The U.S. Department of Agriculture is projecting retail food prices will rise between 1 percent and 2 percent in 2019.
The USDA report in 2018, retail food prices rose just 0.4 percent. The modest increase was the first in three years, but still below the 20-year historical annual average of 2 percent.
In 2019, the USDA said retail food inflation may continue to remain low at the grocery store. If price rise by the predicted 1 percent to 2 percent, the USDA said it would be the fourth year in a row with deflating or lower-than-average inflating retail food prices.
The USDA said fresh fruit prices rose 1 percent in 2018, and economists expect fresh fruit prices to increase an additional 2 percent to 3 percent in 2019.
The USDA’s food price report said fresh vegetable prices rose 1.1 percent in 2018 and are expected to increase an additional 2.5 percent to 3.5 percent in 2019.
Consolidation of two recent purchases of Washington state apple growers and packers and other tree fruit highlights a trend that will continue, in the opinion of industry and financial experts.
One of the state’s biggest family-owned and operated apple companies, Broetje Orchards has been sold. Broetje Orchards LLC, FirstFruits Marketing of Washington LLC, and Snake River Housing Inc. were involved in the purchase.
The Tri-City Herald estimated the value of the real estate alone — more than 6,000 acres of fruit orchards — at nearly $300 million, although no purchase details were disclosed.
The business will be operated by three new entities: FirstFruits Farms LLC, FirstFruits Marketing LLC; and FirstFruits Community LLC, according to a news release.
Ralph and Cheryl Broetje founded Broetje Orchards more than 35 years ago, and it now grows, packs and ships close to 7 million boxes of apples a year, according to the release.
The new owner, the Ontario Teachers’ Pension Plan, plans a seamless transition to avoid disruptions for employees and customers.
Jim Hazen, former business manager at Broetje Orchards, is CEO and president of the new company, FirstFruits Farms LLC, and Chuck Zeutenhorst is general manager.
Another large-scale purchase involving Washington apple companies happened about the same time as the Broetje Orchards deal.
International Farming Corp. of North Carolina acquired Legacy Fruit Packers, Valley Fruit, and Larson Fruit, all of Yakima Valley. The combined companies are known as Columbia River Orchards.
The acquisition includes 4,000 acres of orchards and two packing facilities that handle about 4 million boxes of fruit annually. The purchase includes interests in Sage Fruit, Yakima; and Pacific Coast Cherry Packers, Wapato.
The Land Report earlier reported Microsoft co-founder Bill Gates paid $171 million last fall to acquire approximately 14,500 acres of farmland in southern Washington.
Investment in a cold inspection facility at the Mariposa Port of Entry at Nogales by the state of Arizona has received praise from The Fresh Produce Association of the Americas.
Gov. Doug Ducey’s proposed budget includes $700,000 for the facility at the port, according to a news release from the FPAA. Other stakeholders, including the FPAA and Santa Cruz County, have added funding for the project.
The ability to distribute temperature-sensitive items such as berries can help importing companies to expand operations to year-round, according to the FPAA.
“Imagine Nogales companies selling strawberries, raspberries, sensitive leafy vegetable items and more,” Lance Jungmeyer, FPAA president, said in the release. “Presently these items are not imported very much in Nogales because inspection infrastructure is not adequate during warmer months. Now, Arizona can participate in these lucrative markets.”
The FPAA touted the economic benefits of the project, including adding jobs and increasing the area’s tax base.
Although the U.S. Department of Agriculture reports berry exports from Mexico to the U.S. are more than $1 billion a year, Arizona is a minor importer, according to the news release.
A University of Arizona study commissioned by the FPAAA concerning a cold inspection facility at the Nogales port shows economic effects:
$43 million to $48 million in additional sales;
$27 million to $30 million increase in gross state product; and
$15 million to $17 million in labor income.
The FPAA and Santa Cruz County Port Authority have pledged up to $500,000 for the project, according to the release.
Predictions for fresh produce imports compared with a November forecast are increased in the latest fiscal 2019 trade estimates from the U.S. Department of Agriculture. However, it keeps the estimate for fresh produce exports at about the same level.
U.S. imports of fresh fruit in fiscal 2019 (year ending Sept. 30) are projected at $13.7 billion, up $600 million from both the November estimate and fiscal 2018 imports. Trade statistics from the USDA revealed October-November U.S. imports of berries (excluding strawberries) totaled $623 million, up 25 percent from $498 million the same period the previous year.
Imports of fresh vegetables are projected at $8.4 billion for fiscal 2019, up $100 million from the previous estimate and slightly higher than U.S. fresh vegetable imports of $8.36 billion in fiscal 2018. For October and November, the USDA reported U.S. imports of fresh peppers totaled $210 million, up 8 percent from the same period the previous year. Value of fresh tomato imports in October and November totaled $374 million, up 3 percent from year-ago levels.
Meanwhile, fresh fruit and vegetable exports, at $7.4 billion, are forecast unchanged from the November estimate, according to the USDA, and up from $7.29 billion in fiscal 2018.
USDA trade statistics show that U.S. apple exports in October-November 2018 were $151 million, down 26 percent compared with $202 million for the same period the previous year.
Whole and processed tree nut exports are pegged at $9.1 billion, also unchanged from November’s estimate but up from $8.76 billion in fiscal 2018.
Processed fruit and vegetable exports are unchanged from the previous forecast of $7.2 billion and are up from $7.03 billion in fiscal 2018.
Fresh produce takes four spots on a new top 10 list of superfoods.
Pollock Communications and Today’s Dietitian surveyed more than 1,300 registered dietitian nutritionists on which foods consumers will favor as healthiest in 2019.
Avocado, blueberries, beets and exotic fruit like acai and golden berries all made the cut, according to a news release. Other items on the list were fermented foods, seeds, ancient grains, nuts, coconut products and non-dairy milks.
Beets and blueberries were new to the list, while kale finished outside the top 10.
Those surveyed reported keto as the number one diet trend, followed by intermittent fasting.
“It’s clear from these predictions that consumers are on the hunt for a flat belly and will take extreme diet measures in their pursuit,” Pollock Communications and Today’s Dietitian wrote in the release.
The top diet trend reported for last year was clean eating, which dietitians point to as still relevant if not as wildly trendy as the other two.
“It’s not that ‘clean eating’ has declined in popularity,” Jenna Bell, senior vice president of Pollock Communications, said in the release. “We are still seeing the consumer push for cleaner labels and the industry continues their work to deliver it. But what’s different here is that millennial consumers are going beyond eliminating a food group, like cutting gluten, to making more drastic changes that require real lifestyle adjustments.
“It’s beyond food is medicine,” Bell said in the release. “Now food is the core of wellness.”
Heavy crossings of imported Mexican produce into the leading border areas of Texas’ Lower Rio Grande Valley and Nogales, AZ are continuing before a seasonal decline in volume begins in March.
Wintertime is peak time for Mexico’s fruit and vegetable shipments into the U.S. and Canada that includes a long list of items.
Imported Mexican produce Starts in late January and pretty much continues through September, with biggest volumes coming from avocados, limes, tomatoes, bell peppers, cucumbers, broccoli, cabbage, watermelons, onions, limes, and mangoes.
For example, mostly Mexican vine ripe tomatoes with much lesser amounts of grape and plum tomatoes are currently averaging about 3,450 truck loads crossing at Pharr, TX.
Divemex is a major Mexican grower which partners with The Oppenheimer Group of Vancouver, BC, which handles good volumes of conventional and organic bell peppers, mini peppers and cucumbers. The operations also move a lot avocados in a year around program as well as seasonal berries.
Fresh Farms of Nogales is shipping good volumes of Mexican zucchini, cucumbers, English cucumbers, sweet corn, green bell peppers, colored bell peppers, eggplant, hard squashes and green beans.
At the Port of Nogales, AZ, tomatoes always provide the top volume crossings during the winter. Currently Mexican tomatoes crossing into Nogales are averaging around 4,500 truck loads weekly. Still, there remains good volume with items such as cucumbers, bell peppers, squash, melons and eggplant..
Edinburg, Texas-based Frontera Produce Ltd. looks to Mexico in the winter for several items, said Trevor Stuart, account manager.
“Over the next three months, our main import commodities out of Mexico for Frontera are your full line of chili peppers, bell peppers and limes, and, later, the kick-off to the start of mango season,” he said.
Frontera Produce Ltd. of Edinburg, TX has its biggest winter volume with Mexican chili peppers, bell peppers and limes, followed in April and May by mangoes.
During the fall season the American produce shippers are loading onions from storages. Kicking off the New Year, Mexico is shipping fresh onions, followed closely by sweet onions from the Lower Rio Grande Valley of Texas.
Mexican produce from Nogales, grossing about $3300 to Chicago.
Mexican produce from South Texas, grossing about $4700 to New York City.
Northwest produce shipments this time of the year are pretty much limited to apples, pears, potatoes and onions, with apples easily leading the pack in terms of volume.
Apple shipments, mostly from the Yakima Valley and Wenatchee Valley in Washington are providing most of the Northwest loads, averaging about 2,750 truck load equivalents each week. While the total volume is expected to be down this season, there are still plenty of loading opportunities.
Washington also is shipping pears, although on a much smaller scale. Originating from the same areas apples, about 400 truck loads are being hauled weekly.
Northwest organic pear shipments were about 900,000 boxes last season and is expected to be about 2 million boxes this time around.
Loading of Bartletts are starting to wind down, and shipments are now more focused on green anjou, bosc and red anjou, with plenty of supplies seen on all three types for the rest of the season.
The Northwest pear shipping season runs through June.
The largest volume of onions out of the Northwest are coming out of Washington’s Columbia Basin and the adjacent Umatilla Basin in Oregon. Nearly 350 truck loads are being moved a week from sheds.
As for Northwest potatoes, the biggest volume is originating from Western Idaho and Malheur County, Oregon. Over 8oo truck loads of spuds are being shipped each week.
Washington apple and pears – grossing about $6500 to New York City.
Idaho-Oregon potatoes – grossing about $4700 to Atlanta.
A strawberry variety with higher yields in November and December, when the season is starting and berries are in demand has been developed by University of Florida researchers.
Named Florida Brilliance, the new variety, is gaining such interest among growers that it could account for 40 to 50 percent of Florida strawberry acreage next season, according to a university news release
Longer shelf life and better flavor are also attributes of Florida Brilliance.
The berry has a “glossy, shiny appearance,” according to Vance Whitaker, associate professor of horticultural sciences at the university’s Institute of Food and Agricultural Sciences
“Our farmers need to produce more strawberries during this period in order to remain profitable,” Whitaker said in a news release. “This variety has beautiful, flavorful fruit that is available consistently throughout the season, from Thanksgiving to late March in Florida, and thus on grocery store shelves in the eastern United States during this period.”
Grower Adam Young of Dover, FL., planted Florida Brilliance on 45 acres, about one-quarter of his production.
“It takes the weather better,” Young said in the release. “The fruit shape is more uniform. It definitely looks like we’re going to use it as our workhorse.”
Whitaker and his colleagues at the university’s Gulf Coast Research and Education Center in Balm developed the berry through conventional cross-pollination, choosing “parent” strawberries with different but complementary characteristics, according to the release.
Florida Brilliance is being grown on about 1,500 acres in Hillsborough County, about 15 percent of the overall crop in Florida, according to the Florida Strawberry Growers Association. That’s significantly higher than first-year commercial plantings from past university releases.
“Growers tell us that this variety will replace the current standard Florida Radiance as quickly as planting stock is available,” Whitaker said in the release. “Next year, 40 to 50 percent of the industry could be planted in this variety.”
Florida Brilliance resists many diseases, Whitaker said, and is easy to harvest because it has long stems and an open plant canopy.
Ontario’s greenhouse vegetable shipments will start building in mid-February and continue to increase through the spring.
DelFrescoPure of Kingsville, Ontario reports the company began picking mini cucumbers and strawberries in late January.
The greenhouse industry has been increasing the amount of high-pressure sodium lights being installed in facilities, which lengthens the harvest season.
If you want to grow tomatoes during the winter, as well as peppers, strawberries, or just about anything else, high-pressure sodium lights are a necessity.
Pure Hothouse Foods of Leamington, Ontario reports Canadian production of seedless cucumbers (both long English and mini cucumbers) get underway in mid-February and continue with increasing volume well into the spring.
Central Mexican greenhouse operations experienced cloudier than usual weather and lighter volume in late November and December compared to last year.
Tomatoes, bell peppers and baby eggplants will start in Canada in mid-March to early April and continue to ramp up volume heading into the spring.
Winter greenhouse production was held down by lengthy cloud cover and persistent low light levels in Mexican growing regions, said Harold Paivarinta, senior director sales and business development for Red Sun Farms, Kingsville, Ontario.
Red Sun Farms of Kingsville, Ontario report following a very challenging winter they were anxiously awaiting the maturing of additional crops in Virginia and Ontario this spring.
NatureFresh Farms of Leamington, Ontario notes since mid-January, production has been ramping up again, especially in peppers and tomatoes and good supplies are seen in the coming months.
In February, the company sees Mexico returning to normal production, and shortly after, Canada will start picking more cucumbers..
Ontario accounts for nearly 80 percent of total Canadian greenhouse production and the region has seen steady growth in greenhouse vegetable acreage, averaging close to 7 percent per year for multiple years. However, little change in acreage is expected from last year.
Ironically, the growth pattern reduction is a result in part due to the diversion of acreage to cannabis. No report is yet available on total amount of acreage devoted to cannabis production in Ontario.
Overall greenhouse vegetable acreage in Ontario is close to 3,100 this year, which is flat or up very slightly from about 3,000 acres a year ago.
While lacking organic statistics, it is estimated organic acreage may represent about 10 to 11 percent or more of greenhouse vegetable acreage.
Over one million square feet of former vegetable greenhouse production has been converted to grow cannabis in Delta, British Columbia by Village Farms International Inc. and will be traded on the NASDAQ Capital Market.
Village Farms CEO Michael DeGiglio has said the listing is a precursor to “aggressively pursue” opportunities with hemp and cannabidiol products in the U.S. The company has a total of 130 acres (5.7 million square feet) of vegetable greenhouses in Texas that can be converted to produce hemp and CBD products, a process that could be completed in eight months or sooner.
DeGiglio has said the company might also produce hemp in open fields, but plans depend on Texas legalizing hemp.
DeGiglio said in a recent Q&A with Real Money/TheStreet that recreational marijuana and CBD production potentially can bring 10 times the margins that tomatoes do.
The company will be listed under “VFF” on NASDAQ, and continues to be listed under the same symbol on the Toronto Stock Exchange, according to a Village Farms news release.
The initial trading date on NASDAQ for Village Farms common shares has not been determined.
The company plans to report fourth-quarter/year-end financials on March 13, according to the release.
