Supplies of grapes are running very short right now, causing the market to strengthen. Demand is good, however suppliers say that expected volumes from Mexico are not being realized. Prices are higher than at this point last year, and are not predicted to ease until California's San Joaquin Valley commences in July.
"We are currently running very short on grapes," said Justin Gonzales of VBZ Grapes. "As a result, market activity has been strong. Prices are in the mid $20s to low $30s and we don't see that changing until the San Joaquin Valley begins next month. Even then, strong volumes are only expected towards the end of July so we could see high prices for a while. They are much higher than last year when the volume was there."
"Organics are also seeing strong prices, in the mid $30's," he continued. "We also won't start organic grapes from SJV until the first week of July. Pricing will remain strong until the end of July, when we will start to have plenty of volume."
No indication that volume would be that low
One of the main concerns for suppliers is that there was no indication from farmers that the volume from Mexico would be that low. Prices had been set based on projected volumes that have not come to fruition. It has caused a headache for shippers who are now scrambling to fill orders and meet customers' expectations.
"We just don't know how volume can be that low and nobody knew about it," Gonzales questioned. "There was no forewarning and for some reason, farmers hadn't indicated that there would be such a significant drop in volume. Prices were set based on normal volumes which had been more or less predicted, and retail promotions and associated pricing was set. Now everybody is in the same boat, scrambling to find fruit so they can fill orders."
Newer varieties will have sufficient volume once San Joaquin Valley starts
With Mexico volume so low, and Coachella about to finish for the season, customers are waiting for the San Joaquin Valley to begin in order to get their hands on some of the newer varieties. Gonzales explained that the Coachella Valley is still largely an experimental region when it comes to newer varieties, with extreme heat discouraging farmers from taking risks.
"Flame seedless is finishing up now, with the green seedless seemingly the most available at the moment," he said. "Most retailers are looking for the newer varieties such as Sweet Celebration, Timco, Allison and Timpson which have been planted in limited numbers in the San Joaquin Valley. Coachella gets extremely hot so it is tricky to experiment there and growers tend to stick to what they know. But once we make a start in the San Joaquin Valley, we will have much more availability."
The growing season in SJV has been cooler than usual which producers say is beneficial for the grapes. "It's been a mild spring and temperatures have been conducive for growing excellent grapes," Gonzales noted. "Based on current movement, Coachella is expected to finish within the next two weeks. We are getting excited for the season ahead. So far it's been a challenge but we are looking forward to having more consistent supply as we move into the other California regions."
Strong organic growth a driver to attend Organic Produce Summit
VBZ Grapes is citing excellent growth in the organic sector for its motivation to exhibit at the Organic Produce Summit in Monterey next month. The company is looking to highlight the increase in its organic volume as well as demonstrate the ability to have consistent supply. VBZ is also looking forward to meeting with current and potential customers and will also be launching a new display bin at the event.
"Organic is where we are seeing excellent growth and where most of the headway is," Gonzalez shared. "With increased plantings, our organic volume will be up this year and as a result, VBZ will become one of the largest organic grape shippers in California."
"VBZ will be launching a new retail POS display bin for organic grapes and we will have samples of all the varieties that we will be shipping at the time," he added. "For the most part, we are looking forward to creating new business at the Organic Produce Summit as well as to say hello to our friends."
VBZ Grapes will be at Booth #908.
For more information:
Justin Gonzales
VBZ Grapes
Tel: +1 (661) 725-2971