I Want for Christmas is You” for the next two days after reading this article.
Fortunately, the catastrophic effects would mostly be secondary for the fresh produce industry. Other than some less perishable “hardware” commodities, very little fresh produce moves by rail. Even still, the industry is and will continue to be impacted by the economic malaise that comes with these disruptions.
ProduceIQ Index:$1.31 /pound, up+9.2 percent over prior week
Week #47, ending November 25th
Blue Book has teamed with ProduceIQ BB #:368175 to bring the ProduceIQ Index to its readers. The index provides a produce industry price benchmark using 40 top commodities to provide data for decision making.
Although some produce prices on Thanksgiving holiday staples are down significantly this week, overall prices are curiously higher than usual (15 percent higher than any prior year). This is because the post-holiday slump in demand has yet to register with all commodities due to short supply.
For the most part, buyers left for vacation after the last-minute coverage for Thanksgiving was complete. As a result, buyers tend to sit out this upcoming week, and prices should begin to settle before ramping up again for Christmas.
Grape markets, particularly red grapes, are strengthening. Overall, prices are rising and are already on the higher end of the historical spectrum. It isn’t easy to generalize about the grape market, which is dominated by proprietary varieties.
However, grape markets typically tighten this time of year as crops transition to South America. Cooler and wetter than usual weather in Mexico is making the annual transition slightly more dramatic than expected.
Supply will continue to wane as Mexico winds down and the South American export season ramps up. As a result, expect volatile markets through the end of the year.
In addition to grapes, abnormally cool weather is negatively affecting yellow squash supplies. Squash prices are up another +21 percent over the previous week due to low supply. According to USDA data, week #47’s reported Mexican import volume is half last year’s.
Expect squash prices to peak over the next couple of weeks and ease as Central Mexico picks up production in mid-December.
Yellow Squash prices spike higher than is typical.
Cucumber prices cratered and are finally out of record-breaking territory. For the past seven weeks, prices have maintained a ten-year high due to an abnormally low supply. But now, markets are regaining some sense of normalcy thanks to increasing supply out of Mexico and Florida.
American slicing cucumbers, medium, fall to $13 after reaching unchartered territory.
Lettuce markets can’t seem to catch a break. Prices were forecasted to begin a dramatic descent this week after over two months of record-breaking increases. But a cold snap in the desert caused some harvesting delays and light quality issues. Combined with the usual holiday labor shortage, this cold snap will keep lettuce prices elevated for another week.
Today, as I munched on a Caesar salad, it struck me how clueless the general public is about the plight of restaurant owners and others buying $100 lettuce. Admittedly, knowing I was having quite a luxury, the salad tasted better than expected.
Looking forward, supply out of the Arizona/California desert should steadily increase, easing tensions that have plagued the lettuce industry for what feels like an eternity.
Romaine lettuce prices are expected to fall, though they remain at prices exceeding 2x historical levels.
The ProduceIQ Index is the fresh produce industry’s only shipping point price index. It represents the industry-wide price per pound at the location of packing for domestic produce, and at the port of U.S. entry for imported produce.
ProduceIQ uses 40 top commodities to represent the industry. The Index weights each commodity dynamically, by season, as a function of the weekly 5-year rolling average Sales. Sales are calculated using the USDA’s Agricultural Marketing Service for movement and price data. The Index serves as a fair benchmark for industry price performance.
It’s the Christmas season! The air is filled with the smell of fresh-cut evergreens, the sound of Mariah Carey’s only famous song, and the gossip surrounding a looming rail strike.
The cessation of 40 percent of the nation’s freight industry isn’t a typical hallmark of the holiday season; however, if the strike does proceed, the impact will be as unavoidable as humming “All I Want for Christmas is You” for the next two days after reading this article.
Fortunately, the catastrophic effects would mostly be secondary for the fresh produce industry. Other than some less perishable “hardware” commodities, very little fresh produce moves by rail. Even still, the industry is and will continue to be impacted by the economic malaise that comes with these disruptions.
ProduceIQ Index:$1.31 /pound, up+9.2 percent over prior week
Week #47, ending November 25th
Blue Book has teamed with ProduceIQ BB #:368175 to bring the ProduceIQ Index to its readers. The index provides a produce industry price benchmark using 40 top commodities to provide data for decision making.
Although some produce prices on Thanksgiving holiday staples are down significantly this week, overall prices are curiously higher than usual (15 percent higher than any prior year). This is because the post-holiday slump in demand has yet to register with all commodities due to short supply.
For the most part, buyers left for vacation after the last-minute coverage for Thanksgiving was complete. As a result, buyers tend to sit out this upcoming week, and prices should begin to settle before ramping up again for Christmas.
Grape markets, particularly red grapes, are strengthening. Overall, prices are rising and are already on the higher end of the historical spectrum. It isn’t easy to generalize about the grape market, which is dominated by proprietary varieties.
However, grape markets typically tighten this time of year as crops transition to South America. Cooler and wetter than usual weather in Mexico is making the annual transition slightly more dramatic than expected.
Supply will continue to wane as Mexico winds down and the South American export season ramps up. As a result, expect volatile markets through the end of the year.
In addition to grapes, abnormally cool weather is negatively affecting yellow squash supplies. Squash prices are up another +21 percent over the previous week due to low supply. According to USDA data, week #47’s reported Mexican import volume is half last year’s.
Expect squash prices to peak over the next couple of weeks and ease as Central Mexico picks up production in mid-December.
Yellow Squash prices spike higher than is typical.
Cucumber prices cratered and are finally out of record-breaking territory. For the past seven weeks, prices have maintained a ten-year high due to an abnormally low supply. But now, markets are regaining some sense of normalcy thanks to increasing supply out of Mexico and Florida.
American slicing cucumbers, medium, fall to $13 after reaching unchartered territory.
Lettuce markets can’t seem to catch a break. Prices were forecasted to begin a dramatic descent this week after over two months of record-breaking increases. But a cold snap in the desert caused some harvesting delays and light quality issues. Combined with the usual holiday labor shortage, this cold snap will keep lettuce prices elevated for another week.
Today, as I munched on a Caesar salad, it struck me how clueless the general public is about the plight of restaurant owners and others buying $100 lettuce. Admittedly, knowing I was having quite a luxury, the salad tasted better than expected.
Looking forward, supply out of the Arizona/California desert should steadily increase, easing tensions that have plagued the lettuce industry for what feels like an eternity.
Romaine lettuce prices are expected to fall, though they remain at prices exceeding 2x historical levels.
The ProduceIQ Index is the fresh produce industry’s only shipping point price index. It represents the industry-wide price per pound at the location of packing for domestic produce, and at the port of U.S. entry for imported produce.
ProduceIQ uses 40 top commodities to represent the industry. The Index weights each commodity dynamically, by season, as a function of the weekly 5-year rolling average Sales. Sales are calculated using the USDA’s Agricultural Marketing Service for movement and price data. The Index serves as a fair benchmark for industry price performance.
Mark Campbell was introduced to the fresh produce industry as a lender for Farm Credit. After earning his MBA from Columbia Business School, he spent seven years as CFO for J&J Family of Farms and later served as CFO advisor to several produce growers, shippers and distributors. In this role, Mark saw the impediments that prevent produce growers and buyers to trade with greater access and efficiency. This led him to cofound ProduceIQ.
