VEGETABLES AND SPECIALTIES--SUMMARY April 26, 1995 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 is available 2-3 working days following release of this summary. ----------------------------------------------------------------------------- Fresh Vegetable Acreage Down, Prices Up U.S. growers are expected to harvest fewer acres of fresh-market vegetables during first-half 1995 than a year earlier. Growers' restraint in planting and a series of rain storms in Florida and California restricted domestic production during January-March. Unusually heavy rains caused flooding in central California during mid-March, a transition period for the west coast winter vegetable harvest. Just when lettuce, broccoli, and cauliflower production was moving northward out of Arizona and southern California, flooding in central California led to shortages and higher prices in late March and April. Retail prices for most vegetables are expected to remain higher than usual through at least mid-May. Fresh-market vegetable growers had incentive to cut back production in first-half 1995. The market for fresh vegetables suffered from weaker demand and low prices during much of 1994. However, grower prices have improved since fall 1994, when acreage cutbacks and adverse growing conditions reduced supplies. The current high-priced market may encourage growers who faced sluggish prices a year ago to expand area for harvest in the 1995 summer season. Summer area for harvest is the largest of the four seasons in U.S. production. The season's area has trended down slightly from 501,500 acres in 1992 to 482,750 in 1994. U.S. fresh-market vegetable exports (including melons) outstripped expectations for fourth-quarter 1994, and January-February 1995 exports signal another big quarter to start the year. Fresh vegetable exports in fourth-quarter 1994 were valued at $291 million, up 41 percent from a year earlier. Volume increased 36 percent to over 1 billion pounds, the first time that fourth-quarter volume exceeded that level. Big gains were seen across the board. Several standouts include onions (up 200 percent in value), lettuce (up 58 percent), celery (31 percent), broccoli and cauliflower (26 percent), and tomatoes (18 percent). With wholesale prices for processed vegetables averaging just below a year ago, contract acreage for the five leading processing vegetables (tomatoes, sweet corn, snap beans, green peas, cucumbers) is expected to increase less than 1 percent to 1.526 million acres in 1995. The increase follows a 13-percent jump a year earlier. Acreage increases for tomatoes, green peas, cucumbers, and snap beans for freezing outweighed reductions for snap beans for canning and sweet corn for canning and freezing. If yields follow trend this coming season, total processing output could approach last year's record. Among the major States, acreage will likely be down 1 percent in Minnesota, 10 percent in Wisconsin, and 2 percent in Michigan. Acreage increased in California (5 percent) and Washington (4 percent). Tomato processors and growers are expected to contract for 4 percent more tomatoes this season. Despite some flooded fields at the time of normal planting, this year's increase follows a 19-percent gain a year ago. With expansion in processing capacity this year, production in California (which accounts for 93 percent of the processing tomato crop) is expected to increase 5 percent to a record high. However, output is expected to be lower in most other States, including Ohio (down 14 percent) and Indiana (down 11 percent). U.S. fall potato acreage is likely to decline only slightly this year despite sharply lower potato prices in many States in 1994/95. However, in Idaho, which accounts for about a third of the crop, average prices have not changed much from their low year-ago levels. In addition, there will be little change in contract returns for 1995/96 processing potatoes in most States. Although grower prices are much lower, record-large fall potato crops in each of the last 4 years have meant continued relatively favorable prices for consumers. Retail prices for all types of fresh (tablestock) potatoes averaged 9 percent below a year ago during first-quarter 1995. Retail prices will likely remain below those of 1994 until the new fall crop harvest begins in September. Dry edible bean producers say they intend to plant 2 percent more acres this year than in 1994. The slight increase follows last year's production of 29.2 million cwt, the largest since 1991 and 33 percent higher than 1993. After relatively low production in 1992 and 1993, large production in 1994 and 1995 could generate higher stocks. However, annual domestic per capita use is strong at around 7.5 pounds and export volume was up 48 percent from a year earlier during October-February 1994/95. If domestic and export demand falter, another year of solid production could weaken prices in 1995/96. This issue of the Vegetables and Specialties Situation and Outlook Report contains a special article entitled "U.S. Horticulture's Long Run Economic Outlook". Printed copies of the Vegetables and Specialties Situation and Outlook will be available in about a week. For more information, contact Gary Lucier (202) 219-0117 or John Love (202) 219-0388. The ERS AutoFAX also carries selected text and data (Call 1-202-219-1107 or 1-202-219-0296 and follow the voice prompts. The directory number for specialty agriculture is 2501). END-END-END