Reefer Freight Rates Spike 20%
Posted on August 3rd, 2020
Over the past four weeks, we’ve seen a major reduction in trucking capacity and a 20% spike in overall transportation rates. At first thought, one might suspect that the challenges were COVID related, but that’s only partially true. The problems facing the industry started last year in what Business Insider termed, “2019 Rocked By A Bloodbath,” after 2 large trucking companies filed for bankruptcy, leaving thousands of drivers out of work. At the start of 2020, there was already a shortage of equipment and drivers, but that deficiency wasn’t fully felt during the sluggish winter months. By March of this year, much of the nation was locked-down due to the ongoing health crisis, which again masked the mounting issues in the trucking industry. As the country continues to open in phases and a normal flow of business resumes, the demand for refrigerated trailers has increased exponentially. Unfortunately, in the current climate of financial uncertainty, we’re continuing to see more asset based carriers file for bankruptcy. It’s unclear how the nation’s $800 billion transportation industry will fare through the remainder of the COVID-19 crisis, but it’s certain that agriculture and all other sectors that rely on transportation will continue to be affected.
Direct Source Expands Its Farming Portfolio
Posted on August 26th, 2019
Agro Direct, a subsidiary of Direct Source Marketing is excited to have been recently licensed to produce Autumn Crisp Green Seedless, a highly regarded product from Sunworld Innovation. Autumn Crisp are in great demand globally and is known for its large size, snappy crunch and high sugar content. Agro Direct expects to have its first production by February of 2021. They will also be looking forward to their second crop of Sunworld Superior Green Seedless as well as Red Globes for the Asia market. Agro Direct first started farming sweet onions in Villacari Peru, and still produces some of the finest quality Century variety sweet onions in the country.
Optimistic Outlook for March & April Strawberry Supplies
Posted on February 24th, 2019
California strawberry shipments were effectively sidelined the entire month of February as persistent rain events hampered overall production in Oxnard. The additional precipitation and cool weather have delayed harvest schedules but helped overall plant health and fields are now primed and staged for consistent production as we head into the month of March. Once shipments from Mexico and Florida wrap up and California fields come fully online, retailers will jump right in as there is always a clear preference for California fruit. Although there is good volume expected, overall strawberry acreage in Oxnard is lower in comparison to previous years. Growers and shippers in the region may not be able to support the entire industry early in the transition, and we could see FOB’s spike in the short-term until supply and demand equalize. Santa Maria fields aren’t expected to come online for another 3-4 weeks, leaving growers and shippers in Oxnard the sole task of supplying the industry through the month March. Once Santa Maria and Oxnard are both in full production, there should be excellent volume to support promotional activity through the month of April.
Packing First Peruvian Superiors of the Year
Posted on January 7th, 2019
Agro Direct, a division of Direct Source Marketing, is excited to be packing its first seedless grapes of the year from our vineyards in Ica, Peru. Overall quality and size on these Superior Green Seedless are excellent for a vineyard that is only 14 months old. Agro Direct will be shipping volumes to both the US and Korean markets this year and will then look to harvest significant volumes of Red Globes. This is an exciting project as Direct Source Marketing is positioning themselves with a vertically integrated program to expand business opportunities in the US market.
Growers in Chile Still Assessing Damage from Last Week’s Hail Storm
Posted on November 19th, 2018
Last week Chile was hit with one of the most severe and wide-spread hail storms in recent history. The storm affected an area of the sixth region from Rancagua (60 miles south of Santiago) to Parral, which is 270 miles south of Santiago. Hail stones the size of marbles fell with extreme impact, severely damaging a myriad of agricultural commodities including stone fruit, grapes, berries and many others. While it is still too early to understand the full impact of the storm, information on specific commodities has started to emerge.
Beginning reports are speculating between 20%-30% of overall cherry production could have been affected and could rise over 30% as more information becomes available. Asian exports are expected to drop significantly as only the best quality fruit is selected with little to no psychical blemishes. Grapes and stone fruit look to be in better shape, although preliminary reports are only now starting to funnel in. The extent of overall damage is high dependent on the farming location as some areas received greater hail coverage than others. The industry will have to wait until a survey can be completed to ascertain the full impact of last week’s storm on the upcoming import season.
California’s Labor Shortage & Rising Production Costs
Posted on July 26th, 2018
The opening of the California table grape and stone fruit season is already posing challenges as growers contend with extreme temperatures, rising production costs and labor shortages. With a heatwave topping 109 degrees, labor crews are being forced to cut their workday short and exit the fields by noon. Growers throughout the agricultural sector are competing for labor crews as the pool of able bodied workers continues to decline. According to one grower we spoke with the median age of their work force is between 45-60 years old and the younger generation of immigrant workers has shown little desire to enter into field work.
Similarly, Governor Jerry Brown signed legislation raising California’s mandatory minimum wage to $15 an hour by 2022. California saw its first increase in January 2017 to $10.50 an hour and again in January 2018 to $11 an hour. Raising the minimum wage for California farm workers will have sweeping consequences and growers will likely look towards mechanization to keep costs down. Nearly 60% of the nation’s produce is grown in California and increased production costs could shift hundreds of thousands of acres of current and future California farmland to other states and countries.
FSMA Compliance Dates Creeping-Up on Growers and Importers
Posted on December 18th, 2017
New FSMA guidelines establish mandatory, minimum standards for the safe growing, harvesting, packing, and holding of fruits and vegetables grown for human consumption. These standards are designed to work effectively for food safety across the wide diversity of produce farms. Growers, shippers and importers will be held to standards designed to reduce the presence of dangerous bacteria in the food supply, with the goal of reducing the number of illnesses caused by contaminated produce.
FSMA is a very complicated statute, one that has been subject to numerous articles, treatises, analysis and multiple revisions by the FDA. Wading through and organizing the all of the data can be confusing and overwhelming, but with the compliance date edging closer, it must be a top priority for everyone in the produce industry. There seems to be an industry disconnect between Global GAP certifications and the new produce safety rules established by FSMA. Currently, there are no water quality standards required to achieve Global Gap certification. This will be the main focus for growers and importers as the new Food Safety Modernization Act will have a zero tolerance for water contaminants.
Grower Spotlight: Bari Produce
Posted on April 10th, 2017
Partnering with the best table grape and stone fruit growers gives Direct Source Marketing the competitive edge in providing our customers the best quality fruit and service in the industry. Bari Produce based out of Madera, California was founded by Frank Logoluso and was created to supply the highest quality fruit to the US market. The Bari label was created over 60 years ago and is reserved only for the most premium fruit in terms of size, quality and taste. We talked with Justin Bedwell, president of Bari Produce, about the upcoming 2017 apricot season to get a sense of the crop and what we can expect this spring.
La Nina weather conditions brought significant rain to California this winter, which affects many aspects of tree growth and production. The crop looks to be about 7 days behind last season, but last year was significantly early in comparison to previous years. He explained that this year apricot volumes will be light because temperatures didn’t dip low enough to induce proper dormancy cycles in the trees. On the upside lighter fruit produces much bigger sizing and Bari Produce is expecting excellent quality on larger fruit. Less supply will mean higher FOB’s and labor costs are expected to rise as well with California’s minimum wage increase. Every aspect of production including box cost, transportation and packing has increased and the industry should anticipate prices to reflect these new cost additions. The 2017 California apricot season will begin the last week of April and expectations are for excellent quality right out of the gate. Call Direct Source Marketing for promotional pricing on exceptional fruit from trusted growing partners like Bari Produce.
Peruvian Floods Threaten Agricultural Infrastructure
Posted on March 20th, 2017
Seventy five people have been killed and over 100,000 left homeless after a series of torrential downpours caused havoc along Peru’s Pacific coast. The intense rains are the most severe in the last two decades and more showers are forecasted in the near future. The rainy season has delivered 10 times more rainfall than usual and a state of emergency has been declared in half the country with armed forces deployed to help police maintain public order. Agriculture is one of Peru’s largest exports and the flooding and mudslides are disrupting transportation and the industry as a whole.
The northern grape growing region of Piura has been hit harder than most with reports of roads being washed away completely. Many vineyards are currently under water but the long term damage won’t be fully known until the waters recede. Michael Horney of Peru Agro Trade said, “We will have to wait until after the rains have passed to asses the full damage to the transportation and agricultural infrastructure. It’s too early to speculate but we know that roads and highways throughout the country will need to be repaired and some even rebuilt.” We can only hope that no more lives are lost and that the extreme weather will soon come to an end.
Hurry Up and Wait
Posted on March 6th, 2017
California is the nation’s largest producer of strawberries with over 2.5 billion pounds harvested every year. Oxnard and Santa Maria are unique coastal environments with moderate winter temperatures perfect for strawberry cultivation. Warm and mild days combined with overcast cool nights are an ideal combination for growing strawberries. The region typically experiences only light precipitation during the month of February, which is ideal since rain is one of the largest determining factors in delaying crop maturation. This year’s La Niña weather conditions have increased precipitation in both regions and throughout the state. According to Wunderground Weather, Oxnard received only 8.13 millimeters of precipitation in February 2016 compared to 183.64 millimeters in February of 2017. Such a drastic increase in rainfall has severely hindered fruit maturation and it could be another 2 weeks before the crop fully comes online. The weather for this week looks to be very good with clear skies forecasted through the weekend. Growers and retailers are both patiently waiting in anticipation for this year’s crop to finally start to produce.