Domestic supplies of oranges are good and improving as the season gets going.
In California, Keith Wilson with Cecelia Packing Corporation in Orange Cove, CA notes that the color is improving on its crop which is progressing well. “The season is better this year than last year in supply and demand and it’s encouraging that movement is decent and the fruit is getting better,” says Wilson. “All things look pretty good right now on navel oranges.”
Photo: Cecelia Packing Corp.
Along with California, Florida is also in production as is Texas and some light volume from Mexico. “At this point in the season we’re out of the woods as far as competing with Chilean and South African imports as we did when we started in October,” says Wilson. “They were still in the marketplace and muddied up the front end.”
Demand for California oranges is steady. “We’re getting to the point where we’re starting to pack for a few export markets and that’s always a good thing, when you’re not solely dependent on the domestic market,” says Wilson. “We find that as more export orders are packed, it helps prevent the domestic market from becoming oversupplied.”
That said, he does say demand from wholesale and foodservice customers is more conservative. “They’re not ordering quite as heavy and are trying to stay somewhat limited because they don’t know how things are going to go for them,” says Wilson.
As for pricing, it is up slightly compared to last season at this time. Last season before COVID-19 hit the marketplace, the orange market had been somewhat depressed. “This year we just haven’t reached those levels on pricing so it’s been a much healthier year for the grower,” says Wilson. That said, factoring into pricing is freight costs—freight to the Midwest and the East Coast are much higher compared to other years and Wilson says it’s put somewhat of a damper on FOB values. “But I think pricing will stay steady. We’ve seen the market settle,” he adds.
Photo: Cecelia Packing Corp.
Meanwhile on the East Coast, GT Parris of Seald Sweet in Vero Beach, FL says its supplies are good right now as well and that it’s mostly working with the Hamlin variety. “We’re seeing what we expected and I’m not seeing any variance than what we originally thought we were seeing on the early varieties. So far, we’re right on pace,” he says, adding that this year’s crop size is so far similar to last year’s crop.
The Florida crop is coming into cooler weather that Parris says is pushing the color on the fruit and increasing the Brix. “We had a lot of rain in November but we’re now seeing the Brix desired by retailers. We’re starting to get the levels from here on out,” he says.
Inconsistent buying patterns
As for demand, Parris notes it started off strong but COVID-19 and potentially the lockdowns seen around North America are influencing buying patterns. “The patterns are up and down. It’s good one week and then down,” he says. “The wholesalers and foodservice don’t want huge amounts of inventory because with the shutdowns, they’re afraid that suddenly they’ll lose half of it again or something like that. So, they’re buying just as much as needed and it’s more wait and see.”
Photo: Seald Sweet
There’s also been a shift on the juicing side of the business. “Some retailers are backing away from in-store juicing programs. It used to be really popular and in the last few years we saw more retailers wanting in-store juicing supplies to get customers in there,” says Parris. “This year because of COVID-19 regulations, we’re seeing a decrease in that.”
As for pricing, Parris says it started off stronger but it’s beginning to dip because of those uneven buying patterns. “The drop was not unexpected and it’s still fairly decent. It’s trying to find the right price,” says Parris.
Parris also notes that while pricing is determined largely by movement, as the season moves into more popular varieties such as Pineapple oranges or Valencias, prices tend to go up because of the stronger demand for juicing and they have better color and higher BRIX.