Market Update

Market Snapshot*

The U.S. Department of Agriculture was reporting the following prices on selected varieties of Chilean fruit:

Grapes (thompson seedless and flame varieties, through Los Angeles and Philadelphia): Cartons of 18-pound bags, extra-large, $24-26; large, $20-22; medium, $18-20; small, $16-18.

Peaches (through Los Angeles): Yellow, two-layer tray packs, sizes 40 and 44, $14-16; 48, 50 and 52, mostly $14.

Peaches (through Philadelphia): Yellow, two-layer tray packs, size 30, $14-16; 48, 50 and 52, mostly $14; 60, mostly $10.

Plums (through Los Angeles): Two-layer tray packs, black amber and sapphire, size 40, mostly $14; 48 and 50, $12-14; 60, $10-12.

Plums (through Philadelphia): Two-layer tray packs, black amber, sizes 40, 48, 50 and 54, mostly $14; 60s, mostly $12.

Nectarines (through Los Angeles): Two-layer tray pack, yellow-flesh, sizes 40 and 44, $14-16; 48, 50 and 52, mostly $14; 56 and 60, $12-14.

Nectarines (through Philadelphia): Two-layer tray packs, yellow-flesh, sizes 40, 48, 50 and 52, mostly $14; 56, $12-14; 60, $8-10.

* Prices from the USDA's Fruit & Vegetable Market News, March 3.

The Shipping Scene

Grower-shippers and U.S. importers of Chilean fruit are hopeful that shipping will return to normal soon, following the 8.8-magnitude earthquake that struck the southern part of Chile last weekend. How soon that actually will happen, no one knows.

About 78% of the damage occurred in four regions and affected mostly table grapes, apples, pears and blueberries, according to a news release from the Chilean Fresh Fruit Association. But the release said exporters believe there should be a return to "relative normality" by early next week.

As of Wednesday, the country's main port of Valparaiso was at 90% capacity, the northern fruit port of Coquimbo was operating normally, and Chile's second-largest port, San Antonio, was operating at 60% capacity but was about to increase its operations as soon as power was restored, the release said.

U.S. arrivals should remain normal for the next week, Robert C. Blackburn, senior deputy executive director of the Philadelphia Regional Port Authority, told the Philadelphia Inquirer.

"After that, there's going to be perhaps some interruption, the degree of which we're not sure yet," Blackburn said.

Some Chilean grower-shippers have to deal with damaged packing facilities, lack of electricity and water, damage to roads to the ports and disruptions at the ports themselves, said David Schiro, president of Jac. Vandenberg Inc., Yonkers, N.Y.

"Can they get up enough capacity to get the fruit out and how fast can they do that?" is the key question, said John Pandol, director of special projects for Pandol Bros. Inc., Delano, Calif.

The good news is, there should be no change in the quality of the fruit that arrives from Chile, said Peter Kopke Jr., president of William H. Kopke Jr. Inc., Lake Success. N.Y.

"It's just a significant interruption in the supply," he said.

Table grapes probably will be the fruit least affected by the quake, said Tom Tjerandsen, managing director, North America for the Chilean Fresh Fruit Association.

Apples were adversely affected because they are in the more southern region, closer to where the epicenter was, Schiro said.

"When they shook, some 10% to 20% of the apples just fell to the ground," Pandol said.

But Schiro said the quality should be fine on the apples that remained on the trees. Royal gala, granny smith, fuji and braeburn varieties are among the most popular Chilean apples.

Despite the earthquake and potentially tighter supplies of some commodities, Schiro did not expect to see skyrocketing prices on Chilean fruit.

"Prices will go up somewhat, but it's not going to be huge increases," he said.

Chilean prices could be "artificially strong" because, with weather problems affecting some fruit out of Florida, California and Mexico, "there aren't other things around," Pandol said.

"We're in unchartered territory for the rest of the season, no question about it," he said.

The table grape crop already had a rocky start as a result of an early-season freeze and continued cold weather. About 4 million boxes were lost, Tjerandsen said. Under the terms of a federal marketing order, most Chilean grapes must arrive in the U.S. by April 10.

Blueberry volume rose 48% last year and was expected to increase 30% this year, but the freeze likely will hold volume down to year's level, Tjerandsen said.

Early stone fruit varieties, cherries and apricots also suffered some freeze damage.

Stone fruit - peaches, plums and nectarines - is winding down, but pears are just getting under way and should be available until late September.

Quince should start this week and ship until July, and kiwifruit should be ready in mid-March and ship through summer.

Aside from the early freeze, the fruit has enjoyed "spectacular growing conditions, and the fruit quality is reflecting that optimal weather," he said.

Tjerandsen estimated that Chilean imports to the U.S. would reach 115 million boxes this year, down from a pre-freeze estimate of 120 million boxes. The latest estimate did not include potential losses from the earthquake.

The Chilean Fresh Fruit Association has point-of-purchase materials available to help retailers move the fruit, Tjerandsen said, and has promotional updates and other information available on its Web site - www.chileanfreshfruit.com.

Thirty-second TV spots with 5-second tags from local retailers have been funded by the Chilean Exporters Association and the Export Promotion Bureau (ProChile) and fielded by the Chilean Fresh Fruit Association. They were scheduled to run in the U.S. and Canada through April.

(By Tom Burfield, Western correspondent for The Packer. The Packer and Red Book Credit Services are part of food360º, a division of Vance Publishing Corp., Lincolnshire, Ill.)

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March 5, 2010