Heat is affecting more than just your European vacation. Last week’s California heatwave fanned the flames of commodity prices already agitated by this summer’s consistently erratic weather.
The news could not come at a worse time as inflation continues to tighten the belts of the American consumer. Bloomberg declared the probability of a recession occurring within 12 months is now 38 percent.
ProduceIQ Index: $1.42/pound, -4.7 percent over prior week
Week #28, ending July 15th
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.
Potatoes and onions, staple storage crops, are having a rough go. Last week we covered the potato shortage. This week, potato prices continue their astounding climb, +4 percent over the previous week. The earliest relief will most likely come from Washington in August.
Dry onions, particularly yellow onions, are also at a ten-year high. Extreme weather, specifically heat in California and rain in New Mexico, is causing an unprecedented shortage.
Onion plantings are reportedly lower in Mexico, New Mexico and California due to concerns about rising costs and water shortages. Farmers may wish they could revive the mystic art of water dowsing to find new water sources as higher-value crops take precedence over onions and other risky crops.
Wheat, for example, is a low-risk non-perishable crop that has more than doubled in value from $3.99 per bushel in 2016 to record prices now at $9.27. When input costs, such as fertilizer and diesel, rise dramatically, farmers logically rotate to safer investments.
The circumstances are an unfortunate continuation of the most expensive year on record for dry onions.
50lb colossal yellow onions are at record levels, surpassing 2019
Georgia is finished with dry veg items, and heavy rain in the Carolinas is thwarting production. However, Tennessee and midwestern states should start in a week and provide some relief to elevated prices.
Red and yellow pepper prices in the East and West continue to skyrocket. Extreme heat is negatively affecting yields. You know it’s hot when practically the only place shipping red bells is Canada.
Growers that resisted the temptation to sell their pepper early as ‘green’ are now relieved to find colored bells are paying significantly more. Bakersfield is starting next week and should provide some relief to elevated markets.
Red pepper enjoys a few weeks of strong markets and high prices.
Tomatoes markets have mixed reports. Western production is weakening, and Eastern states like Tennessee and North Carolina are just beginning production.
Prices are up and an average of +11 percent across all varieties. Grape, cherry, beefsteak and plum type supply is reportedly very lean, whereas rounds availability is steady. At $13, plum tomato prices are at a ten-year high. Strong demand will likely continue to elevate prices until more local availability picks up in the East.
Blueberry prices stall slightly. Although the berries are still in a demand-exceed-supply situation, availability is improving. The Pacific Northwest is finally picking up production, as well as Minnesota and New Jersey. As a result, prices will continue to fall from their historic ten-year high as we move closer to August.
Hot weather is urging struggling strawberry prices onward. However, quality is still very good despite smaller sizing and slightly lower output in California. Based on past trends, strawberry prices will likely continue to increase as growers battle the worst mid-summer heat.
Like strawberries, blackberry and raspberry prices are trudging uphill as consistent heatwaves put the temperate berries to the test. Blackberry and raspberry prices are up +10 percent over the previous week and will likely climb higher.
Squash prices fell towards a ten-year low. Yellow squash is known as “summer squash” for a reason; plentiful warm weather and local availability in the East are flooding squash markets with ample supply. Squash is being harvested in many states and customers without a local deal should certainly send us a note. It’s a great time to promote summer grill-able squash.
Yellow squash, medium size, drops quickly under $8. Prices are negotiable by region.
The mood at the Organic Produce Summit in Monterey, CA, was optimistic for the continued growth of organics yet realistic about the fear of inflation causing an economic downturn. We enjoyed our time in Monterey and look forward to seeing everyone again next year!
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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 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.