ProduceIQ: Markets pay a premium for flexibility

The calendar may have flipped to a new year, but fresh produce markets are carrying some familiar baggage into Week #2. Weather stress, seasonal transitions, and uneven supply continue to shape pricing across the aisle.

ProduceIQ Index:  $1.07/pound, down -1 percent over prior week

Week #2, ending Jan 9^th  

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.

Oranges are leading the list of challenges, lime and avocado markets are beginning to wake up, and strawberry prices are enjoying a short-lived bump before expanding supplies apply the brakes.

The outlook for the domestic orange supply is bleak. At $25, average prices are at their second-highest level for week #2 in the last ten years. California Navels continue to skew heavily toward larger sizes, leaving small fruit supply scarce and unlikely to recover before the transition to Valencias.

Compounding the challenge, weather-related stress earlier in the season led to significant fruit drop and is now surfacing as a lighter-than-expected supply. While quality remains strong, availability, particularly on small sizes, is lean. Buyers should expect substitutions and stay flexible on size and variety as the citrus season moves forward.

Navel prices, 138 ct, begin to descend from record-highs

Elsewhere in the citrus category, lime markets are on the rise. Average prices are up +8 percent over the previous week due to increasing demand and waning supply. In Mexico, growers are winding down the old crop, but volume from the new crop is expected to start showing up over the next two weeks.

Even so, at $29, average prices are above average for week #2 but remain a far cry from record-breaking territory. The next couple of weeks will be critical in determining the general outlook for prices as the lime market enters its most volatile time of year.

Limes, 175 count crossing Texas, prices are high, $31, and may go higher

Outside of citrus, avocado prices edged higher over the previous week. Average prices have consistently been on the lower end of the historical spectrum over the last five weeks. Still, prices are finally turning upward after two weeks of holiday-related labor challenges and moisture-related quality issues. Prices will likely rise steadily through February as, like lime markets, avocados enter a period defined by high demand and seasonally low supply.

Hass Avocado prices begin the winter season at low levels

Not all markets are tightening, however. Strawberry sellers should take heed and enjoy the higher prices while they can. Growers in Mexico and Florida are quickly closing the supply gap caused by losses from Western rain events. Prices may be up +16 percent over the previous week but remain well below average for week #2. Solidifying production out of Mexico and Florida will be a formidable roadblock to rising prices over the next three weeks.

As fans shell out record prices for seats at the NCAA national championship football game, producers are facing a similar reality: strong demand, limited access, and a premium on flexibility. The markets may look different, but the lesson is the same: those who plan ahead will have the best seats for the best prices.

ProduceIQ saves you time and provides valuable information to increase your profits.

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 USDA Agricultural Marketing Service data on movement and prices. The Index serves as a fair benchmark for industry price performance.