Sub freezing temperatures late last week in the Murcia area of Spain has terminated the winter Artichoke crop. Typically, the Spanish winter crop yields about 15% of the annual production and helps fill a void in the market before the large production beginning in March. As soon as the weather turns warm the artichokes begin growing. If the weather gets too warm/hot, the artichoke flower opens up, rendering it unsuitable for canning.
There is not significant raw material available in Peru this year to fill the pipeline; therefore the upcoming Spanish crop is very important. The early indication, if the weather cooperates this coming Spring, is for a very high yielding crop.
Mushrooms from China are beginning to arrive from the new season production. Prices will be a bit lower than last year’s as there appears to be sufficient raw material available. The overall quality has been good, and we are expecting to have light colored Pieces & Stems. A true No. 10 can, like our Ambrosia product, has a drained weight of 68oz – watch out for importers who are selling No. 10 cans with only 62oz of product in them!
All species of tuna remain very strong. Most boats have Chinese fishermen on board, and they returned to port for the Chinese New Year a few weeks back, but the fishermen are slow to return to work, thereby keeping the boats in port perhaps for another week or two. Raw material of all species is not plentiful, but canneries are not selling much tuna with the high prices. These are high volume factories which need to be running at full capacity to be efficient, so they are hungry for business, which is hard to come by with the high raw material cost. It is a very difficult time.
In many commodities right now, such as Mushrooms and Tuna, sales are slow due to the downturn in the European marketplace. This is putting some downward pressure on prices, but also putting the tuna canners in a no win situation due to the high cost of raw material.
The weather has been ideal this early in the season for Spanish Artichokes. Very early indications are that the price will be competitive with South American product, aided by the stronger US Dollar. The heavy harvest of the crop will be in March/April.
Keep in mind, however, that a frost can reduce the yield instantly. Conversely, during the heavy growing season of March/April, if the weather gets too hot for any extended period, the artichoke grows too fast to harvest them before they turn into a flower, making them unsuitable for canning, or the fresh market.
We last posted a report on currency, or the foreign currency exchange rate, on September 20, 2011. The US Dollar vs the Euro has traded as low as $1.41 to as high as $1.28 just the other day, to buy one Euro, which increases our purchasing power. To say the least, foreign currency values are volatile, and difficult to predict. We are hopeful that the trend towards a stronger US Dollar will continue, which will help offset rising costs around the world.
The new crop of Mandarin Oranges from China (our only source for several years) is virtually over. Prices have increased again this year due to raw material shortages and strong fresh market demand, as well as a severe shortage of labor in the factories. The quality seems to be fine, but product has become expensive for what used to be a cheap fruit. Mandarins are now more expensive than Pineapple, which may slow demand.
Tuna is a quota item, meaning that after a certain quantity of tuna is imported, the duty rate is increased. The quota is so low that it is used up in the first business day of the year.
The duty rate under quota is 6.5% (loosely, what people refer to as ‘single duty’ tuna); after the quota is reached, the rate goes to 12.5% . Since so much tuna is ‘entered’ on the first business day of each year, it takes US Customs a few months to figure out how to fairly calculate each ‘entry’s’ proportion of the lower duty rate. We typically find out around May. For example, it may work out that all the tuna we ‘entered’ on the first day of the year will take a duty rate of 10%, instead of the lower 6.5%, or post quota rate of 12.5%. So, in reality, there is rarely a 6.5% rate.
Traditional balsamic vinegar is produced from the juice of just-harvested white grapes (typically Trebbiano and Lambrusco grapes) boiled down to approximately 30% of the original volume to create a concentrate or must, which is then fermented with a slow aging process. The flavor intensifies over time while the vinegar is being stored in wooden casks, thus becoming sweeter and more concentrated (denser). Quality is measured in density: the higher the density the better and richer the flavor.
Our Ambrosia Balsamic Vinegar bears the “PGI” seal (Protected Geographical Indication) proving that the product comes from the Modena region; its quality is respected highly by the professional trade. The educated customer should be aware of cheap imitations and look for the PGI seal on the product label.
This year’s grape harvest has been finished in Italy and the raw material (grape must) is in storage. Due to the extreme drought that plagued Southern Europe this summer and fall the crop is about 30% short and the prices are expected to rise.
Up until about a month ago we had been hearing that the Greek Kalamata olive crop looked good and it was supposed to be of average size. However, during the last few weeks the outlook has changed for the worse as olives have started to drop off the trees due to the extreme drought in Greece.
Harvesting of Kalamata olives usually starts in December and lasts about 3-4 weeks. Some part of the crop seems to have been lost already and if it doesn’t rain in the upcoming weeks, more of the olives will fall off the trees. Rain is very important for the growth and maturation of the fruit just before harvest; moisture absorbed makes the fruit sweeter and the yield better. Only hand-picked, sound olives will be processed into Kalamata olives; fallen fruit will be pressed into olive oil.
We should have more information on new crop prices around the end of January. If the dollar continues to get stronger against the Euro, part of the anticipated price increase may be offset by a better exchange rate.
The U.S. Department of Commerce has recently issued their final anti-dumping rates for Chinese mushroom packers, which prevents certain packers from exporting mushrooms to the United States. The rates range by packer, with the lowest being about 13% to the worst case at some 266%. This ruling leaves only a handful of Chinese packers that are expected to export mushrooms to the U.S.
It’s too early to estimate the crop, although some sources are claiming that the acreage is lower than last year and fresh mushroom supply may be tight. The packing season usually starts in November in Fujian province and lasts until around April. Current price indications for the new season are at around last season’s levels.
