No, seriously, I’m a Lime

BY Mark Campbell, CFA

Week #34, ending August 23rd

ProduceIQ Index:  $1.21/pound, up +1.7 percent over prior week

Despite a relatively slow hurricane season, tropical systems continue to wreak havoc. A Category 1 Hurricane-soaked Hawaii over the weekend, and the Southeastern U.S. is still coping with the aftermath of Tropical Storm Debbie. Also, this week, the criminal world has found a headline-generating intersection with agriculture, as drug traffickers disguised methamphetamine as watermelon to smuggle it across the border.

Over twenty inches of rain inundated parts of the Big Island. And on the East Coast, weeks after Tropical Storm Debby, growers in the Southeast are still bracing for the impact on fall crops. Bell pepper and squash grown in North Florida and Georgia are scheduled to start in the next couple of weeks and will likely be slow to start due to heavy rain from Debby.

Drug dealers added a whole new dimension to the term ‘sweet stuff’ when they attempted to disguise $5 million worth of meth as watermelon in a truckload seized at the US-Mexican border. Over 4,600 pounds of meth were sadly wrapped up in green paper balls. Unfortunately, these tactics are not new.

Watermelon prices have been so below average the last few weeks that suppliers might wish they could take a page out of the cartel’s playbook and disguise their fruit as something demanding more value, like limes.

Lime prices falter slightly week over week. However, short-term forecasts for markets still lean towards tight supply and high prices. Short shelf life, yellowing, and other quality issues keep supply slim and prices high. Keeping in line with seasonal trends, elevated markets are forecasted through mid-September.

Round tomato supplies are making a comeback. Tomato prices are down -19 percent over the previous week and may fall further thanks to a surge in supply from new growing regions in Mexico, California, and Tennessee.

Green onion buyers are having a rough week. Maybe not as rough as the Boeing astronauts who learned they’d be stranded in space until 2025, but pretty close.

Week #34 green onion prices are at a ten-year high. Predictably, USDA volume is at a ten-year low by a significant margin (excluding outlier year 2020). Prolonged heat in Mexico is crushing yields and has exposed supply to volatility. Expect high prices over the next four weeks as inclement weather compounds the effects of seasonal volatility.

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Bio

Mark Campbell is an industry veteran with over 20 years of produce experience. After earning his MBA from Columbia Business School, he spent seven years as CFO for J&J Family of Farms. He later served as CFO advisor to several produce growers, shippers, and distributors. In this role, Mark saw the impediments that prevent produce growers and buyers from trading with greater access and efficiency. This led him to cofound ProduceIQ.

ProduceIQ Index

The ProduceIQ Index is the fresh produce industry's only shipping point price index. It represents the industry-wide price per pound at the location of packing for domestic produce and at the port of U.S. entry for imported produce.

ProduceIQ uses 40 top commodities to represent the industry. The Index weights each commodity dynamically, by season, as a function of the weekly 5-year rolling average Sales. Sales are calculated using the USDA's Agricultural Marketing Service for movement and price data. The Index serves as a fair benchmark for industry price performance.