VEGETABLES AND SPECIALITES YEARBOOK -- SUMMARY July 23, 1998 July 1998, VGS-275 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 this report will be available about 5 working days following this summary release. --------------------------------------------------------------------------- Fresh Vegetable Retail Prices To Ease A cooler and wetter than average 1998 winter and spring interrupted growers' planting schedules, slowed crop growth, and reduced yields in California and Florida. The result was a 15- percent increase in retail prices for fresh-market vegetables during the first half of the year. Hot, dry summer weather may reduce per-acre yields for some unirrigated vegetables and melons in States such as Texas and Georgia; but national prices are largely unaffected because of local production in other areas. Assuming average weather for the balance of the summer and fall, retail prices are expected to remain near year-earlier levels. Processors of five selected vegetables (tomatoes, sweet corn, snap beans, green peas, and cucumbers) expect to contract for 1.4 million acres in 1998--up 1 percent from a year earlier. Stronger processing tomato prices and the lack of attractive crop alternatives led to the increase. Canners and freezers each increased contract area 1 percent. Overall, processors increased or maintained acreage for most of the major vegetables. For processing tomatoes, the cool, wet spring weather in California (which accounts for 95 percent of the crop) delayed the start of planting by three weeks. Processors are now concerned tomato harvesting in August could overwhelm handling capacity, resulting in loss of fruit and reduced production. As of July 1, the 1998 U.S. processing tomato crop is expected to remain even with a year earlier at 9.9 million short tons. With production and inventory levels falling, wholesale prices for most processed tomato products have risen over the past year. Given average acreage losses and trend yields for the other processing vegetables in 1998, output could total 1 to 3 percent above last year's 15 million short tons. The first estimate of 1998 contract production for green peas indicates a 1-percent increase from 1997 to 481,600 short tons. Overall harvested area is up 4 percent, but per-acre yields are off 3 percent. The decline is indicated in the canning sector, where low wholesale prices discouraged processors from increasing contract area. Freezers contracted 2 percent more green pea acres to continue rebuilding stocks, which a year ago were down to the lowest levels since 1989. Green pea production increased in States such as Oregon (up 18 percent) and Washington (up 5 percent) where the majority of vegetable processors produce frozen products. U.S. fall-season potato growers expect to harvest 3 percent more area in 1998, led by North Dakota (up 19 percent), Wisconsin (up 6 percent), Minnesota (up 5 percent), and Idaho (up 4 percent). North Dakota's harvested area reflects recovery from the floods of 1997 when heavy summer rains caused abnormally large acreage losses. During the March to May period, when most fall-season potatoes were being planted, U.S. shipping-point prices for all potatoes averaged $6.31 per (cwt), 31 percent above a year ago. Summer-season potato growers increased harvested acreage 9 percent this year. Given a slight decline in yields, summer potato production is expected to rise 8 percent to 19.3 million cwt. This increase partly reflects strong demand for chipping potatoes caused by weather-shortened spring-season supplies and the introduction of new products by chip manufacturers. The summer crop typically accounts for 4 percent of all potato production, with Colorado, California, and Missouri the leading States. In 1998, U.S. dry bean growers expect to harvest an estimated 1- .94 million acres, up 13 percent from a year ago and 8 percent above the average of the 1990's. Most of the indicated gain is in North Dakota (up 34 percent to a record high), Colorado (up 33 percent), and Minnesota (up 16 percent) and is likely concentrated in pinto beans. With exceptions like pinto, Great Northern, and black beans, market prices for most bean classes have not been significantly above a year ago. However, exports are strong this year and prices for alternative commodities like wheat and corn have not been attractive enough to pull area out of dry beans. As a result, growers increased area substantially this year. In 1997, U.S. vegetable production (including potatoes, sweet potatoes, and pulses) declined 3 percent from the previous year to 1.3 billion hundredweight (cwt). Although output was stronger for fresh-market vegetables and melons (up 5 percent to a record high), dry edible beans (up 4 percent), and dry peas and lentils (up 109 percent), these gains were outweighed by 8 percent declines in both processing vegetables and potatoes. The United States exported nearly 8 percent of its fresh-market vegetable and melon supplies (production plus imports) in 1997, the same as a year earlier. On the other side of the ledger, imports accounted for close to 14 percent of U.S. fresh vegetable use, up from 13 percent a year earlier. About 8 percent of canned vegetable supplies were exported in 1997, while imports accounted for 5 percent of canned vegetable use. In 1997, 8 percent of vegetables for freezing (excluding potatoes) were exported. About 18 percent of vegetables consumed in frozen form were imported in 1997, with broccoli accounting for about 46 percent of all frozen vegetable imports. Per capita use of 56 selected vegetable and melon categories remained even in 1997 at 446 pounds (farm-weight basis). Increased use was again experienced in the fresh market, because of a surge in demand the past few years. Per capita use of fresh vegetables (excluding potatoes) increased 4 percent from a year earlier to 161 pounds. Record-high per capita use was experienced in several fresh-market vegetables, including carrots, cucumbers, romaine/leaf lettuce, cantaloupe, and tomatoes. Per capita use also remained strong for onions, peppers, cabbage, and garlic. In the 1990's, per capita use of fresh-market carrots has averaged 33 percent above the average of the 1980's. In 1997, per capita use of fresh carrots totaled 12.5 pounds, eclipsing the previous record set in the mid-1940's. Fresh-market carrot consumption is projected to increase again in 1998. Per capita use of processing vegetables (on a fresh-equivalent basis) declined 3 percent to 125.9 pounds in 1997. Canning vegetable use declined 2 percent to 102.5 pounds, led by lower use of tomatoes and sweet corn. Per capita use of vegetables for freezing (excluding potatoes) declined 4 percent to 22.5 pounds in 1997, as use of all commodities, except green peas, declined. Printed copies of the Vegetables and Specialties Situation and Outlook Yearbook will be available in about 2 weeks. For more information, contact Gary Lucier, 202-694-5253. The text of the report will also be available electronically, for details call 202-694-5050. END_OF_FILE