HDR1011800401800727951500 VEGETABLES AND SPECIALTIES July 27, 1995 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- VEGETABLES AND SPECIALTIES Situation and Outlook is published twice a year by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. VGS-266. Please note that this release contains only the text of VEGETABLES AND SPECIALTIES--tables and graphics are not included. Subcriptions to the printed version of this report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #VGS, $17/year. ERS-NASS accepts MasterCard and Visa. ----------------------------------------------------------------------------- Vegetables and Specialties Situation and Outlook. Commodity Economics Division, Economic Research Service, U.S. Department of Agriculture, July 1995, VGS-266. Contents Summary Glossary of Specialized Terms List of Tables Situation Coordinator Gary Lucier Voice (202) 219-0117 FAX (202) 219-0042 Principal Contributors Gary Lucier (202) 219-0117 John Love (202) 219-0388 Charles S. Plummer (202) 219-0717 Editor Diane Decker Graphics & Table Design Wynnice Pointer-Napper Layout & Text Design Wynnice Pointer-Napper Approved by the World Agricultural Outlook Board. Summary released July 26, 1995. The summary of the next Vegetables and Specialties Situation and Outlook is scheduled for release on November 16, 1995. Summaries and text of Situation and Outlook reports, including tables, may be accessed electronically; for details, call (202) 720-9045. The Vegetables and Specialties Situation and Outlook is published semi-annually (April and November), and supplemented by a yearbook (July). See back cover for subscription information. Summary In 1994, U.S. vegetable production (including potatoes, sweet potatoes, and dry beans) increased 10 percent from the previous year. While production of fresh-market vegetables and melons increased just 1 percent, output of vegetables for processing (up 22 percent), potatoes (up 7 percent), dry edible beans (up 33 percent), and sweet potatoes (up 21 percent) each increased significantly. The record-large processing vegetable crop of 18.4 million short tons resulted from increased acreage and per acre yields. Production increased for 10 of the 13 processing vegetable crops with declines noted for asparagus, carrots, and cauliflower. Excellent growing weather resulted in record yields and production for processing sweet corn and tomatoes. Low inventories and higher product prices resulting partly from weather-reduced production in 1993 caused processors to increase contract area in 1994. A 37-percent jump in sweet corn output and a 19-percent increase in tomato production accounted for a majority of the gain. Sweet corn growers experienced a soggy season in 1993, but favorable weather in 1994 was reflected in a 26-percent increase in per acre yields to a record 7.23 short tons. Tomato acreage was up 14 percent and yields rose 6 percent. Output also increased for snap beans (up 24 percent), green peas (39 percent), cabbage for kraut (37 percent), and cucumbers for pickles (8 percent). ERS estimates suggest that about 85 percent of the production of the 13 processing vegetables is canned. In early 1995, wholesale prices for processed vegetables averaged just below a year ago. Contract acreage for the five leading processing vegetables (tomatoes, sweet corn, snap beans, green peas, cucumbers) was estimated to have declined 1 percent to 1.51 million acres. Acreage increases for tomatoes, green peas for freezing, and cucumbers for pickles were outweighed by reductions for snap beans and sweet corn. Despite less-than-ideal weather so far this year, per acre yields for most crops may average close to last years strong levels, and total processing output probably will average just below last year's record. The first estimate of 1995 contract production for green peas indicates a 1-percent increase from 1994 to 496,970 short tons, as a 3-percent rise in harvested area outweighs a 2-percent decline in per acre yield. Assuming favorable weather to support a later-than-normal harvest this season, contract tomato production is expected to increase 5 percent to a new record-high, as continued strong yields combine with a 4-percent rise in acreage. In 1994, production of 25 selected fresh-market vegetables and melons (excluding potatoes, dry beans, and sweet potatoes) increased 1 percent to 392 million cwt. Among the major crops, rising per-acre yields lifted production for sweet corn (12 percent), onions (10 percent), bell peppers (9 percent), and watermelon (6 percent). Reduced acreage limited output of tomatoes (up slightly), head lettuce (down 7 percent), leaf lettuce (down 13 percent), and cantaloupes (down 1 percent), while lower per-acre yields in Western states reduced U.S. carrot production 4 percent. Strong domestic demand prompted California garlic growers to increase area 12 percent, which contributed to a 19 percent surge in output. In 1994, U.S. onion production was estimated at 63 million cwt, up 10 percent from a year earlier due to acreage and yield increases. In the mid-1980's, U.S. onion acreage averaged 121,000 acres. Since then, acreage increases have averaged 3 percent per year. Yields have also increased steadily at the rate of 2.5 cwt per acre per year, an average of 2 percent per year. Good weather raised 1994 yields to 394 cwt an acre, up 4 percent from 1993's weather-reduced average of 379 cwt. The summer storage crop (excluding California), which supplies the Nation's onions through the following spring, was up 15 percent from the previous year. Output increased in each of the 10 fresh-market summer storage states. California's summer crop, which goes mainly for processing, fell 5 percent from the record-large 1993 crop as acreage was reduced. U.S. potato production totaled a record 459 million cwt in 1994, up 7 percent from a year earlier. The fall-season potato crop totaled 412 million cwt, 7 percent above the previous year's output. Total harvested acreage rose 5 percent and average yield per acre reached a record for the fourth consecutive year. Shipments of fresh (tablestock) potatoes rose 3 percent during 1994, while movement of chipstock increased 2 percent. Processing use during the 1994/95 marketing season is expected to reach record highs as demand for products such as frozen french fries remains strong. U.S. summer- and fall-season potato growers expect to harvest slightly less area during the fall of 1995. The 1994 sweet potato crop was estimated at 13.4 million cwt, up 21 percent from the previous year. The season-average price was estimated at $14.00 per cwt, compared with $15.10 in 1993. Yields soared to a record 162 cwt per acre, up 17 percent from 1993 and 11 percent greater than the previous high set in 1992. With record yields, North Carolina's output increased 27 percent to 5.3 million cwt, raising the State's share of U.S. production from 38 to 39 percent. Strong yields were also seen in a band of States stretching from Georgia through Louisiana. Louisiana's crop jumped 47 percent to 3 million cwt and accounted for 23 percent of 1994 production--up from 19 percent a year earlier. Production rose 42 percent in Mississippi while California, the third leading producer experienced a 4 percent drop. Although sweet potato acreage is expected up 1 percent in 1995, yields are not expected to match those of a year ago, leaving production down modestly this season. A 14-percent rise in harvested acreage and a 17-percent gain in per-acre yields pushed 1994 dry edible bean production up 33 percent to 29.2 million cwt. Higher grower prices during 1993/94, especially for lima, blackeye, pinto, and Great Northern beans, encouraged more dry bean plantings in 1994 and 1995. In 1995, harvested acreage is expected to increase 6 percent to 1.96 million, and given trend yields, production could range from 2 to 6 percent above the previous year. Trade In 1994, the first year NAFTA was in effect, the United States continued to be a net exporter (in dollar value) of vegetables and melons. Exports increased 10 percent from 1993 to $2.7 billion, while imports rose 9 percent to $2.3 billion. U.S. imports from Mexico rose 6 percent and accounted for about 50 percent of total vegetable and melon imports. Although the United States remains in deficit in fresh vegetable, melon, frozen vegetable, and mushroom trade, substantial trade surpluses continue in canned vegetables, potatoes, dry edible beans and peas, and seed. Fresh vegetable imports (excluding potatoes and mushrooms) totaled $1.1 billion in 1994, up 9 percent from a year earlier. Fresh-tomato import value totaled $344 million, up 6 percent from a year earlier but 9 percent below the 1990 peak. Tomato import volume fell 5 percent to 8.7 million cwt--about 20 percent of total domestic supply. The import share of U.S. supply has been slowly trending downward since the 1970's when imports were about 25 percent of supply. During the first 4 months of 1995, tomato import value totaled 9 percent higher than the same time a year ago In 1994, the United States exported about 9 percent of its fresh-market vegetable supplies (production plus imports), up from 8 percent in 1993 (excludes potatoes). Canada, the leading destination, accounted for 37 percent of U.S. vegetable and melon exports in 1994. This was down from 43 percent in 1993 and reflects lower U.S. vegetable prices, a weak Canadian dollar, and increasing exports to places like Japan. Exports to Japan surged 38 percent to $583 million with about half the increase due to increased sales of potato chips and fresh onions. Notably, the value of vegetables shipped to Russia jumped 235 percent to $11.7 million with fresh potatoes and potato products the leading items. The United States imported about 9 percent of its total fresh vegetable supplies last year, with Mexico the major foreign supplier. Supply for canning and freezing uses is defined as production plus imports and beginning stocks. About 6 percent of canned vegetable supplies were exported, while 2 percent was imported. In 1994, 7 percent of vegetables for freezing (excluding potatoes) was exported. Imports accounted for 9 percent of supply. The United States continued to post a positive net export value for potatoes in 1994. The net value of potato trade (export value minus import value) surged to $410 million, up 46 percent from the previous year. The value of 1994 exports jumped 31 percent to a record $572 million. The value of potato imports increased just 5 percent to $162 million, after jumping 53 percent in 1993. On a fresh-weight-equivalent basis, the volume of all potato exports totaled about 30 million cwt, up 24 percent from 1993. Frozen products accounted for 12.8 million cwt (up 21 percent) while potato chips accounted for nearly 5 million cwt (up 41 percent). For the first 5 months of 1995, export volume and value continued to run well ahead of a year earlier. Per Capita Utilization Per capita use of 56 selected vegetable and melon categories fell 1 percent in 1994 to 425 pounds (farm-weight basis). Reduced use of fresh and processing vegetables outweighed increases in potato and sweet potato use. Per capita use of fresh vegetables (excluding potatoes, pulses, and mushrooms) declined 1 percent to 140 pounds. Declining use (as measured at the farm gate) of lettuce, carrots, and cauliflower outweighed gains for sweet corn, bell peppers, onions, and watermelon. With the increased popularity of various ethnic foods during the 1990's, per capita use of garlic averaged 1.9 pounds during 1993-95, up from 1.1 pounds in 1987-89 and 0.4 pounds in 1970-72. Disappearance of vegetables for freezing and tomatoes for processing also declined in 1994. As a result, use of vegetables for processing declined 3 percent to 127 pounds per person. Per capita use of vegetables for freezing (excluding potatoes) fell 5 percent to 22 pounds due to lower use of sweet corn, carrots, and miscellaneous commodities. With production increasing, per capita use of sweet potatoes in 1994 rebounded from the previous year's low to 4.7 pounds per person. Based on preliminary data, per capita use of potatoes in all forms rose nearly 3 percent in 1994 to 141 pounds. This was the sixth consecutive annual increase in potato use and was the largest per capita use of potatoes since 1935. Most of the gain was due to the second consecutive surge in potatoes for freezing, particularly french fries. Potatoes destined for manufacture into frozen products account for more than one-third of all potatoes produced. Use of fresh-market potatoes has grown slowly for each of the past 4 years and now stands at 50 pounds per person--up 9 percent from the low of 1990. Overall potato use is forecast to stabilize in 1995 as production is expected to fall slightly. With slightly smaller production, french fry use is expected to peak, and fresh use could fall slightly. Per capita use of dry edible beans totaled 7.5 pounds in 1994, up 1 percent from a year earlier. Pinto beans accounted for nearly half of the U.S. total at 3.6 pounds per person (the same as a year earlier), followed by navy beans with 19 percent at 1.4 pounds per person (up 17 percent). Red kidney beans (0.5 pounds) and Great Northern beans (0.4 pounds) are the next most popular dry bean classes. Prices and Value In 1994, retail prices for fresh-market vegetables (excluding potatoes) averaged 2 percent above those of a year earlier. Higher average retail prices for potatoes, tomatoes, and carrots outweighed lower average prices for lettuce, celery, and cabbage. In 1995, retail prices for fresh-market sales will likely increase, mirroring the increase expected in grower prices. During the first half of 1995, vegetable supplies and prices were subject to more variation than usual due to storms in Florida and California. Tropical storm Gordon brought heavy rains and gusty winds to southern and central Florida in mid-November 1994. Vegetables from these areas were damaged, causing prices for cucumbers, peppers, and tomatoes (among others) to increase. Heavy rain in Dade County damaged vegetables planted for winter-season harvest. Supply gaps for some items developed during early 1995 with prices moving well above the average for the previous 3 years. Then, in mid-March, unusually heavy rain directly affected the prime vegetable growing areas in central and northern California. While heavy storms in January missed the major desert vegetable growing areas, the March storms severely reduced vegetable supplies and caused grower and retail prices for many vegetables to rise during late March to early June. With iceberg lettuce supplies limited in early May, shipping-point prices briefly exceeded $40 per 24-head carton. Retail prices for processed vegetables rose 4 percent in 1994, as frozen vegetables increased 4 percent and canned vegetables rose 5 percent. Wholesale prices for dehydrated vegetables (largely potatoes and onions) fell 1 percent. With ample supplies of commodities such as potatoes and onions, prices for dehydrated vegetables have averaged below trend (1975-94) for the past 3 years. In 1995, retail prices for all processed vegetables are expected to increase 1 to 3 percent, as stronger inventories (compared with a year earlier) keep a lid on price increases through the fall when new-crop packs become available. The preliminary 1994/95 season-average price received for all potatoes was estimated at $5.36 per cwt, down 14 percent from 1993/94. With a record-large fall crop, the 1994/95 season-average price for fresh-market potatoes was estimated at $6.64, down 18 percent from 1993/94. The processing price averaged $4.66 per cwt, down 8 percent. After five consecutive increases, the 1995 potato crop is projected to be slightly smaller than a year earlier with poor weather early in the season expected to lead to lower average yields. With output reduced, the season-average price for all potatoes is expected to average above a year earlier. Given this scenario, consumers can expect slightly higher fresh potato prices this fall and into next spring. With output falling, grower prices (measured at the point of first sale) for all sales of agaricus mushrooms in 1993/94 increased 6 percent from a year earlier. Mushroom production declined 3 percent with processing (down 8 percent) accounting for most of the drop. Prices for fresh-market sales rose 3 percent from the previous season to $1.03 per pound, while processing prices jumped 14 percent to $0.662 per pound. However, for the second consecutive year, prices for Shiitake (down 5 percent) and Oyster mushrooms (down 3 percent) declined as specialty output (76 percent) exceeded growth in demand. The value of production for fresh market and processing vegetables, potatoes, sweet potatoes, pulses, and mushrooms declined 3 percent in 1994 to $11.8 billion. The value of the 25 major fresh market vegetables and melons fell 9 percent to $6.2 billion while the 9 leading processing vegetables jumped 21 percent to $1.6 billion. Increases in fresh market value of garlic (up 55 percent), lima beans (33 percent), and broccoli (21 percent) were outweighed by reduced value for leaf lettuce (down 28 percent), onions (26 percent), iceberg lettuce (25 percent), and celery (22 percent). Lower prices were responsible for most of the drop in fresh-market crop value. Processing green peas (up 41 percent), sweet corn (30 percent), and tomatoes (up 23 percent) led the way as every major processing crop increased in value in 1994. With prices the same or lower than a year ago, larger production led to increased crop value for sweet potatoes (up 19 percent to $198 million) and dry edible beans (17 percent). Specialties Based on available reports, the volume of selected specialty vegetable shipments declined in 1994, for the first time since 1984. Specialty vegetable supplies fell from the previous year as both domestic and import shipments declined. The domestic share of the specialty vegetable market (now around 64 percent) continued to erode. Shipments were down across most specialty categories with the exception of tropical vegetables (such as dasheens and yams) and chile peppers. Glossary of Specialized Terms Fresh-market vegetables: Sold primarily as fresh; includes artichokes, asparagus, green lima beans, snap beans, broccoli, brussels sprouts, cabbage, cantaloupes, carrots, cauliflower, celery, sweet corn, cucumbers, eggplant, escarole and endive, garlic, radishes, honeydews, lettuce, onions, bell peppers, spinach, tomatoes, and watermelons. Dual-purpose vegetables: Commodities that may be sold in fresh or processing markets. Dual commodities include asparagus, broccoli, carrots, cauliflower, and celery. Processing vegetables: Commodity sold primarily to processors; includes (but not limited to) green lima beans, snap beans, beets, cabbage, sweet corn, cucumbers, chile peppers, green peas, spinach, and tomatoes. Shipments: Quantity of produce marketed from major production areas. Arrivals: Quantity of produce received by wholesalers and chain stores in selected cities, as shipped from major production areas. Season-average price: Average price received by the grower-packer (grower-shipper), weighted by quantity marketed. F.o.b. shipping point price: The average, unweighted unit price received by the shipper or grower-shipper primarily for sales in carload or truckload quantities, but also including mixed loads. Marketing spread: The difference between the retail price and the grower-packer return. Grower-packer return: Price received by the grower-packer. Contract acreage: Area planted by agreement between processors and growers, generally at an agreed price and conditions, including quality. Winter season: Production period which mainly spans January to March. Spring season: Production period which mainly spans April to June. Summer season: Production period which mainly spans July to September. Fall season: Production period which mainly spans October to December. Pulses: A term used collectively for dry edible beans, dry edible peas, and lentils. Cwt: Abbreviation for hundredweight, a unit of measure equal to 100 pounds. Short ton: A unit of measure equal to 2,000 pounds. A metric ton is equal 1,000 kilograms or 2,204.62 pounds. Farm weight: The raw or unprocessed weight of a product in fresh form prior to any processing; also called fresh-weight, field-run, or orchard-run. Product weight: The weight of a product in its final packaged form. For example, the weight of the contents of a can of tomato paste. Pay weight: The weight of useable product delivered to the processing plant and paid for at the rates specified by contract. Cash receipts: The value of commodity marketings during the calendar year, irrespective of the year of production. For program crops, also includes net CCC loans (there are none for vegetables or potatoes). Value of production: The value of commodities produced during the crop year. Calculated as production times marketing-year-average price. May be equal to cash receipts when the crop year for a vegetable runs from January through December. Per capita use: A measure of commodity disappearance on a per person basis. Equal to total supply (production plus imports plus beginning stocks) less uses (exports, shrink and loss, seed use, ending stocks) divided by total U.S. population (including military). Constant 1987 dollars: Expression of value in terms of 1987 purchasing power. Frequently referred to as deflated or real dollars. Pack: The quantity of fresh or processed product placed in containers (e.g., cans). Generally refers to the output of a processing industry (e.g., frozen pack of broccoli). Carryover stocks: The quantity of product remaining in storage at the end of the crop year. Cold storage: The quantity of product in refrigerated warehouses at a point in time. Specialties: A term for commodities (limited here to vegetables) not generally considered to be mainstream. Examples include jicama, dasheen, and cassava. May also include "minor vegetables", such as okra, chile peppers, pumpkins, and tropical vegetables. END-END-END