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ProduceIQ: Tropical Storm Eta threatens FL

A late arrival to hurricane season, Tropical Storm Eta may be particularly disruptive if it sends heavy rains to Florida’s growing regions.

Cuba is receiving as much as 25 inches of rain in areas due to Eta. The storm is forecasted to wobble into the gulf and then return back to Florida with continuous rain throughout this week.

Industry sales this past week are down to the lowest level since 2012. Sales for the rolling 4 weeks are averaging -4.3 percent compared to prior year.

The decline is driven by lower movement (pounds sold), -5.9 percent, caused by less available supply and lower foodservice demand. Prices have an opportunity to increase from Thanksgiving demand because supply remains generally light.

ProduceIQ Index: $0.73 /pound, flat over prior week
Week #45, ending November 6th

Blue Book has teamed with ProduceIQ 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.

Freight rates remain elevated as truck availability is tight, particularly in California and the Western United States.

Buyers and sales staffs in the Wet Vegetable category may have whiplash. Broccoli, Cauliflower and Celery begin their fifth ascent in the roller coaster of pricing for the year. The pattern appears predictable, but this is the produce industry.

This time, supply is tight on all three commodities due to low yields and a variety of quality issues.

The next few weeks remain a time of transition to southern growing regions. Demand before Thanksgiving is beginning to pull and should allow most commodities to firm prices in the next weeks.

Recognize a pattern? Wet vegetables are oscillating between a $0.30 /pound floor and an $0.80 ceiling. Currently rising as harvesting transitions to new growing regions.

Dry vegetable category should be more active this week as the market turns. Last week, the Dry Vegetable category fell -8.8 percent, and most items are nearing the low end of their price ranges.

Bell Peppers and Sweet corn led the declines. Georgia production is winding down, and Florida is starting with quality product though supply may be impacted by T.S. Eta.

Generally, it has been a wet growing season for Florida, which causes lower yields and a shorter plant life and time to harvest.

Given the recent lack of demand, Squash, Beans, and Cucumbers are all poised for higher prices. Florida has the volume needed to stock the increased demand for Thanksgiving.

However, the presence of T.S. Eta has cast a cloud of uncertainty over the guarantee of supply.

Squash trades in a low range during weeks 42 to 44. Will Squash prices jump again based on pre-Thanksgiving demand and rain in Florida?

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 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.