June 23, 2016 OVERVIEW MARKET ALERTS GOOD BUYS

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1 June 23, 2016 OVERVIEW Avocados are in short supply and we are seeing extremely high prices. We may need to sub sizes. Garlic is also in short supply with very high prices, as well as Greens beans, Romaine hearts and red and green peppers. Jumbo carrots and plugs from CA are finally in good supply and good quality. Due to the heat, we are seeing tip burn, insects and sun scalding in romaine, green leaf, iceberg, and tender leaf products. Tomatoes are plentiful and great quality as well as berries. MARKET ALERTS AVOCADOS (EXTREME) GREEN BEANS (EXTREME) PEPPERS (GREEN & RED) GARLIC (EXTREME) LEMONS ROMAINE HEARTS GOOD BUYS STRAWBERRIES - Strawberry Buttermilk sorbet! 2 cups strawberries, 1/3 cup agave, 1 ½ cups buttermilk, 3 tablespoons Chambord, 1 tablespoon lemon juice. Combine in blender until smooth and freeze. MANGOES - Mango orange slush! One large mango, peeled and cut, 10 ice cubes, 1 cup orange juice, 2 tablespoons lime juice, 1 tablespoon ginger juice, agave nectar, 1 cup sparkling water. Blend and enjoy! 1

2 TRANSPORTATION & WEATHER Trucks are in steady supply for California, Arizona and the Northwest. Seasonal demand for melons, tree fruit and grapes will continue to support higher freight rates, along with increasing demand for July 4 th holiday shipments. A warming trend is once again in the weekend forecast for California and Arizona, following extreme temperatures that occurred earlier in the week in the Desert Southwest districts, with highs reaching 122 in the Coachella Valley of California on Monday. By this coming Monday, 113 is the high predicted for Coachella as temperatures rise once again. Coastal districts in Central California will see highs reaching 80 early next week, with 108 by Wednesday in the San Joaquin Valley. The high elevation region in Central Mexico (Uruapan, Michoacan), where avocados are grown, will see continued seasonal daily thunderstorm activity, with highs in the mid 70 s. Current warm conditions in the Mid- Atlantic States will reverse toward a weekend cooling trend, with thunderstorm activity in the midweek forecast. FRUITS & VEGETABLES AVOCADOS EXTREME MARKET* We are back in a demand exceeds supply situation due to the ongoing shortages of avocados crossing through Mexico and lighter volume out of California. Our contract grower, as well as the entire avocado industry for that matter, is seeing the market continue to see variances in production and size. We will need to sub sizes where needed if necessary; and we are in an escalated market. Expect very high prices. Mexico Production out of MX has been cut in half over the past week. Original projections for the next several weeks was in the million pound range. Earlier this week projections were adjusted down to 16 million pounds. Now we are looking at best 8-10 million pounds this week. Old crop fruit is drying up fast! Reason for all of this is over the past 6 months excessive amounts of fruit was being harvested which has now created very limited supplies at the end of this season compared to previous seasons. We are not expecting to see any relief until the US starts seeing new crop in mid-july at the earliest. Keep in mind it will take at least 2 weeks to fill up the pipeline once the volume starts flowing in addition to additional ripening time for this lower maturity fruit. 2

3 Projections for the Flora Loca (new crop) crop are expected to continue with the overall trend of small fruit. California Peru California is peaking in production right now at about 19 million pounds per week. We will see these # s for the rest of July with a decline starting in July. The size curve is peaking on 60 s followed by 48 s. Extra-large fruit remains very tight. Peruvian production is ramping up. Arrivals were 4.3 million pounds up from 3.3 million pounds in previous weeks. We expect to see 5-6 million pounds in the next few weeks before peaking at 7-8 million pounds in July. Projections to the U.S. have been revised down from the original projections. Most of the volume coming to the U.S. is program business with very little spot market volume. Size curve is peaking on 48 s followed by 40 s. Small fruit is very limited. In order to maintain our current contracts, we need to increase our prices above the contract lid for orders loading on Monday June 20, 2016 on the highlighted sizes. We will most likely need to evaluate weekly through the end of July, possibly Mid-August. Please see below on the avocado market. We are experiencing a short supply. Although we saw improvement, the market is now escalated. We may need to sub 32ct, 60ct or 70 s in place of 48ct. The prices are no longer in escalation. BANANAS Unseasonal strong demand has developed for banana growers in Central America, as supply has been disrupted from the Philippines. BLUEBERRIES West coast berries are at their peak; Florida and Georgia have finished for the season. Steady production coming from North Carolina. Quality is good. BLACKBERRIES Steady supplies, good quality with great flavor profile. The season in Central Mexico is winding down. Production volume in Baja California is increasing, with steady volume from Watsonville-Salinas. RASPBERRIES Steady volume. Quality has been consistent. Oxnard remains the primary district, with Santa Maria and Watsonville-Salinas volume trending higher. STRAWBERRIES Recent cool, humid marine layer conditions have slowed production and have resulted in a smaller berry-size profile in the short term. Production will increase during June, leading to record volume during the month of July. A sharp decline in supply is anticipated to begin in early August. 3

4 CALIFORNIA-ARIZONA CITRUS GRAPEFRUIT Finished in Texas. We are in California now. Small fruit out of California is extremely tight as it is peaking on a 23ct, which is big fruit. Quality is good. LEMONS We are peaking on the smaller size and very limited on larger sizes. The market is very active. We are seeing shortages on ALL sizes, quality is good. LIMES (PERSIAN) Prices are improving weekly. Quality is good. Small limes are becoming more and more available. 110/150 availability remains extremely tight. Some relief on these sizes should be seen in 2 weeks. Color and quality is very good at this time. 4th of July will be a good time to promote. ORANGES We are seeing this market firm up on smaller sizes. Vals are starting up with most growers. PINEAPPLE Demand is strong; we are seeing good supply of large fruit. Quality is good. CALIFORNIA LETTUCE GREEN & RED LEAF Supplies on green leaf are normal. We are seeing occasional fringe burn. Demand is normal for red leaf, quality is good. Some reports of insects. ICEBERG LETTUCE Supplies are below good. Quality is good. Prices are have dropped. Some reports of insect damage. ROMAINE Supplies are steady and demand is good. We are seeing some quality issues, which include light internal tip burn, some fringe burn and occasional mildew, however we do expect this to get better this week. Some reports of insects. ROMAINE HEARTS ESCALATED MARKET - Supplies are slightly below average. Quality is average, we are seeing some tip/fringe burn, and some insects due to the heat. Prices are in escalation. EASTERN & WESTERN VEGETABLES GREEN & RED BELL PEPPERS Availability has tightened in the East and West on green bell peppers. Late season production in Georgia has declined; quality issues have caused a reduction in yield. We are waiting for new crop harvest in North Carolina to get up to speed, followed by New Jersey and Michigan. The Southern San Joaquin Valley (Bakersfield) is the only source in the West; new crop green bells are not yet available in the Central San Joaquin Valley. Red bell peppers are in tight supply as the harvest in Coachella winds down. 4

5 CUCUMBERS Generally steady availability, although the market continues to be characterized by moderate price fluctuation, depending on growing region. North Carolina is now the primary source in the East, with the harvest in New Jersey and Michigan to begin next week. Availability is steady from Baja California; production will increase by mid-july. ENGLISH CUCUMBERS Steady availability; Canada is the primary supplier. New crop from California is now available. GREEN BEANS EXTREME MARKET. The Georgia harvest is winding down quickly, creating a significant gap in supply; prices have moved sharply to the upside. Wet weather in North Carolina and Virginia and cool weather in Tennessee have contributed to this shortage. Growers in Virginia and Tennessee will have consistent supply by early July; until then the shortage will continue and prices will remain at the extreme. Availability in the West is steady and prices remain firm; currently shipping from Salinas-Watsonville, Fresno and Southern California. ZUCCHINI & YELLOW SQUASH The recent heat wave in the West has caused some issues with quality and yield in Central California coastal districts on zucchini and yellow straight neck; growers are shipping to close-in destinations only. Availability is tight in Georgia and North Carolina; supplies are expected to increase when new crop harvest volumes normalize from growers in Virginia, New Jersey and Michigan. ACORN, BUTTERNUT & SPAGHETTI SQUASH Steady availability from Northern Mainland Mexico on acorn; spaghetti and butternut are in tight supply. MANGOES Supply is abundant and prices are low. Quality is good. MELONS Cantaloupe: Extreme temperatures have saddled the growing regions since late last week which has curtailed daily harvesting to only 5-6 hours daily to protect the field crews from the elements. This has affected the overall supply with lower numbers being harvested and heat pumping the sizing up causing a shortage on 12/15s. Arizona production will continue until after the 4 th of July. The Westside region of California will start production next week and will pick up momentum quickly with good supplies anticipated by July 7 th. Early signs are showing a good mix of sizing on cantaloupe. Honeydew production crossing through Nogales is almost finished which should push the domestic market up slightly. As with the cantaloupes, current production is leaning heavier to the larger fruit (5s) out of Arizona. Westside fruit should see primarily 6s when they get going. HERBS The only fresh herb that continues to have any issues is SAVORY and it will continue to show signs of tip burn. CHERVIL was not affected by the heat as the growing region was nice and cool; so we are expecting supplies to pick up by next week. Please remember to open up your shipping containers as soon as you receive them to let out any 5

6 warm air. We are adding more ice and using a thicker liner where needed. The best way to insure your quality is to open that box and let the fresh herbs breathe. HERB SUPPLIES QUALITY COUNTRY OF ORIGIN Arugula Good Good USA Basil Good Average USA/MEXICO Opal Basil Good Good USA/MEXICO Thai Basil Good Good USA/MEXICO Bay Leaves Good Good COLUMBIA Chervil Limited Fair USA Chives Good Good USA/MEXICO Cilantro Good Good USA Dill Good Good USA/MEXICO Episode Good Good MEXICO Lemongrass Good Good USA Marjoram Steady Good USA Mint Good Good USA Oregano Good Good USA Italian Parsley Good Good USA Rosemary Limited Good USA Sage Good Good USA/MEXICO Savory Fair Fair USA Sorrel Steady Good USA Tarragon Limited Fair MEXICO Thyme Good Good USA Lemon Thyme Good Good USA Lavender Good Good USA Lime Leaves Good Good USA Hora Santa Good Good USA 6

7 ARTICHOKES We are currently moving from Heirlooms to globes which is early for the season. The Globes are not ready yet creating a gap with very high prices and very low supplies. ARUGULA Supplies of both baby and wild arugula are light. Quality is fair with minor mildew and big sizes. ASPARAGUS Supply is good on smaller sizes, larger sizes are tight. Quality is good. BOK CHOY Availability is good. BROCCOLI Supplies will be steady for the next few weeks. Quality is showing some issues from the heat such as browning. Good green color and texture. BRUSSEL SPROUTS Steady to stronger supplies this week. Quality is good, but occasional insect damage and some discoloration are still present. Market will remain very steady and demand continues to be high. CARROTS Great quality and good supply! CAULIFLOWER Supplies are good. Quality is good. CELERY Plentiful supplies, quality is good. We are seeing occasional pith mostly in outer stalks as well as some black heart. CORN Georgia corn very promotable this week and next with good quality and availability. Yellow, Bi- Color and limited White Corn are all available. Next week, some small startup areas are in Mississippi and North Carolina as well. West coast corn is moving up to the Brentwood area with volume increasing over the next two weeks which could show some relief in pricing in the west. FENNEL Supplies for the week will be good. 7

8 GARLIC EXTREME MARKET* We are finally nearing the end of the 2015 garlic season, and it can t be over soon enough. As expected, we will not be fully into our 2016 California Late variety harvest until mid to late July. We expect to have a good/decent crop. There are minor concerns about the clove structure (i.e. there may be a higher percentage than normal smaller cloves). However, we are simply eager to have sound, quality garlic. We did not observe the developmental/maturity issues that we experienced with the 2015 season. Plants formed their normal head/bulb in all three of our main California growing regions. It s a little premature to know for certain, but the 2016 Late crop appears to be fairly good on both quality and lbs. Moreover, while be won t be fully into the Late crop until later in July, there are a few fields for processing that fortunately will be ready sooner. We will begin harvesting that acreage this week and, after the initial lbs. have dried down for peeling, we plan to fully transition to our 2016 crop sometime the week of the July 4 th. At that time, we will return to 100% California peeled garlic. GINGER Chinese ginger is in good supply and offered at a substantial discount when compared to ginger from Brazil. GREEN CABBAGE Green cabbage supplies remain average. Quality is good. Prices are good. GREEN ONIONS Plentiful supplies and quality is good; we are seeing some reports of mildew and insect pressure in some product, but most product looks very nice. KALE (GREEN) Demand is steady and quality is very good. MACHE Adequate availability. NAPA Market is lower due to increased supply. Demand is strong, prices are lower. Quality is good with increased reports of internal defects primarily with seeders. PARSLEY (CURLY,ITALIAN) Prices are normal and quality is excellent. RADISHES Market is good and prices are low, local deals have started making an abundant supply. Quality is good. RED CABBAGE Quality and sizing has been great, with good color. Overall, the market is strong. SNOW & SUGAR SNAP PEAS Snow and sugar snap peas are still in high demand. Quality is good. BABY SPINACH Baby Spinach and Clipped Spinach supplies are light. Quality is fair to good. Prices are good. Some reports of insects. 8

9 BUNCHED SPINACH Supply is average, demand is strong. Quality is average, we are seeing some sun scalding and tip burn however we expect to see quality improvethis week. Some reports of insects. ONIONS Onion pricing has stabilized as both New Mexico and the San Joaquin Valley in California have both started shipping. The Imperial Valley and North Texas regions should finish up their programs over this week and next. We still expect to see more elevated pricing than normal, but not quite as extreme as we have seen over these past two weeks. POTATOES (IDAHO) Supplies on cartons have exceeded demand over the last week, and we have seen some decrease in pricing across the board. No. 2 grade potatoes and small size consumer bag potatoes are in good supply and are currently exceeding demand. The current storage crop season is expected to finish up around the first to second week in August, with new crop Norkotahs starting around the same time. TOMATOES East The Central FL region is finished. The growing region now spreads to the coastal Carolinas. The inland SC region is now in production with good supplies and lower FOB prices on all sizes. Good quality is expected to continue through the remainder of the month. Romas- FOB prices are down with good quality and supply. Grapes- FOB prices remain generally steady this week with upward pressure. Quality is very good. Cherries- FOB prices remain generally steady this week. Quality is very good. West/Mexico Rounds- Vine-ripes continue to cross through Baja and McAllen. Quality is good across the west. Mature Greens are now in full production out of California, however will need continued observation of the weather as higher than normal temperatures will continue. FOB prices remain low this week but are expected to tick upward next week should there be any damage from the heat. Romas- Supplies continue to be good and FOB prices are currently low however we could see an increase if the mature green market is affected. Quality is very good. Grapes- Supplies continue out of McAllen and Baja. We continue to see some quality issues. Cherries- FOB prices generally steady with upward pressure. Quality is only fair. TREE FRUIT Grapes: The new crop harvest is underway in Mainland Mexico and the Coachella Valley of California. Flame seedless are in good supply, with tight availability for premium quality green seedless (Sugarone Variety) grapes. Peaches: Yellow flesh are available in smaller sizes; availability has improved. White Peaches: Light supplies. Nectarines: Plentiful availability. White Nectarines: Limited availability. Apricots: Plentiful supplies. Plums: Red and Black plums are in limited supply; the early season harvest is heavy to small sizes. Cherries: Spring rainfall caused significant damage to the California crop, resulting in quality 9

10 issues and upwards of 50 percent crop loss. The California season will be finished by early June. Kiwi: Plentiful availability for new crop kiwi from Chile. WASHINGTON APPLES & PEARS Overall demand is slower due to schools being out. Supplies are very tight on small sizes, all varieties & lower grades, especially 125/138 size. Expect this scenario to continue through August. Volumes continue to be in Premium grade only US#1. Availability is tight across all sizes. Red delicious, grannies, galas and gold will remain tighter than expected until new crop begins. Demand on pears exceeds available supplies on all sizes and varieties. This will also continue through the end of summer. Transportation is not an issue and freight rates are favorable. COMMODITY PRICE EXPECTED PRICE TREND QUALITY Avocados Avocados-California Avocados-Mexican HIGH Varies by Size Good Berries Blackberries Moderate Steady Good Blueberries Moderate Steady Good Raspberries Moderate Steady Good Strawberries Moderate Steady Good California-Arizona Citrus Grapefruit Moderate Steady Good Lemons Moderate UP Good Limes High Steady Excellent Oranges-Navels Navels Good Good-Navs Pineapple Moderate Steady Good California Lettuce Green and Red Leaf Good Down Good Iceberg Moderate Up Fair Romaine Moderate Down Good 10

11 COMMODITY PRICE EXPECTED PRICE TREND QUALITY Romaine Hearts Moderate UP Good Eastern & Western Vegetables Cucumbers Moderate Steady Excellent Green Beans EXTREME Steady Excellent Green Bell Peppers High Up Good Red Bell Peppers HIGH UP Good Yellow Squash Moderate UP Good Zucchini Moderate Steady Good Grape & Tree Fruit Grapes-Green Seedless High Down Good Grapes-Red Seedless Moderate to High Down Good Plums Moderate Steady Good Melons Cantaloupes Good Steady Good Honeydew High Steady Good Mixed Vegetables Artichokes Good Steady Excellent Arugula Good Steady Good Asparagus Good Down Good Bok Choy Good Steady Good Broccoli Low Steady Good Carrots High Steady Good Cauliflower Low Up Good Celery Very High Down Good Frisbee Moderate Steady Good Fennel/Anise Moderate Steady Very Good Garlic, Peeled High Steady Good Green Cabbage High Steady Excellent Green Onions Moderate Up Fair 11

12 COMMODITY PRICE EXPECTED PRICE TREND QUALITY Kale (Green) Low Steady Very Good Mache Moderate Steady Good Napa Moderate Up Fair Parsley (Curly/Italian) Moderate Up Very Good Red Cabbage Moderate Steady Excellent Snow and Sugar Snap Peas Steady Up Poor to Fair Spinach (baby) Low Steady Good Spinach (bunched) Low Steady Good Spring Mix Low Steady Good Onions Red Moderate Up Good White Moderate Lower Good Yellow Moderate Lower Good Potatoes (Idaho) Idaho Russets Variable Steady Good Tomatoes Round, Grape Moderate Steady Good Romas Moderate Steady Fair to Good Washington Apples & Pears Red and Golden Delicious, Granny Smiths, Pinks Steady Steady Good Golden Delicious, Fuji New Crop Steady Steady Good Galas, Honeycrisp New Crop, D Anjous, Bosc Pears High Up Good Bartlett Pears Moderate Steady Good 12

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