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Bumper California grape crop expected despite lower acreage

The industry can expect a solid California grape season this year, despite a reduction in total acreage. As the season stands now, good volumes of seedless grapes are being shipped from the San Joaquin Valley, and although they are typically finished by now, there are still Mexican grapes in the market as well. This has created a two-tier market.

"With a record crop and a delayed start in Mexico, we could see weak Mexican fruit on the shelves for another 10 days," observed Ira Greenstein of Direct Source Marketing. "We’ve seen a steady decline in condition, especially on red seedless and the majority of remaining lots are not able to meet retail specification. Some US retailers are continuing to push the envelope and hang-in with Mexican fruit due to price, but will make the transition sooner than later as rejections mount."

"Growers and shippers in California have already started packing red, green and black seedless and overall quality and condition has been outstanding," he continued. "Initial reports indicate a crop of 110-120 million boxes with excellent opportunities to promote through the balance of the summer and into the fall."

Full transition to California red seedless expected this week
Despite low prices for remaining Mexican red seedless grapes, retailers are being encouraged to make the full transition to California fruit. Reports are that quality has declined for Mexican fruit, and shelf life and condition is limited. As a result, it is expected that the full transition to California red seedless grapes will happen by the end of the week.

"Some proprietary varieties like Sweet Celebration are faring better than Flame Seedless, although with fresh-packed California supplies readily available, it’s hard to justify continuing-on with inferior fruit from Mexico," Greenstein said. "Pricing on Mexican Flame Seedless ranges anywhere from consignment – $10.95 FOB with condition being the determining factor. Marketers in California are gearing up for the season with many packing good volumes of excellent quality Flame Seedless. Pricing in California currently ranges from $14.95-$15.95 on medium/large, $16.95-$17.95 on large and $18.95-$20.5 on x-large with the mostly market at $18.95. Look for the industry to make the full transition out of Mexico and into California red seedless by the end of this week."

Mexican green seedless still doing well
Green seedless grapes from the San Joaquin Valley are yet to arrive in any great volume, and high temperatures this week are expected to put a lid on production in the short term. Suppliers say green seedless grapes from Mexico are still in good condition, unlike their red counterparts, and are thus a viable option for retailers. Additionally, there is still decent volume crossing into the US.

"According to the most recent USDA Shipping Report, more than 500,000 boxes of green seedless crossed into Nogales last week," Greenstein noted. "Expectations are to see overall volumes begin to wind down for the season, but we could see continued volumes shipping from Nogales for another seven days. Pricing on good quality Mexican Sugraone currently ranges from $10.95-$12.95 depending on size and condition."

Meanwhile, pricing in California is slightly higher, "Currently, prices range from $18.95-$19.95 on large and $20.95-$22.95 on x-large. Look for FOB’s to adjust lower as production comes fully online over the next few weeks. Retailers should take advantage of excellent opportunities to promote through the duration of the summer, as overall consumer support should be very strong."

Black seedless and organic
The picture for black seedless and organic grapes is similar to that of the red seedless, with declining volumes and quality from Mexico. However, Greenstein pointed out a difference, which is that promotable volumes of fruit from the San Joaquin Valley are still a few weeks away, with only a small amount coming through at the moment.

"After this week, marketers for black seedless will have few outlets available and will need to liquidate remaining supplies in the terminal markets," he said. "California harvest schedules for Summer Royals are already underway with pricing ranging from $18.95-$20.95 for premium quality fruit. Look for promotable volumes of California black seedless by the first of August."

"Only a few straggling lots of Mexican organic seedless grapes remain with the majority of fruit not able to meet retail specifications. Retailers are poised to make a smooth transition to California supplies as growers are packing good volumes of red and green organic seedless this week. Pricing currently ranges from $22.95-$24.95 for both colors and expectations are to see excellent opportunities to promote towards the end of the month."

For more information:
Ira Greenstein
Direct Source Marketing
Ph: +1 (914) 241-4434
ira@directsourcemktg.com
www.directsourcemktg.com


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