FRUIT AND TREE NUTS -- SUMMARY September 7, 2000 September 2000, ERS-FTS-289 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete text of FRUIT AND TREE NUTS will be available electronically in about a week following release of this summary. ----------------------------------------------------------------------------- Larger Crops Point to Lower Fruit Prices During the Second Half of 2000 Grower prices for many fruit crops averaged lower than a year ago this summer due to increased production. Crops included are grapes, strawberries, oranges, grapefruit, and lemons. Improved weather conditions, specifically in California, Washington, and Florida, contributed to the expected larger crops in 2000. The grower price index for fruit and nuts in July and August 2000 averaged 8 percent below the July-August 1999 index. Prices are likely to remain below a year ago through most of the second half of the year, as the anticipated slightly larger apple crop this fall could lead to lower prices. Meanwhile, grower prices for pears and tree nuts are expected higher in 2000/01 due to reduced production. Lower retail prices for Valencia oranges, grapefruit, lemons, strawberries, and Thompson seedless grapes weakened retail prices for fresh fruit in July 2000 compared with a year ago. During the fall, retail prices will continue to be weakened by slightly larger apple supplies. The 2000 U.S. apple crop is forecast up 1 percent from a year ago. Increased production in most Western States will offset anticipated declines in the Central and Eastern States. Due to the slightly larger crop, apple prices in 2000/01 will likely average lower than in 1999/2000. Ample supplies and slightly lower prices will likely improve both domestic and export demand for U.S. apples, particularly in the fresh-market sector. Domestic consumption of fresh apples is forecast to increase 1 percent from the 18.7 pounds per person estimated in 1999. U.S. grape production for 2000 is forecast at 14.7 billion pounds, up 18 percent from a year ago and surpassing the previous record of 14.6 billion pounds in 1997. California's production is expected to set a record, up 21 percent from 1999. Larger crops are also anticipated in other major producing States, except New York and Pennsylvania. Record production this year points to lower grape prices. Increased competition from ample supplies of stone fruit and citrus fruit has put additional downward pressure on fresh grape prices during the summer. A combination of increased production, lower prices, and the good quality of this year's crop will help promote domestic consumption and U.S. exports of fresh grapes. Domestic consumption of fresh grapes is forecast to increase about 7 percent from 1999's estimate of 8.2 pounds per person. U.S. pear production for 2000 is forecast down 2 percent from 1999 due to reduced production of Bartlett pears, mostly used for processing. The overall decline in pear production this year is expected to lead to higher grower prices in 2000/01. Lower supplies and higher prices of fresh pears will likely lead to a decline in domestic consumption from the 3.5 pounds per person in 1999. U.S. fresh pear exports will also likely be limited by these same factors. Overall stone fruit production (peaches, nectarines, plums, prunes, apricots, and cherries) in 2000 is expected to be up from a year ago due mainly to a larger U.S. peach crop. Peaches make up about 70 percent of U.S. stone fruit production, and this year's increased harvest is enough to offset expected output declines for cherries and combined output of prunes and plums in Idaho, Michigan, Oregon, and Washington. The larger, good quality crop, along with lower retail prices, will likely boost consumption of fresh peaches (including nectarines) in the United States in 2000 about 1 percent higher than last year's 5.3 pounds per person. Larger supplies of California plums and apricots are also expected to lead to lower prices and increased domestic consumption in 2000. Meanwhile, the smaller sweet cherry crop, combined with a strong export market, will likely reduce domestic cherry consumption about 4 percent from last year's estimate of 0.65 pound per person. Commercial strawberry production in the six major producing States (CA, FL, OR, WA, MI, and NJ) is forecast up 7 percent from a year ago. Oregon and Michigan are the only States where production is expected to decline. The larger domestic crop and anticipated reduced exports from Mexico will lead to lower imports of fresh strawberries in 2000. Increased supplies, good quality, and lower prices are likely to boost this year's U.S. fresh strawberry consumption from 1999's 4.52 pounds per person. Demand for U.S. fresh strawberries is expected to continue strong in major markets such as Canada, Japan, and Mexico, as economic conditions there have improved. Based on preliminary crop indications reported by the North American Blueberry Council (NABC), the 2000 U.S. cultivated blueberry crop is estimated to be down about 3 percent from a year ago. Much of the decline appears to be a result of significantly lower production in Michigan and New Jersey, where more than half of the U.S. cultivated blueberry crop is produced. NABC estimated there were fewer blueberries for fresh use this year, while processing use increased. U.S. cranberry production is expected to decline 8 percent in 2000 from a year earlier. Production declines are expected in Massachusetts, New Jersey, and Wisconsin, while output increases are anticipated in Oregon and Washington. Continued large supplies stemming from an above-average crop this year and large inventories will likely keep grower prices for cranberries low during the 2000/01 season. Tropical fruit imports were up in 1999. Per capita consumption of the major imported tropical fruit--bananas, pineapples, mangoes, and papayas--is estimated to increase 18 percent between 1990 and 1999. Banana consumption accounted for the largest share, increasing from 51 percent of all tropical fruit consumed in 1990 to 79 percent in 1999. Fresh mango and papaya consumption, however, have increased the most. The forecast 1999/2000 citrus crop increased 27 percent from the previous year under good growing conditions in both California and Florida. All citrus crops, except Florida tangelos, were larger. California's citrus crop increased 59 percent over the freeze-damaged crop in 1998/99. Florida's citrus production increased 22 percent. Dry conditions in late 1999 and throughout most of 2000 could affect the 2000/01 crop. The crop has been reported to be in good condition through the middle of the year with the aid of heavy irrigation. The 1999/2000 U.S. orange crop is expected to increase 33 percent from the previous year, but was 5 percent lower than the record 1997/98 crop. Production increased in all States except Arizona. Approximately 11 million tons are expected to go to processing, mostly as juice, a 24-percent increase over last year. Oranges this season were late to mature, small, and of reduced quality than the record crop in 1997/98. This, along with strong competition from imported Clementines, reduced the prices growers received for fresh oranges. The larger crop this year will likely reduce imports and increase exports of both fresh oranges and orange juice. Orange juice production in 1999/2000 is forecast to increase 24 percent over 1998/99, the second highest on record. Juice yields were slightly below the average over the past 5 years. Domestic supplies were estimated to set a record as a result of increased production, high juice stocks, and continued strong imports. Hence, prices Florida growers received for their processing oranges have averaged lower thus far this season. Grapefruit production is expected to rise 11 percent in 1999/2000 from a year earlier, the largest crop in 3 years. Production was up in Florida and California, but down in Texas and Arizona. Florida's crop, which accounts for 81 percent of the total crop, was up 13 percent. Florida fresh grapefruit grower prices fell 15 percent from last year, but remained strong relative to the previous 2 seasons as a result of demand from processors to build juice stocks. Florida grower prices for processing grapefruit increased in 1999/2000, the first season in 3 years when growers received positive returns. Continuing the downward trend observed since 1996/97, fresh grapefruit consumption in 1999/2000 is expected to decline about 11 percent from a year ago, reflecting more fruit going to processing and weak consumer demand. Total production of tree nuts will likely decline this season from the record set at 2.6 billion pounds in 1999/2000. The California Agricultural Statistics Service forecast lower production of almonds and walnuts. Smaller crops of hazelnuts and pecans are likely. Pistachio production, meanwhile, is forecast at a record high. With reduced overall supplies, grower prices are likely to average higher than a year earlier, but domestic use and exports are expected to be limited. Printed copies of the Fruit and Tree Nuts Situation and Outlook report will be available in about 2 weeks. For more information, contact Agnes Perez 202-694-5255. This issue contains two special articles, "More Land but Fewer Farms Dedicated to Fruit Production in 1997" and "The U.S. Grapefruit Market." The full text of the report will also be available electronically via the ERS website at www.ers.usda.gov. END_OF_FILE