VEGETABLES AND SPECIALTIES YEARBOOK--SUMMARY July 24, 1997 Approved by the World Agricultural Outlook Board ------------------------------------------------------------------------------ This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. The complete text of VEGETABLES AND SPECIALTIES YEARBOOK will be available 2-3 working days following release of this summary. ------------------------------------------------------------------------------ Fall Potato Acreage Down 5 Percent in 1997 U.S. fall-season potato growers expect to harvest 5 percent less area in 1997 led, by Washington (down 8 percent) and Idaho (down 5 percent). Planted area was down 6 percent, as expected, following the large 1996 crop and extremely low grower prices during the past year. During spring 1996, when most fall-season potatoes were planted, grower prices averaged $4.90 per hundredweight (cwt), 39 percent lower than a year ago. Given trend yields, total 1997 potato production will likely decline 5 to 9 percent this year. Production is expected to be lower in most States, except for New York and Nebraska. Nebraska is experiencing an expansion in potato production as large multi-State farm operations diversify their production base. Nebraska expects to harvest 54 percent more potato area this fall. Nebraska accounts for about 2 percent of the 1997 U.S. fall acreage. U.S. vegetable production (including potatoes, sweet potatoes, and pulses) in 1996 increased 5 percent from the previous year to 1.3 billion cwt. Production was stronger for fresh-market vegetables and melons (up 4 percent) and sweet potatoes (up 4 percent) but was smaller for processing vegetables (down fractionally), dry edible beans (down 11 percent), and dry peas and lentils (down 48 percent). Sharply lower yields caused by a late spring and a dry summer in eastern Washington and Idaho led to the drop in dry pea and lentil output. The 1996 processing vegetable crop was one of the largest on record, although slightly lower than 1995. Production declined for 10 of the 13 processing crops. Cabbage, beets, and green peas registered the largest declines, offsetting larger crops of tomatoes and snap beans. Processing tomato output increased as a result of stronger yields. Increased output led to low tomato product prices through the middle of 1997. Prices for bulk tomato paste (fancy 31 percent) averaged 14 percent below a year earlier during the first 6 months of 1997. At the same time, wholesale prices for all processed vegetables changed little from a year earlier. At the wholesale level, canned vegetable prices were flat, while frozen vegetables averaged about 1 percent higher than a year ago. Area contracted by processors of the five leading vegetables (tomatoes, sweet corn, snap beans, green peas, and cucumbers) is expected to decline 3 percent to 1.35 million acres in 1997. Processors reduced area 9 percent last year. While green pea and cucumber (for pickles) area is expected to increase, tomatoes, sweet corn, and snap beans are expected to decline. The 1997 U.S. processing tomato crop is expected to decline 8 percent to 10.3 million short tons. Canners contracted fewer areas of sweet corn, snap beans, and green peas in 1997, while frozen vegetable processors contracted for 12 percent more. However, given the smaller processing tomato crop and likely reduced output for sweet corn and snap beans for canning, total processing vegetable output will probably decline from the strong levels of a year ago. The first estimate of 1997 contract production for green peas indicates a 20-percent increase from 1996 to 494,680 short tons. Harvested area is up 14 percent and per-acre yields 5 percent. Freezers' contracted 31 percent more green pea acreage to replenish stocks which were down to the lowest levels since 1989. Green pea production increased in States such as Washington (up 35 percent) and Oregon (up 67 percent) where processors mostly freeze rather than can. In 1996, retail prices for fresh-market vegetables (including potatoes) averaged 2 percent below a year earlier. Retail prices for all major vegetables (except tomatoes, cucumbers, and potatoes) averaged below a year earlier. In 1997, retail prices for fresh-market vegetables will likely register a small increase, following sluggish grower prices. During first-half 1997, fresh market retail prices averaged 1 percent below a year earlier due to lower prices for potatoes, cucumbers, and lettuce. First-half canned vegetable prices rose 4 percent, while frozen vegetables increased 3 percent above a year earlier. Romaine lettuce continues to increase its share of overall lettuce acreage in the 1990's. In 1996, romaine accounted for 13 percent of lettuce area compared with 7 percent in 1992. The share of lettuce area devoted to leaf varieties has risen from 14 to 15 percent since 1992. Lettuce area overall has increased 2 percent since 1992, but head lettuce has lost market share. Although still strong on the restaurant/foodservice side of the market, demand for head lettuce appears to have slackened on the retail side as romaine has gained favor among consumers. In 1996, the value of U.S. vegetable and melon imports exceeded exports. Exports declined 2 percent to $2.8 billion, while imports rose 12 percent to $3.0 billion. U.S. imports from Mexico rose 16 percent and accounted for about 53 percent of total vegetable and melon imports. Although the United States has a trade deficit in fresh vegetables, melons, frozen vegetables, and mushrooms, substantial trade surpluses continue in canned vegetables, potatoes, dried and dehydrated vegetables, dry edible beans and peas, and vegetable seed. During the first 5 months of 1997, fresh-market tomato import volume was 2 percent higher than a year earlier. Mexico's share of the U.S. fresh tomato import market continued to slip as volume declined fractionally. At the same time, imports (mostly greenhouse and hydroponic product) from countries such as Canada, the Netherlands, Israel, and Spain jumped 53 percent as U.S. consumers embraced higher quality (and higher priced) hothouse tomatoes. The average import value for tomatoes (largely field-grown) from Mexico was $0.36 per pound, but hothouse product from countries like Canada ($0.82 per pound) and the Netherlands ($0.87 per pound) averaged considerably more. In 1996, the United States exported nearly 8 percent of its fresh-market vegetable supplies (production plus imports), down fractionally from 1995. On the other side of the ledger, the United States imported about 12 percent of its fresh vegetable supplies, up from 11 percent a year earlier. About 6 percent of canned vegetable supplies were exported in 1996, while 2 percent were imported. In 1996, 7 percent of vegetables for freezing (excluding potatoes) were exported. Imports accounted for 10 percent of freezing supply, and broccoli accounted for half of all frozen vegetable imports. The value of U.S. vegetable exports to Hong Kong (including potatoes, melons, pulses, mushrooms, and vegetable seed) totaled $90 million in 1996, up 14 percent from a year earlier. Six commodities accounted for two-thirds of the vegetables exported to Hong Kong. The major items exported to Hong Kong were canned sweet corn ($17 million), frozen french fries ($16 million), lettuce ($12 million), celery ($6 million), potato chips ($5 million), and tomato ketchup ($4 million). Per capita use of 56 selected vegetable and melon categories rose 3 percent in 1996 to 443 pounds (farm-weight basis). Most of the gain originated in the fresh market where prices were lower and supply stronger. Fresh vegetable and melon use (excluding potatoes) increased 5 percent to 154 pounds per person-- the highest since the mid-1940's. Per capita use increased for most fresh items in 1996, with most of the gain in watermelon, cantaloup, carrots, bell peppers, and sweet corn. Watermelon use totaled 17.4 pounds in 1996--the highest since the late 1950's, while the surging popularity of baby-cut and fresh-cut carrots continues to drive fresh carrot use higher. In 1996, fresh carrot use rose 13 percent to 10.2 pounds, compared with an average of 7.5 pounds in the 1980's. Per capita use of vegetables for processing (excluding potatoes and mushrooms) fell slightly to 129 pounds per person as use of canning vegetables fell 1 percent. Per capita use of vegetables for freezing (excluding potatoes) rose 3 percent to 23.5 pounds. Per capita use of frozen vegetables has increased 43 percent since 1978, mirroring a 39-percent surge in fresh use. Canning vegetables increased 14 percent during this time due to rising use of processed tomato products. Excluding tomato products, canning vegetable use has declined about 17 percent since 1978. Based on preliminary data, per capita use of potatoes in all forms increased 4 percent in 1996 to 143 pounds. Decreased use of fresh potatoes was outweighed by increased use of frozen and dehydrated product. Overall potato use is forecast to remain flat in 1997 as production declines and marketings during the second half of the year decrease. Despite smaller output this fall, ample supplies of low-cost potatoes during the first half of 1997 likely boosted fresh use to over 50 pounds per person. For sweet potatoes, higher production in 1996 allowed per capita use to rise slightly to 4.6 pounds--6 percent above the 1990-95 average. For more information contact Gary Lucier (202) 219-0117. Printed copies of the VEGETABLES AND SPECIALTIES YEARBOOK will be available in about 2 weeks. For details, call (202) 219-0515. END_OF_FILE