Inside this Food Report


June 1, 2015

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Hello Everyone,

I hope all our friends in the United States enjoyed their Memorial Day Holiday in May.   I was reminded by my Mom that this holiday use to be called Decoration Day – a day when family and friends of those killed in war decorated the gravesite of those who died in the line of duty.   To many Memorial Day now means a long weekend and the unofficial start of summer but I cannot lose site of what it truly means, a day to honor the men and women who died for our country and I am extremely grateful for their sacrifice.

Green pea harvest is now underway in the Pacific Northwest and so far it looks like a great season ahead.   Unlike sweet corn, the pea prices are still a bit strong.   Some processors have already announced their 2015 new crop prices so please be on the lookout for Noon’s upcoming offers for this contract year!

While California is still suffering under drought conditions the southern plains, especially areas of Texas and Oklahoma, have experienced unprecedented rains, which have resulted in flooding and deaths.   Extreme heat in India and the recent earthquakes in Nepal in April have kept Mother Nature very busy for sure. 

Organic food is on the rise in the U.S and it seems you just cannot get enough of it.
Stores such as Whole Foods and Trader Joes are crowded with millennials who want to eat the healthiest and most natural food possible but cost wise it can be a challenge.   Please see our article below regarding Whole Foods and their plans for a lower cost spinoff chain.

Have a wonderful June and we look forward to seeing everyone during the crop season ahead.

All The Best,

Betty Johnson and the Noon International Team


United States: Green pea harvest in Oregon and Washington has begun. Warmer spring weather has brought on the season a few weeks earlier than usual. Favorable quality and yields are expected. Sweet corn planting is 75% completed. Harvest season for sweet corn is expected to commence middle July. To date weather conditions in the Northwest have been conducive to an excellent crop.Green bean plantings are currently underway. Colombia Basin processing potatoes have been ahead of schedule this season. The warmer temperatures back in April and favorable weather in May has resulted in an early start to the crop-commencing end June/Beginning July.

Berry fruit is coming along nicely all up and down the West Coast. The mild winter and warmer weather has resulted in a two-week to one-month earlier start to the berry crops depending on the region.

British Colombia blueberries are developing quickly with good size and it is reported that this region will experience a record blueberry crop this season. Washington State should begin their blueberry season about 2 weeks earlier than usual while Oregon is starting 3 weeks earlier than usual. California strawberries came on early as well due to a mild winter and volume has been higher than usual this season.

Cherry season in Washington State is expected to begin the end of this month with anticipated yields about 15% below last season. California is also predicting a below average crop of cherries which will drive the prices of cherries up.

Fresh apples are being dumped and left to rot and decompose in stretches of land in and around Eastern Washington. A combination of a record crop and not being able to ship during the West Coast Port slowdown resulted in apples not acceptable for the fresh market or processing any longer. The Washington State Tree Fruit Association has reported a loss of sales of $95 million.

Heavy torrential rains in Texas and Oklahoma have resulted in power outages and deaths. However the repeated rains in the Southern plain states are raising hopes in California that the emerging El Nino weather patterns will bring rain this winter to the state. The San Joaquin region, which produces 10% of the states agriculture, will need to cut their water usage by 10%.

Mexico: Peak season for organic Broccoli is now underway. Seems as though the rainy season in Mexico has begun early. The rain has helped bring on the broccoli crops ahead of schedule. The May temperatures were lower than usual with cool nights, which has resulted in good yields and quality. There have also been fewer incidences of pests due to the rains.

Guatemala: New crop broccoli season will begin the end of this month /first week of July.

Peru: Avocado harvest underway. Available volumes of frozen avocado will be down significantly, however there are still limited volumes of dice and pulp available.

Chile: Kiwi season in Chile is still underway and will be wrapping up this month. Fresh shipments of kiwi, lemons and table grapes are being impacted due to the custom workers strike that commenced on May 20th.

India: Severe heat and humidly in India, including the nations capital of New Delhi has caused over 700 deaths. Temperatures reached as high as 117 degrees Fahrenheit.

China: Edamame crop will commence middle June in Fujian Province and end June in Zhejiang Province. Shandong Province is still in the seeding period. Growth conditions in Zhejiang Province are good and acreage has increased this season. At this moment the edamame out of Fujian Province is anticipated to be lower quality based on brown spots caused by rain in May.

Yields of green beans in both Zhejiang and Fujian Provinces have declined approximately 20% due to cold and rainy weather in April. Compared to last season quality has also declined and price is estimated to be have increase by 5% to 8%.

Sugar snap pea acreage reduced by 30% this year.

Due to high labor costs snow pea yields declined 20% - 30% this season. Heavy rain during the seeding stage as well as lower quality has made it difficult to find good quality snow peas in the China market.

China’s main growing region for asparagus, Shandong Province, is experiencing a decline in yields by approximately 15% - 20% due to weak demand from overseas. Prices have increased by 10% based on an active domestic market.

China Warns of Fertilizer Overuse

China has a fertilizer problem. In a country already plagued by pollution concerns, growing use of fertilizers and pesticides have added considerably to the environmental crisis facing the country. Last month the agricultural minister Zhang Taolin announced that farm pollution is increased, even after efforts to cut fertilizer use across the country. Now China is faced with an even more critical need to reduce use and encourage farmers to use organic solutions.

As the world’s most populous country, Chinese farmers are faced with producing an astronomical amount of food. China grows the world’s largest crop of numerous fruits and vegetables, including watermelons and apples. In order to do so and to keep up with the rapid rise in food production the country has seen in recent years, farmers have turned to chemical fertilizers and pesticides to ensure large harvests. China consumes one – third of the fertilizer in the world.

It’s estimated that Chinese farmers use around 1,427 pounds of fertilizer per hectare of land, while the United States uses about 274 pounds for the same amount of space. In 2012, China used about 59 million tons of fertilizer, and for the past three decades use has increased by about 5.2 percent per year. Current pesticide use is at about 320,000 tons, and China wants to cut that number to 300,000 tons.

Runoff from those chemicals is now a serious threat to China’s water and soil. Pesticide residue is also being found on food, a serious threat to public health in a country that often faces food scandals. Along with plastic film, which is used to try and reduce pollution on livestock farms, Chinese agriculture’s reliance on chemicals is making sustainable alternatives difficult to achieve.

China’s target goals for cutting use of fertilizers and pesticides are modest; underlining the struggles the country faces to do so. Zhang hopes to see fertilizer use stop growing by 2020, meaning China will likely continue to see an increase even if things go as planned. But as farmers struggle to keep up with demand for domestic produce and the government’s dedication to environmental issues remains questioned, China’s ability to hit that target looks difficult.

Organics Rising

Once a novelty relegated to health food stores, organic food has become a staple of most grocery stores and markets over the past decade. It was a slow journey from niche market to mainstream powerhouse, but now that organics are widely available they have been charting some of the most stable and impressive growth in the agriculture industry. In 2014 record-breaking profits suggested that upward growth is only going to continue, with more and more consumers looking for healthier alternatives to conventional market offerings.

The idea for organic farming came about in the early part of the 20th century, when the US and UK saw a number of works published that advocated a holistic approach to health and food. Thinkers like Rudolf Steiner, Lady Eve Balfour, and Sir Albert Howard set the stage for the establishment of the first network of organic farmers, founded in the US in the 1940s. Texas became a hotbed of interest in organic produce, and eventually Natural Food Associates was founded in the state in order to connect farmers with markets and consumers.

When environmentalism took off in the 1960s and 1970s, organic farming became more and more popular. With the surge of interest, farmers began setting out standards to ensure quality in organic methods. Two decades later, the federal government set up their own standards as sales of organic produce topped $1 billion per year, with the 1990 passage of the Organic Foods Production Act, although it wasn’t until 2002 that the National Organic Standards were implemented.

According to the USDA, sales of organic food have only increased in the past ten years. In 2014, sales topped $39 billion, an 11.3 percent increase over 2013 sales. Organic fruit and vegetables continue to be the largest selling organic category. Up 12% from the previous year, 2014 recorded 13 billion in sales! This puts organic food near 5 percent of the total food market.

Those numbers are expected to increase, as a report released early last year estimated that organic product sales would go up through 2018. In the nine years between 2002 and 2011, production of organic food increased by 240 percent, and demand has kept pace. As of August 2014, a Gallup poll found that 45 percent of consumers specifically look for organic options, and the number jumped to 53 percent among 18 to 29 year olds.

Organic food may have started as an underdog in the market, but the numbers tell us that organic is here to stay. Now the question is can agriculture keep up with the demand?

Whole Foods Spinoff

Popular grocery store chain Whole Foods announced recently that they will be opening a line of more affordable, curated stores across the country. The announcement comes as competition and high prices have posed a challenge to Whole Foods’ formerly stellar growth rate. The currently unnamed chain will be aimed at consumers under 30, an age group that has consistently preferred organic and natural foods but often can’t afford the Whole Foods price tag.

Announcing the plan earlier last month, co-CEO Walter Robb said the stores, “will deliver a convenient, transparent, and values-oriented experience geared toward millennial shoppers, while appealing to anyone looking for high-quality fresh food at great prices. We believe the growth potential for this new and complementary brand to be as great as it is for our highly successful Whole Foods Market brand.”

Whole Foods has a reputation of being pricey, with the nickname “Whole Paycheck” hard to shed despite lowering produce prices. As stores like Trader Joe’s grow and organic produce is more widely available at supermarkets, the competition is getting stiff for the once-industry standout. Although earnings for the year have so far been strong, their 3.6 percent growth was below expectations and far below their former double-digit figures. Stocks have been falling as well, including a 12 percent drop in after-hours trading on May 3.

While there aren’t many details on the new chain at this point, Robb did share that the stores will be smaller, with a selection of products at a lower price. They will also have a simpler design than the their current stores. Whole Foods is already looking into signing leases on future locations and more information should be available in coming months as the company moves forward.

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