March inflation reports inspire cautious optimism.
Food prices fell 0.3 percent for the first time since September 2020, welcome news for price-weary consumers. However, experts are concerned that the small advance is not enough positive momentum to significantly change the Fed’s anti-inflation tactics.
Interestingly, our own ProduceIQ index also fell -1 percent. Year-over-year, the index fell to $1.22 from a record high of $1.23 in 2022.
Blue Book has partnered with ProduceIQ BB #:368175 to bring the ProduceIQ Index to its readers. The index provides a product industry price benchmark using 40 leading products to provide data for decision making.
ProduceIQ Index: $1.22/ pound up to +1. 7 percent during the previous week
Week #15 ends April 14thth
In weather news, a freak thunderstorm has dumped water in a kiddie pool in Fort Lauderdale. A reported 25 inches soaked the city last week as a routine thunderstorm joined the warm and humid Gulf Stream, a 24-hour record for the city. Without a storm, this impressive amount of water flooded cars and even closed the airport unexpectedly.
Fortunately for fresh produce, there isn’t much agriculture left in Broward County, although the 1 in 1,000 storm is a troubling reminder that no one is ever safe from Mother Nature’s vagaries.
Western late produce activates spring commodity markets. At this point, this phenom event needs an official name. May we suggest “The Great Salad Shortage of 2023?”
Broccoli and cauliflower markets are in an extreme demand-excess-supply situation. Prices are growing rapidly. Compared to the previous week, the price of broccoli increased by +27 percent to $40, and cauliflower by +39 percent. Both commodities are at ten-year highs by a significant margin.
Growers in Salinas have been significantly behind due to historic flooding in the growing region. Those looking to cover shorts can look to Mexico and Santa Maria for coverage. Unfortunately for buyers, this is a situation where they are hoping that the adage “the cure for high prices is high prices” will come true sooner rather than later.
Broccoli prices continue to rise to new levels.
Carrot and leaf markets are just as hot as their brassica cousins. The late winter rains that snuck up on California growers throughout February and March are a gift growers may wish came in a different package.
The average prices of lettuce and leaves have increased by +48 percent compared to the previous week. Markets are forecast to move higher as late growers chase the spring produce train, which in some ways looks like it’s already pulling out of the station.
Iceberg, Roman goods and leaf markets will remain volatile for 3-4 weeks.
Iceberg prices are rising rapidly as shippers recall the $90 markets reached last November.
Grape production in Mexico and California is two weeks behind schedule. In South America, Chile and Peru have peak production. As a result, the red and green supply is weakening, and the prices have increased by +16 percent compared to the previous week.
With reduced supply from Chile and Peru, prices are likely to rise over the next few weeks. However, grape markets should stabilize in June when Mexico begins production.
In higher price news, potato shortages are destabilizing the notoriously reliable potato markets. The prices increased by +2 percent compared to the previous week. Late winter weather is delaying planting of the new crop and suppliers are working to extend the storage crop before the start of the new crop for several weeks.
Russet potatoes remain at extreme price levels that began in June 2022
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The ProduceIQ Index is the fresh produce industry’s only point-of-shipment price index. It represents the industry price per pound at the packing point for domestic products and at the US port of entry for imported products.
ProduceIQ uses 40 of the best products to represent the industry. The index dynamically weights each product by season as a function of the 5-year weekly moving average sales. Sales are calculated using USDA’s Agricultural Marketing Service for movement and price data. The index serves as a fair measure of industry price performance.