Archive For The “News” Category
In the USDA’s Fruit and Tree Nuts Outlook, released in July, the institution reports U.S. fresh papaya imports surpassed the half-billion-pound mark for the first time last year, reaching a record of 501.2 million pounds.
The 2022 Census of Agriculture from USDA, NASS reports that very little acreage was used for tropical fruit production in the United States. Despite limited domestic production of tropical fruits, their popularity has increased exponentially in recent decades.
Papaya imports
The year 2023 marks the fifth consecutive year that the country has seen an increase in papaya import volumes. The report shows that higher imports pushed per capita availability to 1.51 pounds per person, a new high.
Twenty years ago, papaya per capita availability averaged 0.75 pound
Mexico is the largest papaya exporter, accounting for 82% of the volume on average over the last five years.
Earlier this year, fresh papaya imports decreased slightly, partly due to lower volumes from the second-largest exporter to the United States, Guatemala. Although imports from Mexico are only down 1%, shipments from Guatemala are down 37%, according to FAO’s Major Tropical Fruits Market Review.
Guatemala’s papaya production decrease can be attributed to damage caused by “torrential rainfall, flooding, and mudslides from a tropical storm in October 2022.”
Retail prices for Maradol and Tainung papaya varieties from Mexico and Central America averaged $1.09 per pound in the first half of the year, 12% higher compared to last year’s first six months.
Tropical fruits
Most tropical fruit shipments come from Mexico and Central and South America.
From January to May 2024, the combined import volume for bananas, pineapples, mangoes, and papayas totaled 5.77 billion pounds, down 1% from the same period in 2023.
Bananas represented 67% of the tropical fruit import volume, followed by pineapples at 22%, mangoes at 8%, and papayas at 4%.
Higher banana and pineapple imports were offset by slightly lower papaya import volumes and much lower mango imports.
A continuous rise in global shipping and container rates is causing concern in Western and Eastern markets across the globe.
Led mainly by tight capacity, strong demand, and the ongoing disruption in the Red Sea, rates are approaching record highs seen during the COVID-19 pandemic.
Shippers and forwarders in Brazil report they are seeing container freight rates continue to surge on northbound trades to the U.S., Central America, and the Caribbean.
Forwarders say rates have already doubled since mid-June and show little sign of easing until November or December, if not later.
One source told the Journal of Commerce that rates have reached $5,000 to $6,000 per FEU, “depending on how late you try to book.”
“Freight rates are rising drastically,” Fabrizio De Paulis, managing director of Brazil forwarder De Paulis Logistics & SCM Eireli, told the Journal of Commerce. “There’s been a capacity shortage in July, with many vessels sold out, especially Maersk services.”
Highlighting the boom in Brazilian exports to the U.S., the U.S. Census Bureau reported that goods worth $17 billion were imported into the U.S. from Brazil in the first five months of the year, up from $14.6 billion in the same period last year.
Space on the Brazil-USEC trade lane has become very critical over the last few weeks, and all the main carriers operating on this route — Hapag-Lloyd, MSC, Maersk, and CMA CGM — have been increasing their rates,” Mauricio Fisch, director of Brazil forwarder Ocean Express, told the Journal of Commerce.
“If forwarders want a booking without having a service contract with some carriers, they must book the quick spot option at a much higher rate. Otherwise, they have to wait four or five weeks for a booking,” Fisch added.
A similar situation is occurring on European and Asian routes as the Red Sea disruption continues, with Houthi rebels targeting ships linked to Israel, the U.S., or Britain as part of their support for the militant group Hamas in its war against Israel.
According to authorities, this has reduced transit in the Suez Canal by nearly 50% since December 2023, resulting in a reduction of around 40 vessels per day.
Consequently, there has been a 70% increase in vessels navigating the less direct Cape of Good Hope, which increases the distance traveled by 40% and adds delays of two to five weeks.
Rural News Group from New Zealand reports that as the World Trade Organisation predicts a 2.6% increase in exports for 2024, the global shortage of shipping containers and congestion at some Asian ports, is raising the cost of trade. Rates in the region have nearly doubled in the last three months.
On the positive side, the outlet says the current rise in shipping costs is expected to be less inflationary than the surge experienced during Covid-19 as container production, largely driven by demand to move exports from China to the West, has increased substantially over the last few months.
Additionally, the disruptions experienced in the Panama Canal appear to be easing. Although a much smaller chokepoint than the Suez Canal, it still accounts for around 7% of global seaborne trade. The ‘Panama Problem’ was caused by an extended drought in 2023 that reduced the number of vessels able to use the canal and led to draught limits that reduced operating weights.
Currently, water levels in Lake Gatun, the main body of water that feeds the system, have been rising steadily since April, meaning that by early August, up to 34 ships per day will be able to use the canal. This is a major increase on the 24 vessels per day that had access at the start of the year and not far behind the more typical 36-28 vessels that use the canal in normal times.
Meat was the main ingredient in most Independence Day dishes and a primary driver of high supermarket bills for the recent holiday. An American Farm Bureau Federation report suggests to save money, Americans should focus on preparing mostly side dishes.
The report states hosts feeding a group of 10 will spend an average of $71.22, a record high price that can be first and foremost attributed to inflation. The cost of food for the recent 4th of July holiday was 5% more than last year and 30% higher than in 2019 before the Covid-19 pandemic.
This is the first year that grocery costs have surpassed $7 per invitee, with the total meal costing $7.12 per person.
In 2023, U.S. consumers spent a total of $9.5 billion on food.
According to the World Metrics Report for 2024, approximately 190 million pounds of beef were bought in preparation for the July 4th celebrations.
Two pounds of potatoes cost an average of $1.53, 17% less than last year, recovering from record-high prices due to weather-related production decreases in recent years.
Chicken is the only protein that has decreased in price; 2 pounds of chicken breast will cost an average of $7.83, a 4% decrease since 2023 and down over 13% from the record high in 2022.
The survey pulls prices for a complete, homemade cookout consisting of cheeseburgers, chicken breasts, pork chops, potato chips, pork and beans, fresh strawberries, homemade potato salad, fresh-squeezed lemonade, chocolate chip cookies, and ice cream.
Meat costs are at an all-time high. According to the report, 2 pounds of ground beef cost an average of $12.77, up more than $1, or 11%, from last year. The prices of pork chops and cheeseburgers are up as well.
Lemonade won’t come cheap either. Lemon production is estimated to fall over 16% this year due to the citrus greening disease outbreak in California, where most U.S. lemons are produced. These supply effects have raised lemon prices by 13% on average from last year to $3.20 for 1.5 pounds.
Strawberries and potato chips are both higher than in the last two years. Two pints of strawberries cost $4.61 on average, less than its high in 2021.
The World Metrics report notes that fresh fruit salads are prepared by 41% of Americans for their celebrations.
Fruit salads are one of the most popular desserts for the occasion, usually including a mix of berries, watermelon, and even bananas, the classic red, white, and blue salad.
Guatemala remained the primary exporter to the United States in 2023, reaching a record export value of $280 million.
Most melons consumed in the United States are grown domestically, but imports are capturing a growing share of the fresh melon market.
The market share of imported melons has increased significantly over the decades – from an average share of less than 10% during the 1980s and 1990s to about 37% in recent years.
Melon imports rose for the third consecutive year to a record high of 3.1 billion pounds, with ample supplies from Guatemala, Honduras, and Mexico.
In 2023, the estimated domestic availability of melons was 7.54 billion pounds, up 1% from the previous year. But, the import share of domestic availability for all melons reached 41.4% in 2023, the highest on record.
Increases in watermelon and honeydew supplies helped offset a decline in domestic cantaloupe production, and watermelon continued to account for over two-thirds of per capita melon availability.
Cantaloupe imports increased 6% in 2023. Over the last three years, 65% of fresh cantaloupe imports have come from Guatemala, the rest of the variety imports come from Honduras and Mexico.
Between July 2023 and January 2024, over 90% of U.S. honeydew imports came from Mexico, 48%, and Guatemala, 45%. The remaining 7% came from Honduras.
Watermelon import volume also increased in 2023. Most watermelon imports are seedless varieties from Mexico and Guatemala. While watermelon makes up 58% of melon import volume, the import share of domestic availability for watermelons is lower than cantaloupe or honeydew.
By Kenneth Cavallaro ALC Boston
Some of my earliest memories involve fresh produce – watching cardboard crates of plump tomatoes and glistening peppers being unloaded at the docks of my family’s wholesale produce warehouse, sampling sweet berries, and vigilantly checking for damaged products beside my grandfather, father, and uncle. As the third generation of a produce family, fresh produce was a major part of my childhood.
At the time, I simply enjoyed the deliciousness of fresh fruits and vegetables and thought little of where they were grown or how they reached my kitchen table. As an adult, I now find myself fascinated by the process. How long does it take to pick a crop and get it from the farm to a customer’s table? What practices utilized during transport best preserve product quality? A great majority of our country’s produce comes from California and Mexico, with their ideal growing climates and lengthy growing seasons. In 2022 alone, 590,906 truckloads of imported produce were shipped from Mexico to the U.S. in 40,000-pound loads. How can so much perishable freight remain fresh when traveling across the country?
Danny Mandel, founder and former CEO of SunFed in Nogales, Arizona, has over 30 years of experience in the produce industry and was able to answer these questions. Mandel reports that it takes one day to pick, pack, and load a fresh crop and another two to five days to reach its final destination. What keeps fragile produce so fresh after this transport time? It requires growers to harvest produce at the optimal time and package it in sturdy containers that allow air to circulate while preventing bruising. Refrigerated van drivers and transport companies further extend product longevity with stringent adherence to temperature requirements – which vary by fruit and vegetable variety. Following temperature requirements on bill of lading instructions and carefully monitoring temperature gauges extend freshness and prevent the formation of mold. Furthermore, practices such as loading and unloading quickly help keep any adverse outside weather conditions or drastically different temperatures from damaging the product.
According to the USDA, Postmaster General Albert Burleson launched the Farm to Table program in 1914. The program consisted of picking up produce and other farm fresh items and delivering the goods as quickly as possible to retailers, ultimately reaching America’s kitchen tables with healthy products still as fresh as possible. Previously, unconsumed produce was destined for the compost heap. Now, growers could sell farm goods for financial gain to more consumers. The advent of temperature-controlled freight further made it possible to deliver products in a timely manner.
With the high demand for fresh produce, consumers can expect the industry to continue to advance in delivering produce as quickly as possible. Greenhouses could allow produce to be grown in colder states to lessen the stress of relying on warmer areas to support our heavy produce consumption and further decrease the transport time from farm to table. There will always be a need to transport the product, but more growing areas across the country would mean increased product freshness by reducing transport time.
Getting produce from the farm to your table as quickly as possible makes for a healthy and enjoyable meal. After 110 years, Postmaster Burleson’s Farm to Table idea continues to make great strides and improve consumer culinary options. The next time you stop by your local grocery store for salad fixings, keep in mind the growers who cultivated a beautiful crop, the dedicated drivers who quickly and safely transported thousands of pounds of product, and even the transportation broker who monitored the delivery of your load.
*****
Kenneth Cavallaro, Jr. is a carrier manager in the Boston office. He began his career at the Allen Lund Company in February of 2019. Kenneth has been in the transportation industry since May of 1999. He holds a Bachelor of Arts in Communications from Salem State University.
kenneth.cavallaro@allenlund.com
Michigan growers are national leaders for several specialty crops. The state ships fruits and vegetables every month of the year, with the peak volume in August and September.
Here are some highlights of the scope of fruit and vegetable production, according to the Michigan Department of Agriculture.
Apples: In 2022, 1.36 billion pounds of apples were harvested in Michigan, ranking second in the nation. About 50% of the harvest was used for processing, yielding a farm value of $108 million. Fresh market apples account for a farm value of $34 million at 707 million pounds. There are more than 14.95 million apple trees in commercial production, covering 34,500 acres on 775 family-run farms. Orchards are trending to super high-density planting (approximately 1,000 or more trees per acre), which come into production and bring desirable varieties to market quickly.
Asparagus: Michigan ranks first in the nation for asparagus production, producing up to 26 million pounds annually. Michigan growers harvest approximately 9,500 acres annually.
Blueberries: In an average year, Michigan blueberry farmers produce more than 70 million pounds of more than 30 varieties of highbush blueberries. More than 50% of all Michigan blueberries are shipped to the fresh market. Michigan’s blueberry crop is harvested from more than 14,000 acres. Michigan blueberries are grown, harvested, packed and processed by 500 family farms annually, contributing more than $130 million to the state’s economy.
Cucumbers: Michigan ranks first nationally in the production of cucumbers for pickling. In 2022, Michigan produced 216,726 tons of pickling cucumbers with a value of $45.5 million. In addition, the state produced 53.6 million pounds of cucumbers for the fresh market worth $17.7 million.
Grapes: Michigan uses more than 93,000 tons of grapes for the production of wine and juice. Michigan has 10,900 acres of vines on 390 farms, making Michigan the eighth-largest overall grape-producing state in the nation.
Onions: A majority of Michigan onion production occurs in south central and southern Michigan in the counties of Allegan, Barry, Eaton, Ionia, Kent, Newaygo, Ottawa and Van Buren. Michigan onion production in 2022 was 85 million pounds, with a total value of $18.7 million.
Peaches: Most Michigan peaches are grown in the west central to southwest corner, close to Lake Michigan, with additional production in the east along Lake St. Clair and in the northwest Grand Rapids area. In 2022, Michigan produced more than 23 million pounds of peaches valued at more than $20.1 million. Michigan’s Red Haven peaches are famous throughout the country, with recent new Michigan varieties including the southwest Michigan Flamin’ Fury and Stellar peach series gaining popularity.
Potatoes: Michigan is ranked ninth in production of potatoes, generating $2.45 billion in economic impact in 2022 and nearly 1.65 billion pounds of potatoes harvested from as far south as Monroe County to as far north as Iron County in the Upper Peninsula. Michigan is the nation’s leading producer of potatoes for potato chip processing. Montcalm County has more harvested acres than any other county in Michigan.
Pumpkins: In 2022, Michigan generated $16.4 million from the production of 93.1 million pounds of pumpkins. In 2022, Michigan produced 164 million pounds of squash for fresh or processed use, totaling $39.5 million. Michigan leads the nation in the production of squash.
Snap beans: Michigan snap beans are grown in green, purple, and yellow varieties throughout the July through September season. Michigan produces fresh and processed snap beans. In 2022, 16,800 acres were planted with 16,500 harvested, amounting to a total value of $31 million, while 21.4 million pounds of fresh beans totaling $15.6 million were sold.
Sweet corn: Michigan sweet corn is enjoyed throughout the state in several varieties. On average, Michigan produces 86 million pounds of sweet corn for the fresh market worth $21.8 million.
Tomatoes: Michigan grows tomatoes for both fresh and processed uses. On average, Michigan produces 120,100 tons of tomatoes for processing and 74 million pounds of tomatoes for fresh market, with a total value is $48.4 millio
Citing extremely low fruit volumes, bad weather, and difficult markets, B.C. Tree Fruits cooperative of Kelowna, British Columbia has reportedly dissolved and closed its doors on July 26.
Formed in the 1930s, the organization sent a letter to its members recommending they “immediately search for another alternative to market your fruit for the balance of the 2024 season.”
The letter, obtained by Global News Canada, went on to say the board of directors could not “effectively operate the business and provide pool returns to growers,” and that it is “taking steps to obtain court direction and assistance to properly wind down the Cooperative to maximize recovery for all stakeholders.”
The cooperative includes more than 230 members, who now must find alternative buyers with the Okanagan apple harvest looming. The CBC reported B.C. Tree Fruits has faced financial challenges and grower unrest for the past few years, voting to close a packing house in 2022.
Growers held a vote, unsuccessfully, to dissolve the board of directors, and have now asked for government intervention to support the British Columbia tree fruit industry.
Rabobank has issued a new RaboResearch report which points out despite water availability challenges in some producing countries, avocado production and trade will continue to grow.
The report relates Latin America is the top exporter, while the U.S. continues to be the primary importer.
Competition and margin pressures, especially in South America, are likely to move the market toward consolidation, the report said.
Global avocado exports are expected to surpass 3 million metric tons by 2025, the report said, with Latin America at the forefront.
Mexico, Peru and Colombia will be the largest avocado exporters, according to Rabobank projections, while Brazil, Ecuador and other countries are emerging as global suppliers.
Demand growth in the European avocado market has spurred increased production in the European Union, mainly in Spain, the report said. However, water availability will limit large-scale expansion of avocado production, and further area expansion is not expected for European production, according to the report.
Africa is witnessing steady growth, notably in Kenya and Morocco.
U.S. demand for avocados continues to climb, with 2023 imports at a record 1.26 million metric tons, up 11% from 2022.
Mexico commands a 90% share of U.S. avocado imports.
Europe’s demand for avocados is predicted to grow, though its reliance on imports will expand in the years ahead, the report said. Demand also is rising in other regions.
“Opportunities abound in Asia and Latin America, with untapped markets poised for growth. South American countries, in particular, are ripe for increased consumption, pending promotional and marketing initiatives,” David Magaña, senior Rabobank analyst for fresh produce, said in the report.
Asia’s imports have surged by 29% in 2023, led by China.
While the hass variety now dominates global trade, Magaña said other avocado varieties will likely grow.
“While hass avocados will continue to dominate, hass-like varieties will gradually gain ground, particularly those with higher yield potential,” Magaña said in the report. “The industry faces price pressures as global production volumes rise, with quality and size being pivotal in the American and European markets.”
By Kat Ball and Jim Brister ALC Vancouver, BC
Well, it’s alright, we’re going to the end of the line. As The Travelling Wilburys appreciate, trains are an important and instrumental part of our nation’s history. America’s first intercity railroad, the 13-mile Baltimore and Ohio Railroad was completed in early 1830. Canada’s first railway line opened in 1836 with the Champlain and St. Lawrence Railroad, which connected two sides of the river outside Montreal. Nearly 200 years later, there are seven major railroads operating in the United States and two in Canada. These networks join North America with unlimited access to every major port, city, state, and province. And while the end of the lines exists within this network, there is no end in sight for the utilization of this mode in logistics. Intermodal shipping continues to be a popular choice for many shippers to move their goods to market across North America.
There are many features and benefits of intermodal (rail plus truck) shipping that make it an attractive option for logistics:
- Nationwide rail infrastructure— Shippers can speed their goods to market with door-to-door service, which includes impressive weekly rail schedules to multiple destinations.
- Non-stop rail service— Public rail stops multiple times to add or remove containers, which often subjects fragile and perishable items to prolonged weather extremes, shifting, and damage. For the rail portion of dedicated commercial intermodal, the networks operate non-stop, coast to coast, which means more product moving and fewer delays.
- Increase overall capacity— Intermodal allows for additional capacity compared to truckload shipping. It provides access to a large pool of refrigerated and dry van containers with different specifications available (53′, 48′, 40′ containers, high cubes). In addition, intermodal also has a large network of drayage options from all major terminals in Canada and the U.S.
- Product protection— 24/7 monitoring via GPS, remote temperature adjustments, and standardized container sealing for unparalleled security, a top concern for many stakeholders facing increased theft, fraud, and scam incidents in the trucking market.
- Cost savings— Intermodal is more cost-effective than over-the-road trucking and allows for savings on freight costs compared to using trucks alone. By providing competitive and consistent pricing, budget fluctuations can be minimized.
- Time savings— One point of contact door-to-door; using a broker who manages intermodal and will handle all customs clearance, rail billing, and third-party communications on behalf of the shipper.
- Environmental, social, and governance focus—Intermodal shipping has less impact on the environment than over-the-road trucking. Its carbon footprint is a fraction of that of long-haul trucks, and it has a different set of regulatory mandates than trucks. Stringent and regulated security measures safeguard goods throughout the supply chain.
Looking down the line to Q4, most reports predict intermodal volume to grow into Q4. Key indicators to watch are domestic container volume, which is largely influenced by shippers’ inventories, consumer spending, and retail sales. Retail sales are growing, albeit slowly. This, coupled with lower retail inventories, bodes well for volume growth in intermodal. In addition, many experts are looking at the truck market’s indication of a freight rate increase. Trucking freight indexes fell 1.8% month-over-month mid-year, looking like rates have hit the bottom. As rates move up, rail will become a more favorable option for the end of 2024. So, All Aboard, it looks like it will be an exciting end to 2024!
*****
Kat Ball is the general manager of the ALC Vancouver, BC office. She received her undergraduate degree in English from Simon Fraser University, followed by a post-graduate diploma in Marketing and Sales Management from the University of British Columbia. Kat began working for ALC Vancouver, BC (formerly United World Transportation) in 2006, gaining experience in various roles. In April 2023, the Allen Lund Company acquired United World Transportation and Kat aided in the transition as assistant general manager. The following April, she was promoted to general manager.
kat.ball@allenlund.com
*****
Jim Brister is the business development manager of the ALC Vancouver, BC office. As a Commerce Business graduate out of the University of British Columbia, he has worked across the building materials and construction industries living in both Canada and the U.S. before starting United World Transportation in 2003. Now as part of the Allen Lund Company Jim continues to enjoy the challenges and pace of the transportation world.
jim.brister@allenlund.com
Prosper Africa, a presidential initiative to strengthen strategic and economic partnerships between the United States and Africa, announced the U.S.-Africa Trade Desk’s (USATD) first trade agreement, valued at $56 million for 700 containers of South African table grapes.
The USATD, a joint venture between Prosper Africa and Afritex Ventures, aims to bridge the gap between African agricultural suppliers and U.S. buyers.
This transaction is expected to help U.S. retailers keep produce prices stable for consumers during the off-season, when commodity prices typically rise by 35%.
Financed with a trade facility structured by EAS Advisors and Scipion Capital, the deal increases value for African producers by providing firm purchase prices and reducing market volatility.
Shipments will begin the first week of November 2024 and continue through April 2025, filling gaps in the U.S. season.
USATD will facilitate the entire transaction, providing an end-to-end solution bridging the gap between retailers’ U.S. and African production needs.
“I am excited not only to celebrate the first USATD agreement but also that South African grape growers will have the ability to export directly to U.S. retailers on a large scale,” said Prosper Africa coordinator, British A. Robinson.
“Prosper Africa is proud to work with African companies to help them take advantage of the African Growth and Opportunity Act (AGOA) and facilitate their partnerships with U.S. buyers who want to diversify their suppliers and find high-quality products for their consumers.”