While there's a little less watermelon supply available for Eastern and Midwestern U.S. markets than this time last year, the supply for markets in the Western U.S. is much, much higher than last year. "This is due to increased plantings and a relatively early start to production in Central California," says Michael Martori of Stella Farms.
Georgia/South Carolina/Alabama: Watermelon supply in these regions is below average as Georgia production is about finished, as is South Carolina and Alabama.
© Stella FarmsMartori says North Carolina's growing conditions have been more challenging, though following a cooler-than-normal spring, which delayed the start of production.
Missouri/North Carolina: The majority of Eastern watermelon production is coming from Missouri and North Carolina. "Both regions are a little behind schedule due to cool, wet weather this spring and are still just getting ramped up. Other than that, growing conditions have been favorable, and the crops in Missouri look very good," says Martori.
North Carolina's growing conditions have been more challenging, though following a cooler-than-normal spring, which delayed the start of production. "This isn't too concerning. North Carolina has been getting more rain than normal, and that could lead to increased disease pressure in the coming weeks," says Martori. "Overall, the North Carolina crop still looks fine, but yields look to be about average, compared to Missouri, where we expect above-average yields."
Indiana/Illinois and Maryland/Delaware: These regions started their production about on time.
Texas: Western U.S. production is coming from Central Texas as well as Southern California and Arizona. Watermelon supply from Texas remains above average as production transitions smoothly from South Texas to Central Texas, which is starting its production on time.
© Stella Farms
The watermelon supply for markets in the Western U.S. is much, much higher than last year.
Arizona/California: Supply is well above average as production from Southern California and Arizona overlaps with Central California production, continuing to ramp up following an on time start to its season. "Barring a major issue, U.S. watermelon production should continue through September and likely run a little longer than average in the Eastern U.S. and possibly end a little earlier than average in the Western U.S.," says Martori.
Overall, in the summer in the U.S., just about every state has some watermelon production. However, the main growing regions for this month and August are North Carolina, Missouri, Indiana and Illinois, Maryland and Delaware, Central Texas, and Central California.
As for watermelon demand, with supply levels above average nearly all summer so far, this has been a major factor in below-average pricing. "Though a lack of demand has been a factor as well. We're not seeing a normal amount of demand, and the assumption most growers would make is that consumers are not feeling very confident about economic conditions and are more conservative with spending," says Martori. "That's translating to lower sales of watermelon at retail, even though watermelon is one of the best values in the produce department."
As many growers and shippers of a variety of commodities have reiterated recently, consumption levels are a concern with disappointing markets on many produce items so far this summer. "Disappointing consumption levels might be the most concerning for growers, because it's the thing we have the least amount of control over," says Martori. "There is a lot of uncertainty about the economy in the U.S., and it's impacting consumer confidence and spending. It's hard to project what consumption levels will do the remainder of this year and next, but hopefully, as time passes and consumers adjust to the "new normal," they will become a little less conservative with their spending, and we'll see improved demand for fresh produce."
© Stella FarmsWatermelon availability in the Eastern U.S is expected to remain slightly tighter through the last week of July, possibly until the first week of August.
What does this mean for pricing?
As for pricing, up until very recently, prices in the Eastern U.S. growing regions have been at historical lows. "June pricing was extremely disappointing from a grower's perspective," says Martori. "Market conditions have tightened up as Georgia finishes and Missouri and North Carolina production runs a little behind schedule. Pricing is now back to historically average levels for this time of year."
He adds that as market conditions tighten up in the Eastern U.S., they are still very loose in the Western U.S., with pricing for Texas, California, and Arizona production continuing to decline since the 4th of July holiday. "They have been at historical lows recently, though we hope to see some improvement in the second half of July," says Martori.
Looking ahead, he expects watermelon availability in the Eastern U.S to remain slightly tighter through the last week of July, possibly until the first week of August. However, by the first week of August, production from Indiana/Illinois and Maryland/Delaware should be ramped up enough that market conditions will likely loosen up again significantly.
As for the Western U.S.? "Availability should continue to be above average throughout July and August. We are hoping pricing has bottomed out and we start seeing improvement, though even as pricing improves, it will likely remain below average for the foreseeable future," says Martori.
On top of demand and pricing challenges this summer for watermelon growers and shippers are continued rising production costs. "They continue to increase every year, and we need sufficient demand for our products to support profitable price levels," says Martori. "We have not seen that demand so far this year. So one of the biggest challenges in produce is figuring out what we can expect on the demand side of the equation and adjusting production levels accordingly. This is so we don't see a continuation of over-supplied markets and the unprofitable returns to growers that result."
For more information:
Michael Martori
Stella Farms
Tel: +1 (480) 588-7012
[email protected]
www.stellafarms.com
