VEGETABLES AND SPECIALTIES -- SUMMARY April 24, 1998 April 1998, VGS-274 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 the report will be available 1-2 weeks following this summary release. --------------------------------------------------------------------------- Fresh Vegetable Per Capita Use Rises 4 Percent in 1997 Per capita use of fresh vegetables (excluding potatoes) increased 4 percent from a year earlier to 161 pounds in 1997. Record-high per capita use was experienced in several fresh-market vegetables, including carrots, cucumbers, romaine/leaf lettuce, cantaloupe, and tomatoes. Per capita use also remained strong for onions, peppers, cabbage, and garlic. In the 1990's, per capita use of fresh- market carrots has averaged 33 percent above the average of the 1980's. In 1997, per capita use of fresh carrots totaled 12.5 pounds, eclipsing the previous record set in the mid-1940's. Fresh-market carrot consumption is projected to increase again in 1998. Per capita use of all vegetables for processing (on a fresh-equivalent basis) declined 2 percent to 126.4 pounds in 1997. Canning vegetable use declined 1 percent to 103.9 pounds, led by lower use of tomatoes and sweet corn. Per capita use of vegetables for freezing (excluding potatoes) declined 4 percent to 22.5 pounds in 1997, as use of all commodities, with the exception of green peas, declined. This spring (primarily April to June), U.S. growers are likely to harvest 1 percent more acreage of fresh-market vegetables and melons than last year. Increased area in States, such as Florida (up 4 percent) and Texas (up 8 percent), outweighed a decline in California (down 1 percent). California accounts for 42 percent of spring vegetable area, followed by Florida with 24 percent. For consumers, increased spring-season vegetable acreage is not expected to translate into lower vegetable and melon prices. This winter, record-setting precipitation in the Salinas Valley, and heavy rains, winds, and cool temperatures in Florida, upset growers' spring-season planting schedules, while also slowing crop growth and affecting the quality of some items. As a result, several intermittent gaps in fresh vegetable supplies this spring will generally leave fresh vegetable retail prices well above year-earlier levels. The Asian financial crisis, economic recession, and associated currency devaluations have been a concern to the U.S. vegetable industry this year. Within the vegetable and melon sector, the processed vegetable industry has more at stake in the crisis than the fresh-market industry. U.S. exports of frozen vegetables, particularly french fries, are heavily concentrated in this part of the world. Over 60 percent of U.S. frozen vegetable exports (including potatoes) are shipped to Japan, South Korea, and four major Southeast Asian nations (Indonesia, the Philippines, Malaysia, and Thailand). In addition, 25 percent of dehydrated vegetables, and 23 percent of canned vegetable exports are sold to these nations. In total, the value of U.S. processed vegetable trade to these nations exceeds $500 million. On the fresh side of the market, Japan, South Korea, and the four major Southeast Asian countries together accounted for just 13 percent of U.S. fresh vegetable and melon export value in 1997. Processors of five selected vegetables (tomatoes, sweet corn, snap beans, green peas, and cucumbers) expect to contract for 1.4 million acres in 1998--up 3 percent from a year earlier. This increase largely reflects a combination of stronger processing tomato prices and the lack of attractive crop alternatives. Canneries and freezing firms each expect to increase contract area 3 percent. With the exception of green peas for canning (down 1 percent), processors expect to increase or maintain acreage for most of the major vegetables (both canning and freezing). Given average acreage losses and trend yields this coming season, output of the five leading processing vegetables could be 2 to 4 percent above last year and approach 16 million short tons. With March 1 processing tomato inventories 19 percent below a year earlier, wholesale tomato product prices remain firm. Prices are generally higher than a year earlier for most products, including sauces, ketchup, and paste. Some uncertainty surrounds this year's crop because of wet weather, planting delays, and the possibility of processors having to run later in the season when fall rains add the risk of a premature end to the season. The Economic Research Service projects potato planted acreage for 1998 (all seasons) to be between 1 percent below and 1 percent above last year. If little change in planted acreage is realized, recent-trend yields and average acreage abandonment would lead to total production for 1998 (all seasons) of about 460 million hundredweight. With record production in Canada and a return to average production in Europe during the fall of 1997, competition for export markets for potatoes and potato products will likely remain tight throughout much of 1998. Tight export markets in East and Southeast Asia are also likely to continue due to the economic crisis in several countries in the region. During the 6-month period ending in February 1998, U.S. french fry export volume to those regions was up just 3 percent from a year earlier. The anticipation of substantial purchases by Mexico this year injected optimism into some areas of the dry bean market. As a result, U.S. dry bean growers intend to plant 1.94 million acres in 1998--up 5 percent from a year ago and 1 percent more than the average of the 1990's. Most of the indicated gain is in North Dakota and Minnesota. In Michigan, where acreage is down 5 percent, heavy stocks and low prices for navy beans are forcing some growers to plant more economically attractive classes, such as black beans, or to consider alternative crops like soybeans. U.S. dry bean grower prices for the first 7 months of the 1997/98 marketing year averaged an estimated 25 percent below a year earlier. Imports of mushrooms for all uses increased in 1997 to nearly 164 million pounds compared with 153 million in 1996 and 174 million in 1995, the highest on record. The fresh or chilled category continued to rise, reaching 15 million pounds last year compared with 9.6 million in 1996. The sliced category also continues to trend upward as imports exceeded 30 million pounds last year. China, India, Indonesia, and Mexico supply most of the sliced mushrooms imported by the United States. Printed copies of the Vegetables and Specialties Situation and Outlook report will be available in about a week. For more information contact Gary Lucier, 202-694-5253 or Charles Plummer, 202-694-5256. This issue contains two special articles. The first is "Food Safety and Fresh Fruits and Vegetables: Is There a Difference Between Imported and Domestically Produced Products?" and the second is "Marketing Winter Vegetables from Mexico." END_OF_FILE