Archive For The “News” Category
Remember only a few summers ago when produce trucking rates from California to the East Coast were hitting $10,000? It hasn’t even come close to that in 2015 – and there appears to be a number of factors why.
As we head towards the Labor Day weekend final shipments to receivers for the holiday are now underway, if not already delivered. Don’t expect major rate increases.
East bound coast to coast rates in the summer of 2014 that were in the $8000 range are closer to $6500 this summer.
Here’s my take on why produce trucking rates are off.
***Less California Produce Volume. The 5-year California drought is beginning to take its toll on agriculture and it’s going to get a lot worse unless the El Nino weather pattern in the Pacific Ocean changes things this winter.
The San Joaquin Valley is being hit relatively hard by the drought and it is adversely affecting volume on many crops ranging from cantaloupe and honeydew and other melons to stone fruit, tomatoes and citrus. In the Salinas Valley, which has not suffered from the drought as much as in the San Joaquin Valley, all types of lettuce volumes have been like a roller coaster this summer.
The highest rates from California to the East Coast this year have been in the $8,000 range, and those were only for a limited amount of time.
***Rail Competition. While the railroads provide only limited competition, it still has an affect of produce trucking rates. After all, the rail rates are based trucking rates and often offer 10 to 15 percent less to haul. Still, we’ve seen a couple of rail related companies go out of business this year. The railroads have a history of dropping produce related services for other, less perishable products.
***Rules and Regulations. The insanity of excessive rules and regulations from both the federal and state levels continues, and it is having disasterous effects on owner operators. Rates are not keeping up with increasing costs of operations, although lower fuel prices have helped. Still, when you have the California Air Resources Board and their emission standards and other business killing rules, plus the feds pushing to implement Electronic on-board Recorders, not to mention many others, it all adds up.
***Qualified Drivers
The lack of qualified drivers continues to be a problem, although it could become a lot worse when the economy turns around. Attracting young people into the trucking industry continues to be a challenge. It’s a hard life and there’s certainly easier ways to make a living.
***Mexico. Over the past 20 years more and more produce is being grown in Mexico, and much of it is being driven by investments from American farming operations. Mexico has cheaper labor and less government interference in their operations. At the same time there is less produce being grown in California — Bill Martin.
Wendy’s International plans to buy almost 10% of the blackberry crop for a new seasonal salad the restaurant chain is scheduled to launch in summer 2016, based on federal numbers for domestic shipments.
California Giant Berry Farm is one of the suppliers for the 2 million pound deal, which has been in the works since 2014.
Statistics from the USDA show wholesale channels shipped almost 21.2 million pounds of U.S. blackberries in 2014. California shipped about 18 million pounds through wholesale channels in 2014.
California Giant has since started ramping up its blackberry production with many of its growers ripping out raspberries and planting blackberries. Other growers are using different pruning techniques to maximize production from existing plants.
California Giant also plans to source blackberries from the Southeast U.S., including Georgia, to meet Wendy’s demand.
The timing of the Wendy’s 2016 blackberry salad is expected to come just as the Mexican deal winds down and U.S. growers begin shipping. Supplies from California usually begin peaking in late July and continue with good volumes through the end of October.
Ultimately Wendy’s officials decided to go with California Giant and one other supplier for the blackberries. For most fresh produce commodities the chain uses two to five companies to supply its 22 distribution centers across the U.S.
Wendy’s has about 6,700 locations in North America and has introduced seven new salads in the past two years. One of those, the strawberry fields chicken salad, proved so popular in 2014 that the company brought it back this year.
The company plans to continue developing fresh produce menu items, saying consumer trends are being driven partly by celebrity chefs and cooking shows that promote healthy eating including fresh fruits and vegetables.
Baldor Specialty Foods has closed on a lease amendment that will expand its facility in the Hunts Point neighborhood in the Bronx, NY, by 100,000 square feet. The lease, signed with the New York City Economic Development Corp., will allow the fresh produce and specialty food distributor to strengthen the area’s robust food and beverage distribution network.
The Hunts Point Food Distribution Center is one of the largest in the world and includes the Hunts Point Terminal Produce Market, the Hunts Point Cooperative Meat Market, the New Fulton Fish Market, and parcels leased to companies, including Baldor and Krasdale Foods.
The nearly $20 million expansion, funded entirely by Baldor, will create 350 new quality jobs in addition to 400 jobs the company has created since moving to the Food Distribution Center in 2007. The expansion will allow Baldor to grow its fresh cuts manufacturing operation and increase its distribution to customers across the city and metropolitan region, including restaurants, hotels, retail food stores, corporate kitchens, nursing homes, hospitals and schools. The project will also serve to promote regional food distribution, adding capacity to Baldor’s current operation that already serves over 50 local farms and partners by distributing 40,000 cases of local product into the regional food system each week during peak season.
“This expansion solidifies our Bronx location as the headquarters of Baldor Specialty Foods,” TJ Murphy, owner and chief executive officer of Baldor Specialty Foods, said in a press release. “We are proud to make this investment in the Bronx, to strengthen our commitment to Hunts Point, and to continue to be a strong supporter of the area’s overall economic development.”
Currently, Baldor occupies a 193,000-square-foot warehouse distribution facility with over 1,000 employees located on 13 acres in the Hunts Point Food Distribution Center, which it leases from the city. The lease amendment will allow Baldor to expand its facility and relocate its parking spaces to the adjacent Halleck Industrial Development site. Baldor was selected through a public Request for Proposals issued in 2013. The project is consistent with the goals of the Hunts Point Vision Plan to catalyze food-related industrial uses and create local jobs.
Together, approximately half of the food in New York City stores and restaurants passes through the NYCEDC-managed Hunts Point Food Distribution Center. The cluster of wholesale markets sits on 329 acres and support 115 private wholesalers that employ more than 8,000 people. In March 2015, Mayor Bill de Blasio announced the City will invest $150 million over 12 years to enhance the capacity of the Hunts Point Food Distribution Center, strengthen existing businesses, and attract new entrepreneurs, generating nearly 900 construction jobs and approximately 500 permanent jobs.
Fresh online food purchases are often a disappointment to consumers, according to a new survey of more than 1,100 online grocery shoppers.
Consumers were polled who have shopped online for groceries at least once in the previous 12 months . The survey was conducted by organic online grocery service Door to Door Organics.
23 percent said they don’t buy fresh grocery products (produce, meat, fish and dairy ) online. For those who do buy fresh produce and other fresh food online, 57 percent said they have been disappointed in the quality or freshness of those items at least once in the last year.
58 percent of consumers would feel better about the quality of the fresh foods they buy online if they knew the products were recently picked or packaged. Just over half of consumers said they would be more comfortable if the fresh products were sourced from a local farm, and 25 percent said they would feel more secure about the quality of fresh grocery products if they were purchasing from a specialty online grocer.
“Easing concerns about the quality and freshness of produce and other fresh grocery items has always been a top priority for online grocers, especially those like us who specialize in local and organic produce,” Chad Arnold, CEO of Door to Door Organics, said in the release. “Selecting produce, for example, can be a very sensory-oriented experience — consumers like to touch, feel, smell and even taste their selections before purchasing. Online grocery shopping limits that initial sensory experience, so we do everything we can to ensure they experience that same satisfaction each time they open their Door to Door Organics delivery box.”
The survey found that online shopping is increasing, with 54 percent of consumers responding they had increased online shopping in the past year, with less than 4 percent indicating the amount of online shopping has decreased. 42 percent reported their online food shopping remained about the same in the past year.
Survey respondents said they valued their time at $56 per hour and reported it takes them an average of 69 minutes each week to shop for groceries, according to the release.
“It’s becoming increasingly harder for consumers to find a ‘one-stop-shop’ that meets all their grocery shopping needs,” Arnold said in release. “Today’s grocery shopper appreciates variety, wants to have easy access to all kinds of produce and products, but also values convenience based on being busier than ever. This is one of the primary reasons why consumers are making online grocery shopping a more regular part of their week, and I don’t expect that trend to turn downward anytime soon.”
by Wisconsin State Cranberry Growers Association
WISCONSIN RAPIDS, Wis. — Wisconsin’s cranberry industry is projected to produce more cranberries than any other state this fall, with a crop of 5 million barrels of fruit, according to crop projections announced today by the U.S. Department of Agriculture’s National Agriculture Statistical Services (NASS). The projected bountiful crop, part of the more than 8.4 million barrels of cranberries expected in 2015 nationwide, would continue to challenge the industry with an oversupply of fruit.
“Our growers do a great job and we have much pride in our crop, but today’s news is bittersweet as our industry continues to work its way out of an oversupply,” said Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association (WSCGA).
According to Lochner, the combined increase in supply and flat demand in the juice category is creating the market imbalance. He said the use of the latest science and technology by Wisconsin’s cranberry growers is resulting in stronger, healthier crops. That coupled with new U.S. and Canadian cranberry acreage that is now producing fruit and a very kind Mother Nature in recent years, has resulted in the large yields. He added that the industry’s focus now is to grow more and broader interest and demand from the international market.
In 2014, Wisconsin growers had a crop of 4.9 million barrels. The NASS projections, if realized, would result in the 2015 cranberry crop being 2 percent larger than last year’s crop. That projection is dependent on continued good growing weather, no damaging hail storms or major temperature drops leading up to the fall harvest, added Lochner.
Wisconsin will begin harvesting its cranberry crop in late September and continue through much of October to support fresh fruit needs for the early Canadian Thanksgiving (October 12th) and the U.S. holiday season. Other cranberries are frozen and stored for longer-term sales as frozen berries, sweetened dried and dried cranberries, juices, sauces and more. The U.S. Thanksgiving is November 26th.
“The oversupply is quite a challenge for all states that grow cranberries but especially here in Wisconsin where more than half of the world’s supply is grown,” said Lochner.
NASS, which bases its crop estimates on grower surveys nationwide, also made crop projections for other top cranberry producing states. Those projections are: Massachusetts at 2.1 million barrels, New Jersey at 585,000 barrels, Oregon at 504,000 barrels and Washington at 181,000 barrels. The nationwide forecast is expected to be nearly identical to 2014’s production.
by United Fresh Produce Association
WASHINGTON, D.C. – The United Fresh Produce Association announces the release of the Broker/Shipper Transportation Agreement template. Crafted by members of the United Fresh Supply Chain Logistics Council in partnership with the Transportation Intermediaries Association (TIA), the template is designed for members’ use when entering into the specific business relationship between shipping companies and third party transportation providers.
“This broker:shipper contract is the first of its kind to serve the produce industry,” said Ken Lund, Vice President, Support Operations, Allen Lund Company, Inc., “This template will save those Association members who use it many hours. It was put together by experts who worked hard to create a fair document to allow the parties to do more business together. I am very proud of the United Fresh Produce Association as they continue to provide tools for membership to help them be more effective and profitable.”
“In today’s age, transportation contracts are a necessity,” said James Lee, Vice President, Legal Affairs, Chop Tank Transport. “As produce is an exempt commodity, and produce transportation is unregulated per se, the importance of United Fresh Produce Association and TIA coming together to create a fair and ethical model contract to be used by both shippers and logistics providers cannot be stressed enough. I am proud to be even a small part of the membership from both organizations who contributed their time, energy, and expertise in order to make this happen.”
The Broker/Shipper Transportation Agreement template is a free resource for United Fresh members and can be downloaded at http://www.unitedfresh.org/resources. For more information or questions about the template, contact Dan Vaché, Vice President, Supply Chain Management and staff liaison to the United Fresh Supply Chain Logistics Council at dvache@unitedfresh.org or 425.629.6271.
by Northwest Cherry Growers
With the season drawing practically to a close, the Northwest Cherry Growers are reporting a preliminary count of cherry shipments totalling 20.52 million boxes (20-pound equivalent). That’s less than 00.25% variance from the NWCG round 3 crop estimate published on May 29th, though lower in May and higher in June volume than the curve projection anticipated. Not only was it the earliest crop in at least 20 years, but it was also bigger than all but two of them (2012, 2014) and over in 81 days.
June saw a record 12.6 million boxes, which included accelerated volume by growers working to stay ahead of the heat waves. The Northwest has seen high temperatures over the past few years, but the record-shattering heat was an entirely different event. Statistically speaking, a 1-in-400 years event. Early season weather challenges also reduced the northwest crop, including an estimated 300,000 boxes of Rainier cherries.
July was the smaller of the two months this season – something we haven’t seen since 2005 (7m June, 4.5m July) – but still delivered 7.4 million boxes. May shipped just over 380,000 boxes and August saw just over 70,000 boxes. An August total that low hasn’t been recorded since the 2000 season. Exports were strong this year, coming in just over 30% of the shipped crop.
Yakima Valley apples and stone fruit – grossing about $6500 to Boston.
Produce shipments are big business out of the Salinas Valley, according to a new report.
Agriculture pumped $8.1 billion into the economy of California’s Monterey County in 2014. The report, Economic Contributions of Monterey County Agriculture was prepared by Agricultural Impact Associates for Eric Lauritzen, the county’s agricultural commissioner. The last such analysis was for 2011.
California’s drought is now in its fourth year, but has had little effect thus far on total production in the county, compared to the Central San Joaquin Valley and its dependence on federal and state water projects. Agriculture’s share of Monterey’s direct economic output was unchanged from 2011 at 18.5 percent, but rose from $5.1 billion to $5.7 billion.
The $8.1 billion in 2014 impacts amounts to nearly $1 million every hour – $926,757, to be exact – according to the report. Farm production totaled about $7 billion; value-added food processing, $1.1 billion. Wineries accounted for nearly half of value-added.
Crop diversity has slowly declined since 2005, the report finds, making the region more vulnerable to fluctuations in the strawberry market, for one. That’s so even though as many crop types are grown in the area as ever.
“It means that a small number of crops have grown to represent larger pieces of the economic pie,” the report says. “Strawberry shipments for example, accounted for 10.7 percent of the county’s overall production value in 2004, but expanded to 19.9 percent a decade later.”
Nevertheless, Monterey’s diversity was rated higher than three other coastal counties: Santa Cruz, San Luis Obispo and Santa Barbara.
The agriculture industry employed 55,702 in 2014, or 23.7 percent of all local jobs, up from 45,140 and 20 percent.
Salinas Valley vegetables and strawberries – grossing about $5500 to Atlanta.
Citrus shipments have declined 13 percent between 2007 and 2012, mostly from Florida.The USDA’s Census of Agriculture shows that citrus acreage declined to 877,701 acres in 2012 due to primarily citrus greening in Florida. The disease affected nearly all citrus crops except tangerines.
What’s more, at just over 13,000 farms in 2012, the number of U.S. citrus orchards dropped a whopping 17% from 2007. As a percent of total fruit and tree nut acreage, citrus in 2012 accounted for 17 percent of total U.S. orchard acreage, down from 20 percent in 2007 and 24 percent in 2002.
U.S. grapefruit production tumbled from 156,869 acres in 2002 to 88,393 acres in 2012, while orange acreage slid from 987,743 in 2012 to 670,386 acres in 2012.
Headed the other way, U.S. citrus imports have increased over the last decade, rising from 419,053 metric tons in 2002 to 840,103 metric tons in 2014.
An exception in U.S. citrus acreage shows tangerines have experienced remarkable strength. The USDA reports tangerine acreage in the U.S. rose from 31,419 acres in 2002 to 36,965 acres in 2007 and 42,289 acres in 2012. In a 10-year period where total citrus acreage sank by 32 percent, tangerine acreage shot up 34 percent.
Most tangerine acreage increases have come from California, with a fourfold increase in acreage (8,058 acres in 2002 to 33,465 acres in 2012). The state now accounts for 80 percent of all mandarin acreage in the U.S. Slumping like other varieties, Florida’s tangerine acreage dropped 60 percent from 2002 and 2012.
Like Florida, will California eventually have to deal with the ravages of HLB? California continues to expand the quarantine for the citrus greening (Huanglongbing or HLB) carrying vector, the Asian Citrus Pysllid (ACP). The California Department of Food and Agriculture says ACP county-wide quarantines are now in place in Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, Tulare and Ventura counties, with portions of Fresno, Kern Madera, San Benito, San Joaquin, San Luis Obispo, and Santa Clara counties are also under quarantine.
Despite much research money devoted to the quest, there is no cure for citrus greening yet. Thankfully, the CDFA notes that “HLB has been detected just once in California – in 2012 on a single residential property in Hacienda Heights, Los Angeles County.”
Southern California citrus – grossing about $4500 to Dallas.
Ambrosia and KIKU brand apples continue to be bright spots in the apple category according to the latest retail scan data available from Nielsen Perishables Group.
Data released recently shows that for the four weeks ending May 23, 2015, total U.S. sales of Ambrosia had the strongest growth rate (up 157 percent) among the top 10 apple varieties. Ambrosia was one of only two apples — the other being Honeycrisp — in the top 10 to show an increase in dollar volume performance.
The larger Ambrosia crop has provided savvy retailers with an opportunity to continue to sell this great apple longer into the season, says Steve Lutz, vice president of marketing at CMI. “The story is, consumers continue to seek out and buy Ambrosia as long as retailers carry it,” said Lutz. “When you look at the entire apple category and see that only two apples in the top 10 are showing sales increases, it really shows the emerging following Ambrosia has with consumers. This is exactly the type of growth we saw with Honeycrisp a few years back.”
The May scan data also revealed a second consecutive record sales month for KIKU brand apples. Boosted by imports from New Zealand, KIKU jumped into the top 15 powered by a 305 percent increase in sales, with volume increasing by 420 percent.
“Imported KIKU are clearly generating fresh sales for the apple category,” said Robb Myers, Director of Sales at CMI. “Of the top 15 apples nationally, KIKU’s performance increase was far and away the strongest in the category,” said Myers. He added, “This is great news because it shows how branded apples like KIKU can generate incremental sales for retailers even during the heart of the summer fruit season.”
Myers added that supplies of New Zealand KIKU will be available through the summer months into August. “We anticipated that the strong sales success of KIKU would continue, and we’ve been regularly receiving fresh imports to supply our customers in the U.S. market.” Total apple category volume moved up slightly by 2.3 percent during the month of May. However, declining retail prices offset the volume increase leading to an overall decline in apple category dollars of 6 percent.