Kuyuk
02-26-2010, 09:43 AM
I get daily/weekly updates on status of food stuffs... and I thought I would share with anyone who cared.
*** MORE INFORMATION ON THE TOMATO SITUATION ***
Importance: High
To Our Valued Customers:
Without a doubt this is the worst tomato situation we’ve seen in decades. As you are well aware by now, the ride has been a bit bumpy in the land of tomatoes since January’s freezing temperatures destroyed most of Florida’s crop. Now, here we are at the tail end of February and the situation has not gotten any better. As a matter of fact, the ride is getting bumpier as we are now heading into the roughest timeframe since the freeze. A few things to keep in mind as to why the negative trend continues:
Ø Florida encountered heavy crop loss and, for all intents and purposes, remains inactive with significant production not starting until late March/early April.
Ø This has put additional pressure/demand on Mexico’s supplies leading to a demand-exceeds-supply situation.
Ø Mexico’s local demand combined with the increased U.S. demand has Mexican growers struggling to keep up.
Ø Recent cooler than normal temperatures along with intermittent precipitation in Mexico has slowed growth maturations compounding the already short supply.
Ø Availability of large sizes is limited with small sized fruit being non-existent.
Most growers and repackers east of the Rockies enacted their Act of God clauses weeks ago. We anticipate the ones west of the Rockies will follow suit this week, if they haven’t already. As price points continue to climb, and with limited availability, some foodservice chains are only offering tomatoes when specifically asked for by patrons while others have pulled tomatoes from their menus altogether. Here are some numbers that may help put things into perspective:
Ø The first six weeks of 2009 there were a total of 19,716 loads between Florida and Mexico production. That’s a weekly average of 3,286 loads.
Ø The first six weeks of 2010 there were a total of 15,780 loads between Florida and Mexico production. That’s a weekly average of 2,630 loads; a 19.9% decrease
Ø The week of February 7th, 2010, there was a total of only 907 loads between Florida and Mexico production; a 72.3% decrease from 2009’s weekly average. WOW!
Ø There are tomatoes being imported from other countries such as Puerto Rico, Guatemala and the Dominican Republic but the volumes are nowhere near enough to have a positive impact on the market.
What should we expect to see through the month of March and into April, you ask?
Well, current price points don’t reflect the severity of the situation at hand and what is yet to come ( FOB prices reported for rounds by USDA for Wednesday, February 24, were; $30 out of Florida and $25 out of Mexico). With just about all of the U.S. demand relying on Nogales Mexico, prices will certainly head higher; how high isn’t known but they could reach levels that will slow down demand and lessen the pressure on supplies. IF that happens prices may decrease but will remain at elevated levels.
The weather has warmed up in Mexico. Today’s temperatures are in the mid-80’s and are forecasted to remain in the mid-80’s until Sunday’s brief cooling trend lowers temperatures into the mid-70’s. All of next week is expected to be in the mid-80’s which will cause the plants to generate multiple sets (a range of sizing and color leading to more options to fulfill customers’ spec needs). Mexican production will increase but please keep in mind this will not be enough to dig us out of the hole quite yet.
Supplies should be in much better shape come the second week of April as the Carolinas and Northern Florida ramp up production (Northern Florida was affected by January’s freeze too. Some crops were “pushed back” and others destroyed forcing some growers to replant).
You may also be wondering about Romas…supplies for the first six weeks of 2010 were up 8.8%; however, due to the severity of the round market many customers have tried to switch to Romas. This increased demand has caused the market to trend higher (the ol’ trickle effect). Look for the Roma market to continue to tighten up and prices to increase.
Buckle up as there is no doubt the bumpy ride will continue as the long, windy road ahead of us will be filled with potholes. Next week could be the worse with prices spiking into the $40’s. That being said please be assured we value your business and will continue to tie up loads in advance in order to secure fruit and supply you with as much product as possible. We will update you as the potholes are filled and a smooth ride is in sight.
*** MORE INFORMATION ON THE TOMATO SITUATION ***
Importance: High
To Our Valued Customers:
Without a doubt this is the worst tomato situation we’ve seen in decades. As you are well aware by now, the ride has been a bit bumpy in the land of tomatoes since January’s freezing temperatures destroyed most of Florida’s crop. Now, here we are at the tail end of February and the situation has not gotten any better. As a matter of fact, the ride is getting bumpier as we are now heading into the roughest timeframe since the freeze. A few things to keep in mind as to why the negative trend continues:
Ø Florida encountered heavy crop loss and, for all intents and purposes, remains inactive with significant production not starting until late March/early April.
Ø This has put additional pressure/demand on Mexico’s supplies leading to a demand-exceeds-supply situation.
Ø Mexico’s local demand combined with the increased U.S. demand has Mexican growers struggling to keep up.
Ø Recent cooler than normal temperatures along with intermittent precipitation in Mexico has slowed growth maturations compounding the already short supply.
Ø Availability of large sizes is limited with small sized fruit being non-existent.
Most growers and repackers east of the Rockies enacted their Act of God clauses weeks ago. We anticipate the ones west of the Rockies will follow suit this week, if they haven’t already. As price points continue to climb, and with limited availability, some foodservice chains are only offering tomatoes when specifically asked for by patrons while others have pulled tomatoes from their menus altogether. Here are some numbers that may help put things into perspective:
Ø The first six weeks of 2009 there were a total of 19,716 loads between Florida and Mexico production. That’s a weekly average of 3,286 loads.
Ø The first six weeks of 2010 there were a total of 15,780 loads between Florida and Mexico production. That’s a weekly average of 2,630 loads; a 19.9% decrease
Ø The week of February 7th, 2010, there was a total of only 907 loads between Florida and Mexico production; a 72.3% decrease from 2009’s weekly average. WOW!
Ø There are tomatoes being imported from other countries such as Puerto Rico, Guatemala and the Dominican Republic but the volumes are nowhere near enough to have a positive impact on the market.
What should we expect to see through the month of March and into April, you ask?
Well, current price points don’t reflect the severity of the situation at hand and what is yet to come ( FOB prices reported for rounds by USDA for Wednesday, February 24, were; $30 out of Florida and $25 out of Mexico). With just about all of the U.S. demand relying on Nogales Mexico, prices will certainly head higher; how high isn’t known but they could reach levels that will slow down demand and lessen the pressure on supplies. IF that happens prices may decrease but will remain at elevated levels.
The weather has warmed up in Mexico. Today’s temperatures are in the mid-80’s and are forecasted to remain in the mid-80’s until Sunday’s brief cooling trend lowers temperatures into the mid-70’s. All of next week is expected to be in the mid-80’s which will cause the plants to generate multiple sets (a range of sizing and color leading to more options to fulfill customers’ spec needs). Mexican production will increase but please keep in mind this will not be enough to dig us out of the hole quite yet.
Supplies should be in much better shape come the second week of April as the Carolinas and Northern Florida ramp up production (Northern Florida was affected by January’s freeze too. Some crops were “pushed back” and others destroyed forcing some growers to replant).
You may also be wondering about Romas…supplies for the first six weeks of 2010 were up 8.8%; however, due to the severity of the round market many customers have tried to switch to Romas. This increased demand has caused the market to trend higher (the ol’ trickle effect). Look for the Roma market to continue to tighten up and prices to increase.
Buckle up as there is no doubt the bumpy ride will continue as the long, windy road ahead of us will be filled with potholes. Next week could be the worse with prices spiking into the $40’s. That being said please be assured we value your business and will continue to tie up loads in advance in order to secure fruit and supply you with as much product as possible. We will update you as the potholes are filled and a smooth ride is in sight.