Pricing comes down again as watermelon supplies come up

Watermelon supplies are ample again.

“After a slow start to spring crops in South Florida and Northern Mexico, the volume is coming online right now in a good way. The crops are healthy and yields are good so there’s been a major change in availability in the last week,” says Mike Martori of Stella Farms based in Scottsdale, Arizona.

Both growing regions were delayed--Florida had experienced a few bouts of freezing temperatures which slowed things down. Mexico also had cooler weather but the last growing region there, Guaymas, had a crop failure which contributed to the limited availability. Current Mexican supplies are coming from Hermosillo.

Central America finishing
At the same time, import watermelon from Guatemala and Honduras is just wrapping up.

Volume of watermelons is similar to a little above average compared to a year ago, though thanks to the delayed start, supplies feel more abundant. “It feels like a lot more because it was so short for the last month that there hasn’t been much movement. What’s not uncommon is when you have a shortage, the retail prices go up and consumption decreases. And then when the volume comes online, you end up with extra because it takes awhile for consumption to catch up with the changing supply levels,” says Martori.

Demand is good for watermelon and expected to grow weekly from now until it peaks for the 4th of July. “Part of that is promotional activities for Memorial Day and July 4th but a big part of it is also rising temperatures. A lot of areas are not in early summer weather yet so every week that goes by, it warms up in the major markets in the Midwest and Northeast and that drives consumption,” says Martori.

Pricing dropped down
As for pricing, the recent high pricing has come down dramatically and is average to below average on both Mexican and Florida fruit, though the market isn’t under as much price pressure on Florida fruit as it is Mexican. “The pricing is largely just a result of the supplies increasing faster than demand. It’s not uncommon when there’s a really tight market that if a lot of volume comes online, you don’t just drop down gradually or to historical norms. A lot of time you drop below it for awhile because the system isn’t really prepared for the volume,” says Martori.

Looking ahead, Florida will continue to ship watermelons for another four to six weeks and Mexico is anticipated to continue for at least that long as well. And in mid-May, Texas production will begin, though that region is also delayed in its start.

For more information:
Mike Martori
Stella Farms
Tel: +1 (480) 588-7012
mike@stellafarms.com 
www.stellafarms.com 


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