Merriam-Webster, we have a nomination for 2022’s word of the year, inflation. Rising costs are haunting the conscience of the ordinary consumer as they avoid eye contact with the fuel meter at the gas station and warily wander the isles of their neighborhood grocery.
Twisting the knife a little deeper, the National Oceanic and Atmospheric Administration announced that La Nina is strengthening, not weakening as is the norm during Spring. As a result, the Atlantic hurricane season will likely be more active again this year, and the drought across the Southwest of North America may worsen and spread more East.
In short, don’t count on the weather to cooperate with efforts to battle rising inflation costs.
At $1.43/pound, the ProduceIQ Index reached the highest price in its 12-year history. Week #19 typically rises due to the inclusion of the high-priced Cherries, which swing the index seasonally. Nevertheless, the prior peak price had only reached $1.29, occurring in week #26 of 2020. This week was particularly dramatic, with a 28% increase over the prior week. We anticipate that 2022 will continue to break records for high prices.
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.
ProduceIQ Index: $1.43 /pound
Week #19, ending May 13th
California stone fruit season is off to a hot start. Abnormally cold spring weather sandwiched between record hot days is jump-starting production. Peaches, nectarines, and apricots have all started lightly but will pick up quickly in response to the warmer weather.
Cherries from California started the season with decent volume, good quality, and higher prices than all years except for 2014. Expect market supply and volume to accelerate and then transition to Washington. At $4.82/pound, cherries are easily the most expensive fruit in our index. We are curious to see if the pièce de résistance of expensive fresh produce is impervious to the tightening of belts by consumers due to inflation.
In Oxnard, CA, quality issues are thinning celery supply and building market pressure. USDA is reporting prices at a lofty $31. There is a precedent for celery prices to elevate much further. In 2017 and 2019, week #19 celery prices were significantly higher than this week’s prices. Prices may continue to rise for the next three weeks until production ramps up in Salinas, CA.
Celery prices break out and have the potential to keep rising.
The Michoacán harvest is great. Too bad only kings and queens can afford to buy their avocados. Mexican growers attempt to reduce the harvest, artificially supporting prices, but demand is softening, and inventories are increasing. As a result, avocados from other regions are increasingly viable options.
The pull from Cinco de Mayo ended sharply, and exhausted buyers are ready for the brutally high prices to end. As summer begins, retailers have more options to promote local and more affordable items.
Mexican growers’ production of tomatoes is waning. Eastern yields are not overwhelming, and the market needs California production to pick up over the next month. As a result, all varieties are seeing price increases. Prices are up as high as +37 percent over the previous week. But grape-type are particularly short as they rely on having abundant labor. Prices over the past several years have increased dramatically during this time. Supply is expected to thin and quality decline over the next couple of weeks.
Grape tomato supply struggles when the Mexican season ends.
Parsley prices are at a ten-year high. Warmer weather in California is causing plants to bolt resulting in a nationwide shortage of Plain Italian Parsley. Warmer weather is expected this week in California and will do little to ease market tension.
Parsley supply struggles. Prices often spike this time of year.
Eastern Veg is in a transition between Florida and Georgia. Squash and cucumbers are available in South Georgia already, but the full mixer is lacking. Bell pepper is starting with a few Georgia growers but is mostly available in Central and West Florida.
Windy and chilly weather in California is affecting berry production. Mexico is filling the gap, but current markets are in a precarious position. Blackberries and raspberries may see the most price volatility due to limited product availability; however, blueberry markets are expected to stay steady, and strawberries may even decrease.
In the meantime, blueberry supply from Mexico, Florida, and Georgia is keeping East Coast supply stable. CA should pick up production in the next couple of weeks and bolster supply.
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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 US 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.