After a sluggish December, importers of Mexican watermelons report stronger markets in January — and they likely will last a lot longer than that.
“It’s going to get a little short, and a little crazy,” said Brent Harrison, president of Nogales, Ariz.-based Al Harrison Co. “I’m afraid there will be a bidding war.”
The Jalisco and Nayarit growing regions likely will wind up production in the first half of February, Harrison said. Between then and early April, supplies will be tight.
“We’re looking at a gap the second half of February and most of March,” he said. “We’re already starting to see some of the effects of it.”
Also, strong domestic demand in Mexico is luring producers with the promise of being paid in cash, Harrison said.
“It’s hard to compete with that.”
Rising prices in mid-January are driven by supply more than demand, said Ward Thomas, owner of McAllen, Texas-based Majestic Produce Sales.
“They’re going up right now due to a lack of supplies coming in,” Thomas said Jan. 16.
That was a welcome relief after a sluggish start to the import season, he said.
Jimmy Henderson, owner of Warren Produce LLC, McAllen, agreed.
“Demand has been off for the past month,” he said Jan. 16. “It was pretty slow, then all of a sudden, you have 40% less coming in. It caused the market to react quite a bit.”
On Jan. 21, the U.S. Department of Agriculture reported prices of $5-6 per melon for 15-pound to 18-pound red-flesh seeded melons and $5-7 per melon for red-flesh seedless watermelons, the same price as last year at the same time.
Henderson doesn’t see that changing anytime soon.
“We’ll see a lot higher f.o.b.s for the foreseeable future,” he said. “There are no new areas to change the supply side until mid-March.”
New growing regions will come on before then, but they’re not big enough producers to likely make much of a dent in markets, Henderson said.
Looking back on the pre-rain market, Henderson isn’t quite sure what kept demand in check.
“I wish I could tell you,” he said. “It really concerned me. We had a mild December, but the crossings compared to last two years were down, and the markets were also down” from the past two years, he said.
What troubles Henderson the most is that the sluggish movement and markets may have been primarily due to forces beyond his and other importers’ control.
“Malaise in the economy is my guess,” he said. “And that’s scary — it’s hard to fight.”
And while the weather problems in Mexico will buoy markets for a while, the industry could be in for another lull if demand doesn’t pick up before the domestic deals begin this spring.
“We’ll have domestic watermelons by the end of March in Florida,” he said.
If demand hasn’t picked up by then, the industry could be in for a glut.
The rain-delayed lighter supplies in January dovetailed with typical post-holiday market behavior, said Jeff Fawcett, sales manager for Edinburg, Texas-based Bagley Produce Co.
The combination of stronger demand and lighter supplies came not a minute too soon.
“The last few weeks have been brutal,” Fawcett said. “Pricing should strengthen. I feel February, March and April will be pretty decent months.”