VEGETABLES AND SPECIALTIES--SUMMARY April 24, 1997 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 (VGS-271), and .WK1 data files, will be available about a week following release of this summary. ============================================================================== Per Capita Vegetable Use Rises 2 Percent in 1996 The first estimate of 1996 per capita vegetable and melon use is 441 pounds--up 2 percent from a year earlier. Most of the gain originated in the fresh market where prices were lower and supply stronger. Fresh vegetable and melon use (excluding potatoes) increased 5 percent from a year earlier to 153 pounds per person--the highest since the mid-1940's. Increased fresh use was widespread in 1996 with use of watermelon, cantaloup, carrots, bell peppers, and sweet corn accounting for most of the gain. This spring (primarily April to June), U.S. growers are likely to harvest 3 percent fewer acres of fresh market vegetables and melons than last year. This spring-season acreage includes a decline of 4 percent for the 13 selected fresh-market vegetables, a downturn of 3 percent for melon crops, an increase of 2 percent for asparagus, and a cut of 3 percent in onion acreage. Among these 18 crops, only four are expected to show acreage increases--asparagus, snap beans, head lettuce, and cantaloup. Lettuce acreage increased 5 percent as growers responded to high prices while the crop was being planted this winter (spring lettuce can take 3 months or more to mature). Snap bean area rose 9 percent, also in response to higher prices this winter following the January freeze in Florida, with all freeze- killed area replanted. Per capita use of fresh-market snap beans has been increasing during the 1990's, reaching 1.7 pounds in 1995 after bottoming out at 1.1 to 1.2 pounds in the 1980's and early 1990's. In 1996, the value of U.S. vegetable and melon exports (including pulses and seed) fell 2 percent to $2.8 billion as volume increased less than 1 percent compared with 1995. Export volume was expected to increase more, with average export prices dropping 8 percent in 1996. While the value of canned and frozen exports increased, fresh vegetables and melons declined as prices fell. The value of U.S. vegetable and melon imports rose 12 percent. With the exception of mushrooms, all categories increased in 1996 and most continued to rise through early 1997. Contract acreage for the five leading processing vegetables (tomatoes, sweet corn, snap beans, green peas, and cucumbers) is expected to decline 3 percent to 1.35 million acres in 1997. This drop comes after a 9-percent decline in planted acreage a year earlier. While green pea area is expected to increase, acreage for tomatoes, sweet corn, snap beans, and cucumbers for pickles is expected to decline. With higher wholesale prices for sweet corn, snap beans, and green peas since last fall, frozen vegetable processors expect to contract for 11 percent more acres in 1997. Green pea acreage for freezing is expected to jump 34 percent as processors seek to replenish stocks drawn down to the lowest levels since 1989. As a result of strong supplies in the face of stable demand, wholesale prices for canned and frozen vegetables during the first quarter of 1997 each averaged just 1 percent higher than a year ago. Prices also rose 2 percent for dried and dehydrated vegetables. In 1997, U.S. tomato processors are expected to contract for 10.3 million short tons of tomatoes from 300,360 acres. Contract production is expected to be down 9 percent from a year ago and reflects lower wholesale prices for tomato products over the past year. Wholesale prices have been depressed by record- large stocks resulting from large packs the past few years. Also, domestic use has apparently slowed recently with most of the growth in use coming from export demand. Exports now account for close to 6 percent of total domestic supply (production plus imports plus beginning stocks)--up from 2 percent in 1990. Domestic use is estimated at just under 10 million short tons (fresh- weight basis) for calendar 1996. The first estimate of the 1997 spring potato crop was 22.5 million cwt--up slightly from a year earlier. The increase came despite a 5-percent decrease in harvested area, attributed to high stocks of fall potatoes and low overall grower prices. Spring-season yield forecasts were up nearly 6 percent from last year, with nearly all producing areas realizing gains. Due to the record-large potato crop last fall, grower prices for all potatoes during the September to February period averaged 29 percent below year-earlier levels. Fresh-market potato prices averaged 50 percent below a year ago, while contracts with processors have prevented a similar plummet for processing potatoes (down 7 percent). Despite a strong crop in the fall of 1995, overall U.S. exports of potatoes and potato products (on a fresh-weight basis) in calendar year 1996 declined from 1995 levels, while imports rose. Slight gains in fresh and frozen potato exports were offset by declines in potato chips and dehydrated products. Higher U.S. grower prices during calendar year 1996 combined with strong output in Canada and improved production in Europe to negatively impact U.S. potato trade flow. Although potato export volume was down nearly 7 percent, higher prices helped minimize the decline in total export value. Potato exports were valued at $612 million (down 1 percent from 1995), while imports were valued at $242 million (up 34 percent). With reduced domestic output and lower world stocks, dry bean prices are expected to average above a year earlier and provide growers the signal to increase acreage. Preliminary surveys indicate that dry bean growers expect to increase area 6 percent to 1.9 million acres in 1997. The traditional signals to increase area and production were rather weak this year. This weakness stems from the prevalence of relatively strong prices for competing grains (especially wheat and soybeans), lower prices for two major bean classes (navy and Great Northern), and moderately high domestic stocks for several classes. Printed copies of the Vegetables and Specialties Situation and Outlook Report will be available in about 2 weeks. This issue contains two special articles. The first is titled "Organically Grown Vegetables: U.S. Acreage and Markets Expand During the 1990's" and the second is called "U.S. Imports of Mexican Winter Vegetables Under NAFTA." For more information, contact Gary Lucier (202) 219-0117. END_OF_FILE