Inside this Food Report



VOLUME 6
ISSUE 9


September 1, 2015

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Hello Everyone,

Wow, September has arrived! So many things happening…..our crop season is in full swing here in the United States. Corn season is moving along pretty well with reports of increased yields and good quality. On the other hand, potatoes are a bit of a concern, as they do not like heat and believe me heat we have certainly had in the Pacific Northwest this summer! In fact I just heard on the radio this morning that this summer has been the warmest ever on record in Washington State! Most likely we will see some quality concerns on potatoes later in the crop. Europe is bracing for a tough season with reduced yields and higher prices on all of their vegetable crops due to drought and scorching heat over all of Europe’s main growing regions. Possibly with Europe’s higher prices this season it might allow some recovery on our North American potato exports to Japan. (Please see our crop section below).

Speaking of heat in the Northwest it has been a gut wrenching summer watching the wild fires burn up some of the most beautiful areas of Washington and Oregon State. Actually the entire West Coast has suffered wild fires due to the dry and hot weather. However in Washington State the fires are out of control and now reported to be the worst in Washington state history. I remember mentioning the same in our August 2014 newsletter, however sad to say we have now surpassed that milestone of last August. Rain has finally arrived in the Pacific Northwest this very week so we are holding out hope for fire relief.

October will be upon us soon and Noon’s Steve Dole and Chad Watson will be attending Anuga in Cologne Germany, which is being held October 10th through October 14th. Others of us will be in Central America, Eastern Washington and the Midwest making sure that our client’s contracts are getting the attention they deserve. That means top quality, safe product, and timely deliveries!

Once again thank you to all of our vegetable and fruit suppliers who work so diligently each and every year to supply Noon International with the best tasting and safest product available!

All the best,
Betty and the Noon International Team



CropVeggies

United States: Green pea market very short. Peas finished early this season and processors suffered a 15 – 20% decrease in yields. Most suppliers are off market on high-grade peas. We are almost through 60% of the sweet corn harvest in the Pacific Northwest. To date there are some reports of lower yields on certain varieties due to kernel size but for the most part the overall corn harvest is expected to produce increased yields by as much as 10% due to the warm weather and a steady supply of water.

Oregon and Washington potato harvest moving along, however there is still concern on quality due to the unusual heat this season. Exports from North America to Japan, the largest export market for French Frys, is still reported as declining due to price competition from Europe. The second largest importer of French fries, Brazil, is increasing its imports of potatoes. North America’s exports to Japan has dropped by about 20 percent over the last year.

Eastern Washington blueberry season is over with Western Washington winding down. The crop forecast is expected to be larger than in 2014 but less than originally expected due to warmer temperatures and lack of rainfall. Quality is reported as good, however fruit size is a bit smaller than usual. Washington raspberry yields down about 30% due to the very warm and dry weather.

Due to a mild winter and warm spring Washington’s apple harvest is expected to begin early this year with an abundant crop anticipated.

Midwest: Sweet Corn harvest now underway. To date the season has been a bit start and stop as rain in August hindered harvest as well as cooler temperatures slowed down the rate of growth. The season seems to be back on tract now and should run through the end of September. Sweet Corn yields and quality are reported as very good.

Mexico: The rainy season in Mexico has been more severe than usual and processors there are struggling to supply broccoli and cauliflower. Currently cauliflower is being grown in the Hidalgo area and this area has been hard hit by heavy rain and hailstorms. All processors have lost cauliflower acreage and there is a general shortage of cauliflower. With the shortages of cauliflower anticipated in Europe due to heat and drought we may experience a global shortage of this vegetable.

Broccoli, which is currently being grown in the hilly Puebla area, has not been as hard hit by the rains and there is ample supply available. However both broccoli and cauliflower will not be in steady supply until the rainy season ends and peak production in Mexico gets underway. We expect this to be in October/November.

Guatemala: While Guatemala has had more rain than last season which benefited the broccoli at the beginning of the season ( June/July ), the rain has lessen and broccoli yields are being affected which are resulting in some delayed shipments.

Costa Rica: Pineapple still short with prices high.

Chile: Asparagus harvest will begin in late September with pricing being announced early/mid September.

Peru: Asparagus harvest will commence September and volume and prices expected to be high. Warmer weather caused by El Nino will affect Peru’s asparagus.

Europe: Europe’s vegetables will be in short supply this season. It has been reported by PROFEL (European Association of Fruits and Vegetable Processing Industries) on August 17th that supply levels for the 2015 pack have worsened significantly. Drought, heat, and high winds will result in reduced yields in the north, west and east of Europe. Major problems are reported for peas and carrots with lower yields and higher prices anticipated for sweet corn, French fries, cauliflower and broccoli.

China:

Fujian Province: Cooler temperatures and plenty of rainfall has affected the edamame harvest with many blemishes and yellow pods. Prices have increased due to lower yields.

Zhejiang: Processors have completed the edamame harvest. Quality is average and prices are stable. Broccoli and Cauliflower plantings now underway and acreage has increased slightly.

Shandong Province: Rain in August alleviated the drought conditions somewhat, however many crops still suffered from lack of water. Harvest for edamame is underway and to date quality and yields are good. Asparagus harvest is complete and yields declined by 30% due to the drought conditions. Green pepper harvest also suffered reduced yields by 40% due to the drought conditions in Shandong Province.


Australia Announces New Labeling Laws

In late July, the Australian government announced a new food labeling system aimed at giving consumers a clearer picture of where their food comes from. The decision to reform the country’s labeling regulations came after an outbreak of Hepatitis A was linked to imported berries produced by Patties Foods. The new labels will begin appearing on shelves later this year and will give consumers the ability to see immediately what percentage of their food is domestically produced.

The green and yellow labels will feature a kangaroo and triangle, along with a bar chart indicating the percentage of ingredients that come from Australia. The label will now allow consumers to know whether the food is grown, made, or packaged in Australia and the percentage of ingredients that are grown domestically. The design was voted on by the public, with more than 17,800 respondents taking part. The labels “will include, for example, “Made in Australia from 100% Australian ingredients”, or “Made in Australia from more than 75% Australian ingredients. Regulations will also clarify what “made in Australia” means, to avoid mislabeling. It is said that the new labeling procedures will cost Australia businesses approximately $37 million per year.

Beginning this year, a voluntary opt-in to the labeling will allow manufacturers to implement the policy ahead of a mandatory roll-out early next year. The changes have already been backed by a number of high profile organizations, including Central Markets, Australian Made, and Aussie Farmers Direct. Although the roll-out process, which will include a transitional period ahead of mid-year full compliance expectations, could hit some hiccups, for now it looks like Australia has found a solution to country of origin concerns.


Organicís Growing Pains

Organic food has been on the rise for some time, however in recent years growing demand from grocery stores and restaurants has surpassed the supply farmers are able to produce. As a result, many looking to cash in on organic ingredients are working to woo suppliers and growers with generous contracts and compensation.

With more and more pressure on restaurants and supermarkets to provide organic offerings, farmers are struggling to keep up with the demand. “Organic is much more main stream now. More people are seeking it out,” said Iowa farmer Andrew Dunham. He told USA Today. “We actually do end up saying ‘no’ quite a bit. We’re pretty much selling everything we grow now.”

Although organic sales are still a relatively low percentage of overall food sales, accounting for about $36 billion of the annual $630 billion in supermarket sales last year, that number continues climbing. The Organic Trade Association estimates an increase of about 12 to 15 percent every year for the next three years, assuming demand isn’t dampened by shortages.

“There is not a major retailer in the country that doesn’t have appealing to the organic shopper in their strategy right now,” Laura Batcha, executive director of the Organic Trade Association, told USA Today. “But what happens if the industry can’t fulfill that opportunity and people walk away?”

Many retailers, both grocery and restaurants, are working with farmers to encourage them to switch to organic practices. This could mean paying them extra during the 3-year period that it takes to transition from conventional to organic practices or paying certification fees, which can cost up to $4,000.00 per certification. Companies such as Elevation Burger a restaurant chain that specializes in organic, grass fed, free range burgers, will work with supplies sharing their sales growth as well as their future projections of store openings to enable their suppliers to plan ahead for organic growth.

Sustainability is now the question, both in terms of supply and demand from the pubic. It’s a carefully maintained house of cards that could tumble at any moment, if demand were to fall or shortages drive the costs too high. But for now, retailers are willing to do whatever it takes to meet their organic growth strategies.



Africaís Endangered Banana Industry

The global banana industry is bracing for what could be one of the worst crises to hit the trade in half a century. A fungus similar to one that wiped out the world’s most commonly produced banana fifty years ago is sweeping across Africa’s banana plantations, threatening millions of dollars in damage and the possible extinction of the world’s leading commercial banana.

The Cavendish cultivar is the banana sold in most supermarkets around the world, with each plant effectively being identical to the others. Growers adopted it in 1965, when the Gros Michel was wiped out by the Panama disease. A fungus that started in Central America but rapidly spread around the world, Panama disease rendered the Gros Michel extinct and lead to most of the world’s banana plantations to be burned down to combat the disease.

Most recently, the Cavendish is under much of the same threat. The fungal disease called Tropical Race 4 attacks the vascular system, keeping plants from taking in water. Caused by a fungus called Fusarium, the disease is highly contagious and can be spread rapidly through contaminated dirt. All it takes is a small bit of dirt carrying the disease to take it around the world, and that’s exactly what has happened.

Tropical Race 4 originally appeared in Malaysia in 1990, but today it is posing a very real threat to the numerous plantations in Africa. It first appeared on the continent in 2013, after having spread through Asia and Australia. According to George Mahuku of the International Institute of Tropical Agriculture, the disease threatens the livelihoods of 100 million people in Africa.

In an interview with CNN, Mahuku gave one example that highlights the very serious threat posed to Africa by this disease. In parts of Africa, over half of the agricultural land is used for bananas, and the trade accounts for over $4 billion per year. In the case of two plantations, the cost has been devastating. "The disease has already cost Matanuska, the company that owns the plantations, about $7.5 million. A total of 230,000 plants have been affected and destroyed. At the current rate of infection, the farm is losing 15,000 plants per week, translating to $236,000 per week," Mahuku told CNN. It also threatens the $1.5 million that Matanuska pumps into the local economy.

With no effective way to recover crops impacted by the disease, a way forward for the industry is far from clear. The disease remains in the soil even after the crops have been burnt, making it impossible to resume banana cultivation in areas struck by the disease. At this time, efforts to contain the disease are underway, with a one-year emergency plan being implemented. At the same time, many are suggesting that it’s time to reconsider the monoculture that has dominated the banana industry, and introduce varieties, including GMO that could better hold up in the face of disease.




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