News from the Field: Spring Crop Update

June 10th 2013 Comments

As we end winter with the main harvest of carrots in China’s Jiangsu province, which runs from December to March, we start looking at the vegetables harvested in spring. In both Europe and China, this is the period for the main harvest of spinach. In China the fall harvest of spinach is also plentiful but the advantage of using material from spring is that we can take advantage of colder temperatures, which leads to less insect activity and in turn enables us to use less crop protection chemicals. As a result, Silva and our growing partners source a high percentage of spinach from the spring crop.

This year, the main producing areas along the east coast of China, Germany, Poland, and Hungary have had a long and cold winter delaying the harvest of spinach. With the late start we have seen a smaller harvest than in a normal year, with a slightly upward pressure on price as a result. Available quantities are limited, most notably from European sources.

The eastern coastal areas of China are also a main source of leeks and green onions. The scenario this year follows the spinach crop pattern, with a late start and slightly disappointing yields. Good results from the 2012 summer and fall harvests in China, however, have generated some carryover stocks that limits the impact. Our quality team in China has—as always—been involved with our growers, ensuring our material meets the regulatory requirements for the United States, especially on pesticide residue levels. We also look to the summer crop of leeks from central China, as well as the fall crop of both green onions and leeks, to provide relief from the disappointing spring harvest.

The planting is also underway for bell peppers and tomatoes in the north and northwestern parts of China. The initial assessment suggests a reduction in the bell pepper planting area of about 20% and a significant decrease in planting of tomato, due to less demand from tomato paste producers. Assuming an average season without further damaging climate factors, we estimate the output of bell peppers to be very similar to 2012, considering the main planting area in Inner Mongolia in China suffered from damaging floods last year. The scenario on bell peppers, however, is always changing and we will have to wait until late August to make additional projections regarding total output, carryover stocks from 2012, and pricing trends from the new season.

The tomato outlook is also challenging to predict. A large percentage of the tomato crop in China is pre-contracted with the tomato paste industry. Pre-contracting and actual usage and demand, however, are not always in perfect equilibrium. Therefore, the output and pricing for air dried tomato is determined by the final price between tomato growers and paste manufacturers, as well as the spread in supply and demand of tomato for the paste industry.

Our team around the world continues to monitor crop developments to ensure the final products you receive meet our high standards. Contact us to discuss any items of interest in greater detail