VEGETABLES AND SPECIALTIES--SUMMARY November 14, 1996 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. ------------------------------------------------------------------------------ Record Potato Crop Brings Lower Prices, Increased Use The first estimate of the U.S. fall potato production is 448 million hundredweight (cwt), up 11 percent from last year, and 5 percent above the previous record set in 1994. Increased harvested acreage (up 3 percent from last fall) and record high yields (up 7 percent to 359 cwt per acre) combined to produce the fifth record fall crop in the last 6 years. With abundant supplies, both grower and retail potato prices are expected to average well below a year earlier. Since potatoes are the most heavily weighted item in the consumer price index (CPI) for fresh vegetables, lower potato prices are expected to be an important moderating influence on retail vegetable prices well into the coming year. Fresh vegetable retail prices are expected to increase 2 to 4 percent in 1997 after declining in 1996. Per capita use of fresh potatoes may decline to around 49 pounds in 1996 as a result of the smaller 1995 fall crop and lower fresh utilization in the 1995/96 marketing season. However, fresh use will likely rebound in 1997 to around 51 pounds per person with the record 1996 potato crop and lower retail potato prices. Fresh potatoes account for about 25 percent of total fresh vegetable use in the United States. After a summer of strong production and weak prices for many fresh-market vegetables and melons, reduced fall fresh vegetable acreage is expected to lead to slightly lower supplies and stable to somewhat higher retail prices going into the winter quarter. Fall (primarily October to December) acreage for harvest for the major fresh vegetables and melons was estimated to be 2 percent less than a year ago but 6 percent larger than 2 years ago. Most of the decline occurred in Florida, where growers cut fall area 10 percent to 40,400 acres. California, which accounts for 59 percent of fall vegetable and melon acreage, increased area 1 percent to 114,100 acres. Preliminary data indicate that fresh tomato supplies were largely unchanged during the first 3 quarters of 1996 compared with a year ago. A drop in domestic output (as indicated by reduced shipments) was offset by larger imports. With exports little changed, per capita domestic use averaged about the same as a year ago. During the current fall season, tomato acreage for harvest in the major producing States is estimated at 24,400 acres, 16 percent less than a year ago. Average yields would suggest smaller supplies from domestic sources this fall, especially from Florida where acreage is down 27 percent. This large reduction in Florida's acreage has been associated with strong competition from extended shelf life, vine-ripe, and greenhouse/hydroponic imports. About half of fall tomato area is in California, where acreage is expected to increase 4 percent this fall. In 1996, vegetable and melon (including potatoes, pulses, and mushrooms) grower cash receipts are expected to decline. Most of the decline likely occurred on the fresh-market side as lower average grower prices outweighed slightly larger volume. Higher returns are expected for processing vegetables, pulses, and mushrooms. In 1995, grower receipts jumped 8 percent to a record high $14.8 billion powered by improved returns for lettuce, potatoes, carrots, and melons. This was the fifth consecutive annual increase in nominal dollar grower receipts. Vegetables and melons accounted for 15 percent of U.S. 1995 crop cash receipts, the same as a year earlier. Production of the four major processing vegetables rose about 3 percent this year, with the processing tomato crop near a record high. With U.S. tomato product prices down and supplies from several other countries short, export opportunities should remain strong through next season. Wholesale prices for canned vegetables averaged 5 percent above a year earlier through the first 3 quarters of 1996 and, with the exception of tomato products, are likely to remain above a year earlier through next spring. On the other hand, frozen vegetable stocks are adequate and prices have remained just above year-earlier levels and will likely remain flat into next spring. In 1996, U.S. sweet potato acreage for harvest is estimated to increase 3 percent. This is the third consecutive annual acreage increase, an event that has not happened since 1932. The season-average grower price has remained over $14 per cwt for 3 consecutive years, and the estimated value of the sweet potato crop was $204 million in 1995, the highest nominal dollar value on record. Shipping point prices in late October 1996 were running near year-earlier levels. Per-acre yields the past 2 years have been above trend (1970-95), and crop conditions were termed average for most of the current season. Thus, if trend yields are assumed (152 cwt per acre) in 1996, production would increase only 2 percent from a year earlier and sweet potato prices would likely again average at or above $14 per cwt. This would likely lead to a fourth consecutive increase in acreage during 1997. During the 1996/97 season, the U.S. dry edible bean market is characterized by a 13-percent smaller crop, reduced stocks, and higher prices. Total 1996 dry bean production is estimated at 27.0 million cwt. Lower production of navy, pinto, and black beans is likely and will outweigh larger output of Great Northern, red kidney, and garbanzo beans. North Dakota is again the leading producer of dry beans with 26 percent of the crop. Looking ahead, with reduced output and lower stocks this year, prices will likely rise through 1997 and signal increased area and production in 1997. Total volume of mushroom sales in the United States during the 1995/96 production year (July 1-June 30) totaled 787 million pounds, down fractionally from the previous year's record of 789 million pounds. Total value of mushroom sales decreased slightly to $758 million. Growers received an average of 96.3 cents per pound, unchanged from the previous season. The number of growers continued to fall as the count for 1995/96 decreased to 357, down from 371 last season. This issue of the Vegetables and Specialties Situation and Outlook report contains a special article entitled U.S. Share of Asian Fruit and Vegetable Import Markets. Printed copies of the Vegetables and Specialties report will be available in about a week. For more information contact Gary Lucier (202) 219-0117; glucier@econ.ag.gov or John Love (202) 219-1268. The text of the report will also be available electronically. For details, call (202) 219-0515. END_OF_FILE