The supply of both cantaloupe and honeydew melons out of Mexico is tighter than anticipated at the moment. "They have surprisingly gotten a little bit lighter," says Scott Vandervoet of Vandervoet & Associates, adding that harvests out of both California and Arizona are also lighter.
Why the lighter supply? Last fall when there was a lot of acreage on seedless watermelons, the market was bad so it's likely that this time around, there was less acreage to start. "We also had a very, very warm late summer/early fall and that brought on some production and it peaked a bit earlier than normal," he says.
Now that the peak supply is behind them though, the markets are being dictated more by the supply than the demand.
This has all pushed FOB pricing upwards in the last few days. "Honeydew has been in the $6-$7 range and now it's closer to $9-$10," says Vandervoet. "Cantaloupe had been around $10 and now it's $12-$13. Each market has come up by a few dollars in the last few days and I think it's because supplies are just a bit lighter."
Pricing updates
As for watermelon, it's "on fire." On the carton market, pricing has held for most of the second half of October/first part of November in the high teens, up to $20/box FOB on 4 and 5-count. "Now it's up $5-$6 and we're looking at around $25 for the 5-count and $22-$23 on the 4-count," he says, adding that more cartons are being packed now than bins which generally happens at this time of year. Though on bins, for the second part of October and the first week of November, they had been moving in the low to mid-.20 cents/lb. range FOB. "You're looking at $154-$160/bin and now we are closer to .30 cents/lb. FOB. I've heard quotes as high as $224/bin FOB. It's a lot stronger and shippers are confident that they can quote higher. Every day we're selling out."
That's indicative of strong demand throughout the country.
Looking ahead, Vandervoet anticipates that the watermelon market will remain tight. "The districts south of the state of Sonora don't generally program to come on until closer to mid-December. So while we will see the continuation of the Thanksgiving pull into the first part of this week, after that there's not going to be a lot of melon available out of Nogales. It'll stay tight," says Vandervoet, adding that the markets should hold.
On the offshore deal coming in via container ports, there is also a close eye on the impact of the significant rain recently falling on Honduras and Guatemala and how that might affect the harvest.
For more information:
Scott Vandervoet
Vandervoet & Associates
Tel: +1 (520) 281-0454
[email protected]