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        ProduceIQ: Markets on edge with pandemic impacts

        Demand is light as the produce industry takes a collective deep breath following the Thanksgiving rush. This lull typically lasts 7 to 10 days before demand picks up again. Industry movement and sales remain down approximately -10 percent over 2019 for the month of November.

        The coronavirus resurgence poses a risk to the already embattled foodservice industry. Potential for increased restaurant shutdowns and wary consumers is a foreboding threat through this winter.

        In addition, COVID-19 is causing increasing costs throughout the produce supply chain. For example, labor shortages in both harvesting and packinghouses are rumored due to illness outbreaks and subsequent quarantines.

        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.

        Week #48, ending November 27th

        Demand for “value added” packaging, such as bags and overwrap to protect consumers from the risk of over-handling bulk produce, are on the rise which increases costs of both packaging and labor.

        Exacerbating costs is the lack of truck driver availability and the high freight rates. Cucumbers, with a heavy case weighing 50 pounds, are being saddled with $6-7 per-case-freight from Florida to New York.

        With the increased cost of freight, produce markets are tenuous and even less predictable than normal. Anticipate a price balancing act with both overall lower demand and lower supply.

        Tomatoes prices dove -23 percent last week as Florida recovers and began harvesting after Storm Eta. As Mexico provides volume and lower price quotes, Roma tomatoes drop the most. Sliding from an average of $23/case to just $14/case.

        Berries are cheaper across the board as Mexico ramps up. Blueberries provide buying opportunities as both imports and Mexican supply is available. Though strawberries are not in full swing, they are at the lower end of their seasonal price range.

        Blueberries are at a 15-year low for this volatile time of year.

        Grapes have a bifurcated market. Red supplies, available for a few more weeks, are averaging $17.20/case, while green supplies are tight and averaging $25/case.

        Tropical fruit remains a buy on lower demand. Pineapple fruit salad needs to become “a thing” for the holiday season.

        Wet vegetables, broccoli, cauliflower, and celery are coming off their highs, along with romaine and iceberg lettuce. Mexico has enough broccoli to soften the market. The desert, Yuma, AZ, is able to provide steady volume of iceberg with varying quality.

        In Dry Vegetables, Mexico is beginning to ramp up, and prices show weakness. Though Florida’s cucumber production is lacking, and Honduras is expected to be light for the mid-winter crop, Mexico should have volume.

        Yellow squash may remain at higher prices in the mid-teens, while it’s less sensitive counterpart, zucchini, can be had for low price points ($4 to $6/case). While Florida struggles to ramp up production after tropical storm Eta and Mexico is not quite at their peak, uncertainty remains.

        Green peppers from Mexico are starting now, and colored peppers have a gap since Canadian production has slowed, allowing for higher 11-pound red pepper prices, $14 to $18/case.

        Despite being a low volume item, at $4.59/pound cherries make a notable dent in the overall produce marketplace. Prices typically decrease through the short season, as cherries from Chile are imported through January. Supply is estimated to be increased over prior year.

        Cherries are highly seasonal with price declines as the imports continue to mid-February.

        ProduceIQ Index
        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.com

        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.

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