ProduceIQ: All eyes on the tropics as Atlantic hurricane season kicks off

As summer sets in, a combination of shifting weather patterns, tropical disturbances, and increasing domestic supply is beginning to reshape the produce market.

The ProduceIQ Index dropped -8 percent over the past week, its steepest weekly decline this year, yet it remains at a ten-year high. However, the index may soon leave record-breaking territory as domestic availability of high-value commodities such as grapes and berries increases over the next few weeks.

ProduceIQ Index:  $1.43/pound, -7.7 percent over prior week  

Week #22, ending May 30^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.

Tropical Storm Alvin is currently drenching parts of Mexico’s Pacific Coast, potentially impacting key produce-growing regions. At the same time, forecasters are warning of an above-average Atlantic hurricane season, despite cooler ocean temperatures in traditional storm-forming zones. Ocean temperatures surrounding Florida and the Gulf Coast remain 8 to 10 degrees above average, raising the risk of rapid storm intensification near landfall.

Meanwhile, Canadian wildfire smoke is once again drifting into parts of the U.S., threatening air quality in northern regions. Produce prices are responding in varied ways. Oranges are maintaining record highs, berry markets are in flux, and melons are surging into stores with strong supply and quality.

Orange prices are at a ten-year high by a significant margin. The navel crop is winding down, and Valencia growers in California are just beginning harvest. Forecasts for this year’s Valencia crop are down -20 percent compared to the previous year, sour news for already record-high orange prices. In line with historical trends, prices are likely to continue rising throughout the summer.

Orange prices, 72ct from the West, continue to rise, leading to the summer.

Raspberry and strawberry prices are down significantly over the previous week. Increasing volumes from growers in Mexico and California are flooding markets, but high temperatures are creating quality issues and shortening shelf life for both commodities. Markets will likely find their floor before stabilizing over the next two weeks.

Raspberry prices, $15, plummet towards their floor.

Domestic availability of melons continues to increase, driving down average prices. Cantaloupe prices are down -21 percent, honeydews are down -17 percent, and watermelons are down -10 percent week-over-week. Sizing and quality for all three commodities are reportedly excellent. It’s ironic how produce prices are often the lowest when the quality is the best.  

Cantaloupe prices, $0.24/pound, sink to an 8-year low.

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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.