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Demand for large size Navel oranges never caught up with supply

It's no secret that it hasn't been an easy California citrus season. Navel oranges are ending early as there are about two weeks of shipping left and total production is expected to be down 10 – 15 percent from its initial estimate. However, that is not the biggest challenge this season. The state dealt with an abundance of large size Navels and demand never caught up with supply. Back in October/November, the season started out well. "We were selling Navels at record prices that were in the high $20s," says Garrett Steele with Bravante Produce. However, in December and January, the market started to decline. Prices went down to the low $20s and upper teens. From there, the market went further down until it declined massively in February, March, and April. "Around this time, prices weren't much higher than $15 or $16/box," Steele commented. Right now, pricing of Navel oranges is a little stronger. However, this isn't driven by demand but by the low volume of Navels left in the market.

While there was an oversupply of large size Navel oranges, availability of small fruit was very tight. "They were so limited in supply. It caused pricing to go up from $15 to $20 in January. Currently, it is pushing up in the $30 range."

Due to the lack of small oranges in the market, the transition from Navels to Valencias started early. "We switched to Valencias in April because they were still small in size and high in demand as a result," Steele said. Pricing of Valencias was high from the start of harvest through early May. Right now, it is a bit of a slow period as schools are out or will be out soon. "However, with the start of summer, we hope for our foodservice business to pick up." Valencia oranges are peaking at sizes 72, 88, 113 and 138.

Premium for small lemons
The California lemon industry is struggling with XL sizing as well and a premium is being paid for small fruit. Lemons from Argentina are starting to arrive in the U.S. market, but they don't solve the sizing problem either as the fruit is peaking at sizes 95 and 115, which are retail sizes. With both regions offering large lemons, the expectation is for the availability of small size fruit to be very limited until Mexico starts in July/August.

Lemon harvest in California's District I is pretty much completed and has switched to District 2, the coastal region. "From this region, there is very little Fancy fruit available. It's mostly large size, Choice fruit that runs around $15 to $17/box," Steele mentioned. This is in big contrast to small, Fancy fruit that is much tighter in supply and higher in demand. As a result, pricing is closer to $44/box.

The expectation is for lemon demand to go up in summer. It's a good time for the foodservice industry and they prefer California fruit over fruit imported from South America or South Africa. As a result, prices are expected to go up.

For more information:
Garrett Steele
Bravante Produce
Tel: (+1) 559-638-2929
[email protected]