VEGETABLES AND SPECIALITIES YEARBOOK -- SUMMARY July 27, 2000 July 2000, VGS-281 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. --------------------------------------------------------------------------- Vegetable Consumption To Remain Record High In 2000, vegetable and melon consumption is projected to exceed the 1999 record high. On a per capita basis, the total is expected to remain near last year's level. Reduced fresh-market use is expected to be offset by increases in canning vegetables and potatoes. Fresh-market use will likely decline about 1 percent as growers and shippers reduce production in response to financial losses caused by low shipping-point prices the previous year. However, canning use is forecast to rise about 3 percent, led by an increase in processed tomato products. Per capita use of all vegetables and melons totaled 454 pounds in 1999--up 8 pounds from a year earlier. Large supplies and much lower prices led to a 5-percent increase in fresh vegetable use (excluding potatoes). Increases were also noted in vegetables for freezing, potatoes, and dry beans. On the fresh-market side, significant increases in 1999 per capita use were experienced in cauliflower (up 40 percent), head lettuce (15 percent), broccoli (15 percent), cantaloup (9 percent), and watermelon (8 percent). Utilization of cantaloup, which has enjoyed increasing popularity over the past few years, increased as supplies from both domestic (up 7 percent) and import (up 18 percent) sources rose. Very few fresh-market vegetables experienced reduced use last year, with declines in cabbage (down 8 percent), leaf/romaine lettuce (7 percent), and tomatoes (1 percent) most noteworthy. Per capita use of all processing vegetables (including potatoes and mushrooms) totaled 224 pounds (fresh equivalent) in 1999, largely unchanged from a year earlier. The lack of change was due to a 4-percent drop in use of canning vegetables, which offset a 4-percent gain in vegetables used in frozen products (including potatoes). Canning use (including potatoes and mushrooms) totaled about 106 pounds per person, with freezing use (including potatoes) at 86 pounds. Another 29 pounds per capita of potatoes are processed into chips and dehydrated products. In 2000, utilization of processed vegetables is expected to increase 2 percent, spurred largely by lower prices for several canned products. Shipping-point prices for fresh-market vegetables have been on a roller coaster during 2000. In the first half of the year, prices received by U.S. commercial vegetable and melon growers averaged 1 percent less than a year earlier and 8 percent below 2 years ago. Continuing a general slide that began in the spring of 1999, shipping-point prices for fresh-market vegetables during the first quarter averaged 13 percent below a year earlier and were the lowest since 1986. Unusually cool, wet weather in central California interfered with the production of many vegetables, and the resulting jump in second-quarter prices nearly offset the sharp first quarter decline. Second-quarter prices averaged the third highest on record for that quarter. Shipping-point prices declined seasonally in late June and July, as traditional summer supplies entered the market from a variety of States. Given ample supplies of most all vegetables and melons in 1999, prices received by U.S. commercial vegetable and melon growers were the lowest since 1991. The index of prices received by growers for commercial vegetables (largely fresh-market) decreased 10 percent in 1999 due largely to lower summer and fall-season prices. Shipping-point prices averaged below a year earlier for each of the four quarters of 1999. Cold, wet spring weather brought higher annual average prices for carrots (up 42 percent) and asparagus (up 6 percent) which were outweighed by lower prices (caused by large crops) for tomatoes and onions (each down 26 percent) and broccoli (down 24 percent). The index of retail prices for fresh-market vegetables (including potatoes) declined 3 percent in 1999. Decreases were noted for several major items, including broccoli (down 9 percent), lettuce (11 percent), tomatoes (7 percent), and sweet peppers (8 percent). With much higher energy and fuel costs this spring, retail prices for fresh-market vegetables averaged 3 percent above those of a year earlier during the first six months of 2000. Average retail prices for processed vegetables (frozen, canned, and dried) increased 1 percent during the first six months, largely reflecting increased marketing costs. Processors of five major vegetables (tomatoes, sweet corn, snap beans, green peas, and cucumbers for pickles) expect to contract for 1.37 million acres in 2000--down 2 percent from the comparable producing States of a year ago. Most of the decline will come from tomatoes, with processors contracting for 15 percent fewer acres in an attempt to reduce stocks and strengthen lackluster wholesale prices. Processors also plan to reduce sweet corn contract area, with all of the reduction in freezing (down 7 percent). Contract area is expected to rise for green peas (up 6 percent), cucumbers for pickles (4 percent), and snap beans (3 percent). Assuming average acreage losses and trend yields this coming season, output of the five leading processing vegetables could be 8 to 12 percent lower than a year ago and total around 16 million short tons. As of July 1, the contract portion of the 2000 U.S. processing tomato crop is expected to decline 16 percent from a year earlier-to 10.5 million short tons. Contract output accounts for 98 percent of the tomato crop. Processors are reducing the crop this year because of low wholesale prices and large stocks caused by the record-shattering crop of 12.8 million tons in 1999. The smaller domestic pack and increased exports should help reduce stocks and strengthen wholesale tomato product prices in the coming year. During the first five months of 2000, export volume was up 5 percent from a year earlier, with average value per unit down 5 percent. The first estimate of 2000 contract production for processing green peas indicated a 9-percent increase from a year earlier to 499,920 short tons. Estimated area for harvest was up 6 percent, with acreage up in every major State except Oregon. Recovering from a decline last year, yields are expected to rise 4 percent to 1.76 tons per acre-the second highest on record. Driven by increased wholesale prices over the past year, most of the gain in green pea output will likely be packed as canned product. Green pea production is expected to increase in most major States, including Washington (up 21 percent), Minnesota (12 percent), and Oregon (10 percent). Despite lower acreage, Oregon's production is expected to rise as yields recover from the weather-induced 16 percent drop of a year ago. This summer (largely July-September), fresh-market vegetable and melon area for harvest is forecast to decline 2 percent from a year ago. Lower acreage is a reflection of weak grower prices since last summer. During the summer of 1999, despite a drought in Eastern States, average prices received by growers for fresh-market vegetables and melons remained depressed, as volume from States such as California was large. California, accounting for 50 percent of this year's summer-season area, reduced acreage 3 percent. New York, the second leading summer-season producer, with 11 percent of acreage, expects to harvest 10 percent less area than a year ago due largely to an unusually cool, wet spring which hindered planting. Prospective area was up for carrots (11 percent), cabbage (6 percent), cauliflower (5 percent), honeydew melons (3 percent), and tomatoes (2 percent) but was expected to be the same or lower for other commodities. With area up in California (where yields exceed the national average) and the likelihood of improved yields in Eastern States (hit by drought a year ago), market volume may not be down much from a year earlier. As a result, summer-season fresh-market vegetable prices may only rise modestly from the lows of a year ago. U.S. fall-season potato growers expect to harvest 3 percent more acres in 2000. Increased area for harvest is expected in Minnesota (up 13 percent), Idaho (5 percent), North Dakota (5 percent), and Washington (3 percent). Reduced acreage is expected in New York (down 18 percent), California (6 percent), and Colorado (2 percent). During the March to May period, when most fall-season potatoes were being planted, U.S. shipping-point prices for all potatoes averaged $6.41 per hundredweight, 2 percent above a year ago. Reflecting higher potato prices at planting time, summer-season potato growers expect to increase harvested area 1 percent this year. Although per-acre yields are expected to decline 5 percent from last year's record high, they will still be the second highest on record. With yields down, summer potato production is expected to decline 1 percent. The summer crop typically accounts for close to 4 percent of all potato production, with Texas, Colorado, and California the leading States. This spring, U.S. dry edible bean growers reacted to large stocks, slow exports, and low prices by reducing area for harvest to an estimated 1.65 million acres--down 12 percent from a year earlier and 9 percent below the average of the 1990's. If realized, this would be the smallest area harvested since 1993. Harvested area is expected to be down in most major States, including Colorado (24 percent), Minnesota (18 percent), Nebraska (14 percent), Michigan (11 percent), and North Dakota (9 percent). Acreage in New York is expected to rise 29 percent, reflecting the addition of late spring acreage caused by a rainy spring and slightly more attractive prices for light red kidneys--the State's major bean class. With few exceptions, production is expected to decline for most bean classes, including pinto, navy, Great Northern, and black. U.S. sweet potato growers expect to harvest 93,300 acres this fall-up 12 percent from a year ago and the largest harvested area since 1985. Higher prices over the past season encouraged growers to plant 2 percent more acres this spring. However, area harvested is greater in percentage terms because it is expected to recover from flood losses in the Carolinas last year that reduced harvested area. If crop conditions remain relatively favorable this year, per-acre yields could improve from the weather-reduced lows of the past two seasons and produce the biggest crop since 1985. With stronger production in 2000, sweet potato per capita use is expected to rebound from last year's low (4.0 pounds), perhaps reaching 4.6 pounds. In the Pacific Northwest this year, dry edible green pea production is expected to decline due largely to a reduction of about a fifth in seeded area. In reducing area, dry green pea growers were likely reacting to prices that have averaged as much as 15 percent below a year earlier. Domestic per capita use of dry peas and lentils has been relatively stable over the past 10 years. In 1999, per capita use was estimated at 0.5 pounds-the same as the average of the past decade. In 1999, the United States exported nearly 8 percent of its fresh-market vegetable and melon supplies (production plus imports), the same as during the previous 3 years and up from 7 percent in 1989. On the other side of the ledger, large domestic output and low market prices helped trim U.S. imports to 14 percent of fresh vegetable supplies, compared with 15 percent a year earlier and 10 percent in 1989. With higher prices and reduced stocks, about 7 percent of canned vegetable supplies were exported in 1999--down from 8 percent a year earlier but up from 3 percent in 1989. In 1999, with tomato product prices up due to smaller output in 1998, nearly 11 percent of the vegetables used in canned form were imported compared with 9 percent in both the previous year and in 1989. In 1999, nearly 9 percent of vegetables for freezing (excluding potatoes) were exported-the same as a year earlier but up from 6 percent in 1989. Remaining even with 1998, imports (excluding potatoes) accounted for 10 percent of domestic frozen vegetable consumption last year, with broccoli accounting for 42 percent of frozen vegetable imports. The value of U.S. vegetable exports to China and Hong Kong, combined, (including potatoes, melons, pulses, mushrooms, and vegetable seed) totaled $104 million in 1999, up 4 percent from a year earlier. Six commodities accounted for two-thirds of the vegetables exported to China and Hong Kong. The major items exported were frozen french fries ($26.5 million), potato chips ($18.6 million), lettuce ($8.0 million), celery ($7.4 million), frozen sweet corn ($5.3 million), and canned sweet corn ($4.8 million). The import value from China and Hong Kong rose 1 percent to $143 million, with two-thirds of the total consisting of canned and dehydrated products such as waterchestnuts, dehydrated garlic, and bambooshoots. Printed copies of the Vegetables & 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 via the ERS website at www.ers.usda.gov. END_OF_FILE