January 5, 2016

Allen Lund Company Newsletter

Written by your perishable experts

In This Issue

What Does the Crystal Ball Say for 2016?

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Allen Lund Company

Contact Info

Kailyn Wolf, Editor
4529 Angeles Crest Hwy., Suite 101
La Cañada, CA 91011
(800) 475-5863 - Office

kailyn.wolf@allenlund.com

www.allenlund.com

What Does the Crystal Ball Say for 2016?

The birthstone for January is a garnet; a beautiful gem, certainly. However, in the perishables world, January doesn't mean gemstones, it means crystal balls. Many shippers are quoting their business for the year, both on their product and their transportation. Year-long bids for pricing and commitments are very common. Negotiating like this can be very challenging for all parties, and it involves a lot of guesswork and assumptions. What will the economy be like? How will the stock market perform? What will the Fed do on interest rates? What will happen with OPEC and the cost of oil? Who will win the World Series? (Go Dodgers!)

When looking into my crystal ball, I see a recent article from The Packer, specific to produce pricing for the New Year. They were referring to information provided by the USDA, which is predicting a 2.5% to 3.5% retail inflation on fresh fruits. This would be quite a jump from what is looking like a deflation of around 2% for 2015. Dairy products are expected to cost you an extra 2% or 3% in 2015. Egg prices are very difficult to predict, however there is some feeling that a very slight 1% increase will come to pass.

Specifically in my market in the Pacific Northwest, fresh produce leads the way on transportation pricing. Crop levels, quality, and pricing dictate so much of the transportation piece. Apples are the key commodity at the beginning of the year. According to the Capital Press, the end of December saw an improvement in both shipment volume (domestic) and pricing on apples. In fact, Gala's saw a late December pricing increase of $4/case. While it's too early to really predict crop volume for 2016, many grower-shippers are optimistic for increases from 2015 on both the volume and quality of the fruit.

What does your crystal ball tell you about this new year? I'd be interested to hear your predictions and guesses on what pricing will be like for your perishable commodity.

Steve Hull

Manager, Portland

steve.hull@allenlund.com

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Steve Hull is manager of the Portland office and has been with the Allen Lund Company for 18 years. Hull is a graduate of the University of Southern California completing a dual major in Political Science and U.S. History.

About Allen Lund Company: Specializing as a national third-party transportation broker with nationwide offices, the Allen Lund Company works with shippers and carriers across the nation to transport dry, refrigerated (specializing in produce), and flatbed freight; additionally, the Allen Lund Company has an international division, which is licensed by the FMC as an OTI-NVOCC #019872NF, and a logistics and software division, ALC Logistics.

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