ProduceIQ: Rain brings relief to reservoirs, stress to produce markets

While Luke Bryan may be right when he sings that “rain is a good thing,” his lyrics could use a caveat. Perhaps something closer to: rain is a good thing, but it can temporarily disrupt production—and that’s not always a good thing. Whew… maybe we should leave the songwriting to the professionals.

ProduceIQ Index:  $1.18/pound, up +6 percent over prior week

(Week #1, ending Jan 2^nd)  

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.

The pattern of Western moisture continues. Historic rainfall over the past two weeks has not only shattered records but has also quite literally pulled California out of drought. State reservoirs are now more than 120 percent above average. While this is welcome news for growers planning ahead, it presents immediate challenges for those with crops in the ground and produce ready to harvest.

Strawberries are already feeling the effects. Western rain helped push average prices up by 22 percent over the previous week as moisture-related challenges tightened supply. Fortunately for buyers, even with the increase, average strawberry prices remain at a ten-year low. While growers in Oxnard, CA, and Baja, MX, are facing weather-related delays, more favorable weather in Central Mexico and Florida is allowing supply from those regions to expand.

Strawberry prices are below average, yet have firmer support than last year

Celery, however, has little interest in turning over a new leaf this year. At $62, average prices held firm week over week as heavy rain in the Oxnard and Santa Maria growing regions continues to limit harvests.

Prices now sit at their second-highest level for week #1 in the past decade and remain far removed from historical norms, keeping buyers’ New Year’s resolutions decidedly modest. Some relief may arrive in mid-January as Yuma growers ramp up production. Until then, shortened shelf life and low volume are expected to keep markets elevated.

Celery prices begin the year challenging the record start of 2023

Green onions round out the week’s rain-soaked story. Averaging a staggering $59, week #1 prices reflect an extreme demand-exceeds-supply scenario. Previous rain in Mexico has triggered widespread quality issues, with some growers reporting no harvestable supply at all. Availability is forecast to remain extremely tight through January.

Green onion prices, $59, are at “this has never happened before” levels

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