VEGETABLES AND SPECIALTIES November 20, 2001 November 2001, ERS-VGS-287 Approved by the World Agricultural Outlook Board -------------------------------------------------------------------------- VEGETABLES AND SPECIALTIES is published three times a year (includes yearbook) by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. This release contains only the text of the report -- tables and graphics are not included. See supplemental data files in Lotus 123 (.WK1) format. Subscriptions to the printed version of the report are available from the USDA order desk. Call, toll-free, 1-800-999-6779 and ask for stock #SUB-VGS-4039, $30/year. ERS-NASS accepts MasterCard and Visa. -------------------------------------------------------------------------- Contents Summary Fresh Market Vegetables Processing Vegetables Potatoes Sweet Potatoes Dry Edible Beans Mushrooms Special Article Factors Affecting Watermelon Consumption in the United States Situation Coordinator Gary Lucier Voice: (202) 694-5253 FAX: (202) 694-5820 E-mail: GLucier@ers.usda.gov Statistical Assistant Brenda Toland Principal Contributors Gary Lucier (202) 694-5253 Charles S. Plummer (potatoes & sweet potatoes) (202) 694-5256 Editor Martha R. Evans Graphics, Table Design, and Layout Wynnice P. Napper Approved by the World Agricultural Outlook Board. Summary released November 15, 2001. This is the final issue of the Vegetables and Specialties Situation and Outlook Report. It has been replaced by the Vegetables and Melons Outlook newsletter released every other month electronically on the ERS web site. The first issue of this newsletter (VGS-285) was issued in August and the second (VGS-286) was released in October. The next issue (VGS-288) is scheduled for release on December 14, 2001. Reports are accessed electronically; for details, call (202) 694-5050 The Vegetables and Melons Outlook is released bi-monthly (February, April, June, August, October, December) and supplemented by a yearbook (July). The yearbook will continue to be available in printed and electronic formats. The web link to the Vegetables and Melons Outlook is: http://www.ers.usda.gov/publications/vgs/ To subscribe to this report or any other ERS publication, please visit the following web link: http://www.ers.usda.gov/updates/ Summary The first estimate of U.S. fall-season potato production is 401 million hundredweight (cwt), down 14 percent from last year and the lowest since the fall of 1993. The decline is due to an 8-percent decrease in harvested area and 6-percent drop in yields from a year ago. Production was down in all major growing areas, as growers reduced acreage in reaction to last years low grower prices. The reduced fall-season crop combined with smaller harvests this past winter, spring, and summer, puts total production for 2001 at 442 million cwt, 14 percent below the record 514 million cwt produced in 2000. Such a large decline in production will put strong upward pressure on grower prices for the 2001/02 marketing season. This fall (largely October-December), fresh-market vegetable and melon area for harvest is forecast to rise 4 percent from a year ago. Fall area is forecast the same or higher for all items but cucumbers and watermelons. The largest gains were for sweet corn (up 24 percent) and honeydew melons (up 23 percent). Increases in shipments of sweet corn will likely not match the rise in area, with yields in California expected to be lower due to increased pest pressure. With normal weather, supplies should be more than adequate to meet expected lackluster demand. Given acreage, current weather, and yield trends, potential fall-season fresh vegetable and melon shipments could be 1 to 4 percent greater than a year ago. While potential supplies could be up, demand appears to have softened over the past few months, largely due to the weaker economy. As a result, fall- quarter grower prices are expected to remain below year-earlier levels. The Economic Research Service forecast for the winter 2002 season (January-March) suggests fresh-market vegetable acreage will rise slightly from a year earlier. The impact of weak prices this fall and slower economic activity (reducing foodservice demand) is expected to be offset by the effect of last winters record-high prices. Last winter, shippers cut area 2 percent following the price-reducing effects of excess supplies in the winter of 1999/2000. This winter, average weather could allow market shipments to increase modestly from a year ago. The added volume could keep fresh vegetable shipping-point prices below the highs experienced a year earlier. In terms of both farm value and per capita consumption, onions are one of the top five vegetables in the United States. Given expected higher prices for the 2001/02 crop, the farm value could equal or exceed that of a year ago, but remain well below the 1998 record of $838 million. Between $50 and $70 million of onion crop value will consist of processing onions, with the remainder reflecting fresh- market production. The shipping-point price for fresh-market onions in September averaged 23 percent above the previous year. However, prices declined seasonally in October, averaging just 2 percent above a year earlier. The steep drop in prices reflected a bulge in supply caused by seasonal harvest volume and also a reduction in demand (largely in the foodservice sector and export market) reflecting a weakening global economy. The value of fresh-market vegetable and melon imports (excluding potatoes) was up 21 percent from a year ago during the first 8 months of 2001 (Jan.-Aug.). Much of the increase occurred during the first quarter. Tomatoes alone accounted for about one-third of the increase through August--the value of tomato imports rose 26 percent during the first 8 months. Bell peppers (up $75 million), onions (up $29 million), squash (up $28 million), and cucumbers (up $23 million) accounted for the lions share of the remaining increase. Contract production for the four major vegetables for processing (tomatoes, sweet corn, snap beans, and green peas) is expected to decline 10 percent from a year ago to 13.6 million short tons. Production was lower than a year ago for each crop, with green pea output down the most (29 percent). Seeking to reduce inventories and prop up weak wholesale prices, processors planned to reduce output this year by cutting area for harvest 9 percent. Production was curtailed further as yield for each crop was reduced by a cool, wet spring and a hot, dry summer. Domestic output of sweet corn for processing was forecast to decline 4 percent from a year earlier to 3.04 million short tons. Harvested area was down 3 percent and the estimated per-acre yield averaged 1 percent less than a year earlier. Yields were up in most States, with the exception of New York and Minnesota where dry weather impacted maturity and sizing. According to the California Processing Tomato Advisory Board, 8.64 million short tons of tomatoes were processed this season--down 16 percent from a year earlier. The harvest of California processing tomatoes in October generally brings a price premium to the grower due to the heightened risk of crop failure. Such late-season volume can account for as little as 3 percent of the total crop (as in 1998 and 2000) or in the case of the record-large 1999 crop, 14 percent of output. This year, California tomato processors packed 8 percent of the crop after September 30. Other States are expected to process about 0.5 million tons--about the same size as Canadas crop. With supplies trimmed, wholesale tomato product prices are expected to rise this fall and continue above year-earlier levels into 2002. U.S. sweet potato growers expect to harvest 93,100 acres this fall, down 2 percent from a year ago. North Carolina and Louisiana, the top sweet potato-producing States, are each expected to harvest 1,000 acres less than last year. Acreage is also down slightly or the same as a year ago in most other States, with the notable exception of Mississippi, where harvested area is expected to be 14,800 acres--20 percent higher than in 2000. Reduced output is expected for most dry bean classes, including pinto, navy, black, Great Northern, red kidney, cranberry, and lima beans (official estimates will be available on December 11). These smaller crops should result in substantial reductions in elevator and warehouse stocks over the course of the 2001/02 marketing year. As a result, aggregate dry bean prices are expected to rise through mid- 2002. With much improved grower prices during the 2001/02 marketing year, area planted to dry beans is expected to increase 25 to 30 percent in the spring of 2002. Use of all mushrooms totaled 1.15 billion pounds in 2000/01 (fresh- weight basis)--up from 930 million pounds in 1990 and 625 million in 1980. Nearly all the gain in total mushroom demand since 1990 has been the result of rising fresh use. Fresh use totaled 727 million pounds in 2000--up 4 percent from a year earlier. On a per-capita basis, fresh use rose nearly 4 percent from a year earlier to 2.63 pounds and is projected to reach 2.66 pounds in 2001/02. Processing use dropped 5 percent to 421 million pounds--about the same as in 1990. Imports now account for 67 percent of processed mushroom consumption compared with an average of 54 percent for the 1990s and 55 percent in the 1980s. Box Item: The Vegetables and Specialties Situation and Outlook report is being replaced by an electronic newsletter titled Vegetables and Melons Outlook. These reports can be accessed via the ERS web site at the following address: http://www.ers.usda.gov/publications/vgs/. As of January 1, 2002, this new every-other-month newsletter will replace the less-frequently issued Vegetables and Specialties Situation and Outlook report series. The Vegetables and Specialties Situation and Outlook Yearbook (the most recent of which was VGS-284 issued in July) will continue to be made available in both electronic and printed versions. The premier issue of the Vegetables and Melons Outlook newsletter, VGS-285, was released on August 22, 2001 and the second issue was VGS-286, released on October 23. For a free subscription to this newsletter, go to: http://www.ers.usda.gov/updates. The Vegetables and Melons Outlook newsletter will continue to provide current intelligence and forecasts of changing conditions in the U.S. vegetable, pulse, and melon sectors. Special articles of topical interest will also continue to be provided. The release schedule for 2002 is as follows: February 20; April 18; June 20; July 25 (Yearbook); August 22; October 24; and December 16. All reports are posted at 3PM. The full outlook report calendar for 2002 with the day of release for each report appears on the ERS website at: http://www.ers.usda.gov/calendar/. *** End of box item *** Industry Overview While growers, shippers, and processors struggle with soft demand and the strong dollar, they may at least experience some breathing room with regard to operating costs over the next year. A few of the expected benefits from the current economic climate include: O continued low general inflation; O reduced interest rates; O lower prices for fuels and energy; and O declining prices for energy-related inputs such as fertilizer and transportation. Some economic highlights for the U.S. vegetable and melon sector include: O This fall, fresh-market vegetable and melon area for harvest is forecast to rise 4 percent from a year ago. Fall area is forecast the same or higher for all items but cucumbers and watermelons. The outlook for the winter season calls for a smaller increase in area, larger supplies, and lower prices than a year earlier. O With increasing supplies and a slow economy restraining demand, fresh-market vegetable shipping-point prices are expected to decline this fall. This drop could be as much as 15 percent from both the previous quarter and from last fall. O Contract production of the four major vegetables for processing is expected to decline 10 percent from a year ago to 13.6 million short tons. Production was lower than a year ago for each crop, with green pea output down the most (29 percent). O Seeking to reduce inventories and prop up weak wholesale prices, vegetable processors planned to reduce output this year by cutting area for harvest 9 percent. Production was further curtailed as yield for each crop was reduced by a cool wet spring, a hot dry summer, and frost at the close of harvest. O U.S. sweet potato growers expect to harvest 93,100 acres this fall, down 2 percent from a year ago. North Carolina and Louisiana, the top sweet potato-producing States, are each expected to harvest 1,000 acres less than last year. O Although vegetable and melon exporters would certainly benefit from a devaluation of the U.S. dollar, the decline in the dollar experienced during the summer may not be maintained due to the weakening world economy. Thus, the combination of a continued strong dollar and a weak world economy will likely continue to hinder export growth over the next several months. O The U.S. fall-season potato crop is expected to be the smallest since 1993. The 14-percent decline will result from an 8-percent decrease in harvested area and 6 percent lower yields. With supplies down during the 2001/02 season, shipping-point prices could average a third above the $5.08 of 2000/01. O During the next decade, domestic production of all vegetables and melons is forecast to increase an average of 3 percent annually. U.S. production would exceed 73 million metric tons by 2011, with a farm value of nearly $21 billion. The United States will remain a net importer of vegetables, with imports and exports expected to rise an average of around 3 percent annually during the next decade. Fresh-Market Vegetables Fall Acreage Up, Prices Down This fall (largely October-December), fresh-market vegetable and melon area for harvest is forecast to rise 4 percent from a year ago. Fall area is forecast the same or higher for all items but cucumbers and watermelons. The largest gains were for sweet corn (up 24 percent) and honeydew melons (up 23 percent). Increases in shipments of sweet corn will likely not match the rise in area, with yields in California expected to be lower due to increased pest pressure. With normal weather, supplies should be more than adequate to meet expected lackluster demand. Given acreage, current weather, and yield trends, potential fall-season fresh vegetable and melon shipments could be 1 to 4 percent greater than a year ago. While potential supplies could be up, demand appears to have softened over the past few months, largely as a result of the weaker economy. As a result, fall-quarter grower prices are expected to remain below year-earlier levels. During the fall, the top five fresh vegetables in terms of volume (excluding potatoes and onions) are head lettuce, tomatoes, celery, cabbage, and carrots. Lettuce area is up 3 percent with yields likely to average near those of a year ago despite an early October bout with abnormally high temperatures in California. Fall tomato area is also up 3 percent, with Florida higher and California area lower. Minor damage to Florida fields from Tropical Storm Danielle in mid- September could delay harvest and trim early yields slightly. California, which expects to harvest 3 percent more area this fall, accounts for 62 percent of fall-season area. Much of the gain in California is due to lettuce, carrots, and honeydew melons. Florida, with an estimated 23 percent of domestic fall-season area, expects to harvest 8 percent more fresh acreage, led by tomatoes and sweet corn. Carrot acreage is up 7 percent from last fall in response to continuous gains in shipping-point prices over the past year. Until easing in September, monthly f.o.b. prices had trended higher since bottoming out in January of 2000 at $9.62 per cwt--the lowest January price since 1980. Fresh-market carrot shipping-point prices peaked in July at $20.70 per cwt--the highest nominal July price on record. Shipments To Rise, Prices Soften U.S. fresh-market vegetable and melon shipments are expected to be stronger this fall relative to a year ago. Through the first 3 quarters of 2001, preliminary data indicate aggregate fresh-market volume was 7 percent below a year earlier, with volume down each quarter. However, assuming average fall weather and yields, volume is expected to rise slightly during the fourth quarter. Shipment volume was down about 3 percent last fall due to reduced acreage and sporadic weather disruptions. Increased acreage this fall is a reflection of continued strong grower prices experienced over the past year. It also reflects last falls record-high prices, which were up 30 percent from the lows seen during the fourth quarter of 1999. Given increasing supplies and a slow economy restraining demand, fresh-market vegetable shipping- point prices are expected to decline this fall. This drop could be as much as 15 percent from both the unexpectedly strong third-quarter levels this year and the fourth-quarter average of a year ago. Storage Onion Crop Down, Prices Up Production of storage onions is expected to decline 9 percent in 2001. The storage crop, which provides the bulk of the Nations onions until next spring, accounts for about two-thirds of all onions grown. Both harvested area (down 4 percent) and per-acre yield (down 6 percent from the 2000 record) are lower this year. Yields were off due to a cool, wet spring and summer drought in many areas which cut average bulb size. Total onion production (storage and non-storage) for 2001 is estimated to be about 6.7 billion pounds--down 6 percent from a year ago. Storage onion production in California dropped 22 percent to the lowest level since 1992. About two-thirds of Californias crop is processed, largely into dehydrated products. California producers cut acreage 20 percent this year. Most of this cut was likely by dehydrators responding to lower wholesale prices. Inventories of dehydrated products have likely been higher than usual, which has depressed prices for onion flour and powder by an estimated 5 to 7 percent. In terms of both farm value and per capita consumption, onions are one of the top five vegetables in the United States. Given expected higher prices for the 2001/02 crop, the farm value could equal or exceed that of a year ago, but remain well below the 1998 record of $838 million. Between $50 and $70 million of onion crop value will consist of processing onions, with the remainder reflecting fresh- market production. The shipping-point price for fresh-market onions in September averaged 23 percent above the previous year. However, prices declined seasonally in October, averaging just 2 percent above a year earlier. The steep drop in prices reflected a bulge in supply caused by seasonal harvest volume and also a reduction in demand (largely in the foodservice sector and export market) reflecting a weakening global economy. Despite slackening demand, onion prices are expected to follow a typical pattern this season--reaching their seasonal low in October and then trending upward into next April. The current forecast for 2001 per capita fresh onion consumption is 18.8 pounds, virtually the same as the two previous years. Consumption is likely to remain flat as shrinkage remains steady and increased import volume offsets most of the drop in domestic production. The outlook for 2002 suggests that fresh consumption will remain stable for the fourth consecutive year as domestic output rises and imports decline. Trade: Fresh Imports Up The value of fresh-market vegetable and melon imports (excluding potatoes) was up 21 percent from a year ago during the first 8 months of 2001 (Jan.-Aug.). Much of the increase occurred during the first quarter. Tomatoes alone accounted for about one-third of the increase through August--the value of tomato imports rose 26 percent during the first 8 months. Bell peppers (up $75 million), onions (up $29 million), squash (up $28 million), and cucumbers (up $23 million) accounted for the lions share of the remaining increase. On October 5, after an investigation (covering calendar 2000) into alleged dumping of hothouse tomatoes from Canada, the U.S. Dept. of Commerce announced a preliminary affirmative determination that greenhouse tomatoes from Canada are being, or are likely to be sold in the United States at less than fair-value prices. If upheld pending further analysis, the estimated anti-dumping percentage duties could average in double-digit figures. The final determination is expected to be made in early 2002. Asparagus Output Down According to preliminary data, 2001 fresh-market asparagus production declined 8 percent to 1.4 million cwt. This was the first reduction since 1995 and reflected acreage cuts (primarily in California and Washington) forced by last years low prices. Although late-season prices were relatively poor, average 2001 fresh-market prices rebounded 20 percent to $140 per cwt--the highest on record (in both current and inflation-adjusted terms). The value of the fresh crop was also record-high at $193 million, with California likely accounting for about three-quarters of the total. Most of the increased revenue over a year ago likely accrued to California and New Jersey shippers who generally received better prices than Michigan and Washington growers. Only 16 percent of Michigans asparagus crop moves into fresh-market channels, with the remainder processed. With demand for canned asparagus waning in favor of fresh, Michigan growers (among others) have been trying to increase fresh sales. Michigan fresh sales peaked at 31 percent of production in 1981. The fresh-market proportion of output then trended lower until bottoming out in 1994 when it accounted for just 9 percent of output. With nominal average prices the lowest since 1976, Michigans 2001 fresh value was the second smallest since 1977. U.S. consumption of fresh asparagus will likely decline about 4 percent in 2001 to 0.9 pound due to the drop in domestic production and slightly lower imports. Processing Vegetables Production Down, Prices Up Contract production for the four major vegetables for processing (tomatoes, sweet corn, snap beans, and green peas) is expected to decline 10 percent from a year ago to 13.6 million short tons. Production was lower than a year ago for each crop, with green pea output down the most (29 percent). Seeking to reduce inventories and prop up weak wholesale prices, processors planned to reduce output this year by cutting area for harvest 9 percent. Production was curtailed further as yield for each crop was reduced by a cool, wet spring and a hot, dry summer. Domestic output of sweet corn for canning was forecast to decline 4 percent from a year earlier to 3.04 million short tons. Harvested area was down 3 percent and the estimated per-acre yield averaged 1 percent less than a year earlier. Yields were up in most States, with the exception of New York and Minnesota where dry weather impacted maturity and sizing. To start the season, canning firms were also faced with the prospect of slowing domestic and world economies hindering growth in demand. Despite fundamentally weak economies in several areas of the world and a strong U.S. dollar, traders managed to increase canned vegetable export volume 3 percent during the first 3 quarters of the calendar year. In the domestic market, forecasts currently indicate that per capita consumption of canning vegetables may have been the lowest since 1989 at about 102 pounds, fresh-weight basis. According to the California Processing Tomato Advisory Board, 8.64 million short tons of tomatoes were processed this season--down 16 percent from a year earlier. The harvest of California processing tomatoes in October generally brings a price premium to the grower due to the heightened risk of crop failure. Such late-season volume can account for as little as 3 percent of the total crop (as in 1998 and 2000) or in the case of the record-large 2000 crop, 14 percent of output. This year, California tomato processors packed 8 percent of the crop after September 30. Other States are expected to process about 0.5 million tons--about the same size as Canadas crop. With supplies trimmed, wholesale tomato product prices are expected to rise this fall and continue above year-earlier levels into 2002. Improved prices during the marketing year and the re-opening of several refitted processing facilities in California is expected to bring increased tomato acreage and a larger crop next summer and fall. With world prices also improved, production is also expected to be higher in other tomato-processing nations in 2002. Thus, if the world economy remains weak next year, soft demand and high tomato product inventories could bring yet another round of low prices and acreage reductions for 2003. Processed Trade: Imports Up The value of processed (canned, frozen, dried) vegetable and melon imports rose 6 percent from a year ago during January to August 2001. The following import value comparisons with a year earlier were noted: O Canned, up 12 percent to $340 million; O Frozen (excluding potatoes), up 1 percent to $191 million; O Frozen potatoes, up 1 percent to $241 million; O Dried (excluding potatoes), down 4 percent to $102 million; O Planting seed (excluding potato), down 5 percent to $102 million. Increased imports of canned dry beans, sweet peas, tomato products, and miscellaneous vegetables outweighed reductions in items such as waterchestnuts and artichokes. With domestic supplies declining, higher prices could bring increased canned imports over the next year. On the frozen side, imports of broccoli rose 7 percent to $79 million while frozen french fries, most all from Canada, rose 2 percent to $223 million. Processing Vegetable Prices Up 2 Percent For 2001, wholesale prices as measured by the producer price index (table 22) for canned vegetables and juices are forecast to average about 2 percent higher than a year ago. Until recently, wholesale prices for canned vegetables had changed little over the past 5 years, reflecting stagnant demand and adequate supplies. In the coming year, reduced packs will trim supplies of the major canned vegetables and provide upward pressure on wholesale prices. Depending on final pack levels, the pricing story may be similar for frozen vegetables. Wholesale prices for frozen vegetables in 2001 are also expected to average 2 percent above a year ago, after changing little over the past 7 years. With the exception of green peas, supplies of most major items appear to be sufficient to cover normal market needs. Wholesale prices for dried and dehydrated vegetable products, which reached a record-high during December 1999, bottomed out this past spring. Prices have embarked on a slow but steady incline since the California garlic harvests began in early summer. With California dehydrators also cutting production of onion products by at least one-fifth, the supplies that have burdened markets since late 1999 should remain below year-earlier levels. Wholesale prices are expected to continue climbing into mid-2002. Dehydrated vegetable prices are difficult to track in the United States, but one way to gauge price trends in the market is to observe average export values. The average export value for dehydrated garlic products for the first 8 months of 2001 was $1.003 per pound, up 2 percent from a year earlier. Dehydrated onion prices are on a similar path, with average export values up 1 percent during the first 8 months of 2001 to 99.6 cents per pound. Average retail prices for all processing vegetables increased about 4 percent during the first 9 months of the year. Higher marketing costs and declining stocks left frozen vegetable prices about 5 percent higher, while higher energy and labor costs caused consumer prices for canned vegetables to rise 3 percent (table 22). World View of Canned Sweet Corn The United States is the leading exporter of prepared/preserved (canned) sweet corn with 44 percent of world export volume during 1997-99. France, Hungary, Thailand, and Canada round out the top five export nations, which collectively account for the majority of world canned export volume. World trade in canned sweet corn increased 35 percent from 1994-96 to 1997-99. Although volume shipped by the U.S. and France rose 16 and 23 percent, respectively, these two countries lost market share to the number 3 through 5 exporters. Substantial gains were realized by Hungary (up 105 percent), Thailand (up 134 percent), and Canada (up 65 percent). Despite the strength of the U.S. dollar over the past several years, U.S. canned sweet corn export volume rose 16 percent from 1994-96 to 1997-99. Two-thirds of U.S. canned sweet corn exports are shipped to five countries: Japan (32 percent of the total), Taiwan (13 percent), South Korea (9 percent), the United Kingdom (7 percent), and the Netherlands (7 percent). Growth in U.S. canned sweet corn exports has been essential in maintaining domestic production over the past decade as domestic consumption has been trending lower. U.S. per capita use of sweet corn for canning has been on a downward trend since the early 1970s and averaged 9.3 pounds during 1997-99--nearly one-fifth below the level experienced at the start of the decade. Rising incomes and changing tastes and preferences have resulted in U.S. consumers shifting toward fresh and frozen vegetables. According to the 1997 Census of Manufacturers, most U.S. whole kernel canned sweet corn is produced in the Midwest, with 13 canning firms accounting for the bulk of the output. The leading importers of prepared/preserved (canned) sweet corn are Germany (14 percent of the world total), Japan (14 percent), the United Kingdom (11 percent), Russia (9 percent), and China/Hong Kong (8 percent). During 1997-99, Germany received 53 percent of its canned sweet corn imports from France, with Hungary (13 percent) and the United States (12 percent) the next largest suppliers. Germanys canned sweet corn import volume rose 2 percent between 1994-96 and 1997-99. Japan receives 87 percent of its canned sweet corn import volume from the United States, with another 3 percent arriving from Thailand. Driven largely by one major Thai company, Thailands share of the Japanese canned corn market has steadily risen since the mid-1990s. With demand slowed by recession and an apparent consumer shift toward frozen corn, Japans canned sweet corn imports declined 3 percent between 1994-96 and 1997-99. The United Kingdom (U.K.) relies on France for 41 percent of its imported canned sweet corn but also receives substantial volumes from Canada (22 percent) and the United States (18 percent). U.K. sweet corn import volume rose 15 percent between 1994-96 and 1997-99. Potatoes Reduced Acreage and Yields Lead to Smallest Crop Since 1993 The first estimate of U.S. fall-season potato production is 401 million hundredweight (cwt), down 14 percent from last year, and the lowest since the fall of 1993. The decrease is due to an 8-percent decrease in harvested area and a 6-percent drop in yields from a year ago. Production was down in all major growing areas, as growers reduced acreage in reaction to last years low grower prices. The reduced fall-season crop combined with smaller harvests this past winter, spring, and summer, puts total production for 2001 at 442 million cwt, 14 percent below the record 514 million cwt produced in 2000. Such a large decrease in production will put strong upward pressure on grower prices for the 2001/02 marketing season. The greatest decrease in production occurred in the Western States, where fall output was estimated to be 273 million cwt, 17 percent less than last fall. Production is expected to be lower in all States, including Idaho (down 16 percent), Washington (down 10 percent), Colorado (down 24 percent) and Oregon (down 32 percent). These are also the largest producers in the United States. Reduced production was the result of significant cuts in acreage and lower yields in most States, due to poor prices received for last fall's crop. In Oregon and California, part of the large reduction in acreage was due to a lack of irrigation water available during the growing season in the Klammath Valley. In the eight Central States, production was 102 million cwt, down 7 percent from last year. Harvested area was down 3 percent from a year ago, while average yields were down 14 cwt per acre. Production fell in Nebraska (down 16 percent from a year ago), Minnesota (9 percent), North Dakota (5 percent), Wisconsin (5 percent), and Michigan (6 percent). Although a relatively small potato producer, South Dakotas output was cut by more than half from a year earlier, due to reduced acreage and much lower yields. The only Central State with improved production over a year ago was Indiana, which was up 18 percent because of ideal growing conditions and a 4-percent increase in harvested area. Production in the five Eastern States was 26 million cwt, 7 percent below a year earlier. Maine, the largest potato-producer in the East, realized a 10-percent decline in production, due to a 3-percent reduction in acreage and a 7-percent drop in yields from a year ago. Late August rain helped keep yields from falling more significantly. Prices To Rise in 2001/02 The large decrease in production this fall is expected to combine with several other factors to increase marketing year 2001/02 grower prices significantly from last years relatively low levels. Although stocks of fresh potatoes from last falls crop were at record-high levels into June of this year, efforts by both the potato industry and USDA to reduce supply through two separate diversion programs helped to remove about 14-17 million cwt. This helped to raise grower prices towards the end of the 2000/01 marketing season, and reduced available fresh stocks coming into this marketing season (fresh stocks data are not available past June). Additionally, cold storage holdings of frozen potato products at the end of September were only 2 percent above a year ago despite record-high processing output in 2000/01--indicating that demand for frozen potato products continues to be strong. In addition to the lower supply of potatoes this year and strong demand, quality issues may also contribute to higher prices this season. Although the overall quality of the fall crop is expected to be good, it is not expected to be as good as a year ago. A larger percentage of this falls crop (compared with last years) might be misshapen, off-size, or otherwise not meet processor requirements or U.S. number-one grade requirements. This will likely increase price competition for fresh-market and open-market (non-contracted) processing potato purchases. An expected reduction in Canadian and European potato output will add further upward pressure to prices this season. Canadian potato production is forecast to be the smallest since 1995. The large decrease is expected despite a slight increase in planted acreage from a year ago. Drought conditions in many major growing areas cut yields sharply. Extreme drought in Prince Edward Island (PEI), the largest potato-producing Province, likely caused a drop in yields and production of about one-third from a year ago. Production may also be down slightly in the Prairie Provinces--with a reduction in Manitoba largely offset by an increase in output from Alberta. These two Provinces, particularly Alberta, have become significant potato- producing regions during the last 5 to 10 years due to rapidly expanding frozen potato processing capacity. With expected sharp declines in potato production in Manitoba and PEI, there is likely to be strong demand for potatoes from Alberta and perhaps even the United States to help keep processing plants in Manitoba and PEI running throughout the marketing year. As a result, North American potato processors could experience more intense price competition for a tighter supply of open-market potatoes in the coming months. The supply situation in Europe doesnt appear much different than in North America. Early production estimates indicate that overall production could be down about a tenth from last year. After 2 years of high production and relatively low prices, planted area was reduced about 3 percent this year. Additionally, early reports indicate overall yields may be off as much as 5 percent from last year, with harvest across the northern portion of the continent hampered somewhat by wet conditions. Significant decreases are expected in Germany (the largest potato producer in Europe), and the Netherlands (the EUs second largest potato producer and the largest exporter of frozen potato products in the world). Higher prices are anticipated as European futures prices for potatoes rose dramatically as harvest progressed. This could mean increased export potential for U.S. processed potato products to Europe in the coming year, which could add further upward pressure for grower and retail prices in the United States. Given these factors, the 2001/02 season-average grower price for all potatoes (all seasons) could rise to over $7.00 per cwt, and could possibly eclipse the previous record of $7.36 set back in 1989 (that would be 45 percent higher than the $5.08 average for the 2000 crop). While prices might not rise quite that high, early-season prices do show a significant increase over a year ago, with September and October grower prices averaging nearly 30 percent higher. As the marketing season progresses into next spring and summer, if processing demand remains strong, competition for remaining potatoes will increase and prices would likely rise significantly. Utilization of the 2000/01 Crop Last years record potato production of 514 million cwt resulted in the largest quantity of potatoes sold in a marketing year--3 percent above the previous record set in 1996/97 (table 6). Fresh use rose 3 percent from a year earlier to 139 million cwt--the highest since 1965. Processors used a record 288 million cwt of raw potatoes, 5 percent above a year earlier and 1 percent above the previous record set in 1996/97. However, shrinkage and loss for the 2000/01 crop was nearly 44 million cwt, which is 37 percent above a year earlier and the highest it has been since 1985/86. Also, the relatively low season-average grower price of $5.08 in 2000/01 (12 percent below a year earlier) caused total grower sales to fall to $2.4 billion (down from $2.5 billion in 1999/2000). Utilization for frozen french fries for the 2000/01 crop was up 5 percent from a year earlier to 147 million cwt, accounting for 51 percent of processing use. Utilization also increased for other frozen products (up 14 percent from a year ago), and dehydration (up 8 percent), while it declined for chips (down 1 percent), and canned products (down 5 percent). Potatoes sold for livestock feed rose to 10 million cwt in 2000/01, more than three times the amount sold for feed the previous season, and the highest it has been since 1996/97. With a much smaller crop in 2001/02, it is likely that utilization will fall for all categories in the coming year. Per Capita Use Up in 2001 Per capita use of potatoes (fresh-weight basis) for calendar year 2001 is forecast at 146.4 pounds, 3 percent above 2000, and the highest it has been since 1929. The increase is due largely to the record crop in the fall of 2000. Fresh use increased slightly, while processing use rose to a record-high 97.7 pounds, up 4 percent from 2000 and 1 percent above the record set in 1996. Much of the gain was in frozen products (up 3 percent from year-previous) as domestic demand continues to be strong. Domestic per capita use is forecast to decline about 2 percent in 2002 due to the decrease in worldwide production in the fall of 2001. If prices rise significantly and the crop has lower processing-quality potatoes this year (rougher shapes, lower-solids contents, etc), it is possible that a larger portion of the decline in consumption will be realized in processed products. Sweet Potatoes Acreage Down 2 Percent U.S. sweet potato growers expect to harvest 93,100 acres this fall, down 2 percent from a year ago. North Carolina and Louisiana, the top sweet potato-producing States, are each expected to harvest 1,000 acres less than last year. Acreage is also down slightly or the same as a year ago in most other States, with the notable exception of Mississippi, where harvested area is expected to be 14,800 acres--20 percent higher than in 2000. Although there has been a decrease in acreage, it is not clear that there will be a corresponding decrease in production because overall yields are uncertain at this point in time. As of mid-October, harvest was on schedule or slightly ahead in most growing areas. The most notable exception was Texas, which was running behind schedule due to prolonged wet conditions. Harvest of sweet potatoes typically begins in mid-to-late August in some southern areas of Louisiana, Mississippi, and Texas, working its way northward to North Carolina by early to mid-September. Harvest is in full swing or winding down in most areas by mid-October. This year growers have been experiencing varied crop and harvest conditions ranging from somewhat dry to relatively wet. If national yields rise from a year earlier and return to trend (152 cwt/acre), sweet potato production would rise from a year ago to 14.1 million cwt. This slight increase in production would unlikely change grower prices significantly from the $15.30/cwt average received for the 2000 crop. However, if overall yields turn out to be no better than a year ago (145 cwt/acre), sweet potato production would drop slightly from last years total to around 13.5 million cwt. Given steady demand, production at this level could strengthen grower prices to around $16.00 per cwt. The long-run outlook for sweet potato production in the United States shows slow but steady growth over the next decade. Production should increase at or slightly faster than the rate of growth in population. Although rising, trade in sweet potatoes is a small component of the industry. Only 2 percent of sweet potato supplies were exported during the 1990s--up from 1 percent in the 1980s. Export volume rose 53 percent during this time even as U.S. production remained flat. Over the next decade, exports of sweet potatoes are forecast to continue trending upward, increasing 4 to 5 percent annually. However, imports of sweet potatoes are expected to largely offset export gains, helping to keep domestic per capita consumption at or near the current level of 4.5 pounds over the coming decade. Dry Edible Beans Reduced Supplies Indicated The October estimate of U.S. dry bean production indicated a reduction of 27 percent from a year earlier to 19.4 million hundredweight (cwt). This would be the smallest crop since 1988 when low prices caused growers to cut acreage 17 percent. The crop that year was further reduced when yields were cut by a severe Midwestern drought. This year, Michigans crop was hit hard by drought, with per-acre yields declining 60 percent to 600 pounds--the lowest yield since 1936. Michigans dry bean crop will be the smallest since records began in 1909. At the same time, yields in North Dakota, the top producing State, are expected to rise 3 percent to 15 cwt--the second highest on record (1986 was 15.5 cwt). With reduced area, North Dakotas crop is expected to drop 17 percent from a year ago to 6.3 million cwt. Reduced output is expected for most bean classes, including pinto, navy, black, Great Northern, red kidney, cranberry, and lima beans (estimates by class will be released December 11). These smaller crops should result in substantial reductions in elevator and warehouse stocks over the course of the 2001/02 marketing year. As a result, aggregate dry bean prices are expected to rise through mid- 2002. With much improved grower prices during the 2001/02 marketing year, area planted to dry beans is expected to increase 25 to 30 percent in the spring of 2002. During the winter quarter (Jan.-Mar.), aggregate dry bean grower prices averaged 2 percent below a year earlier. However, during the second quarter the markets began to react to a combination of stronger export demand and grower intentions to reduce 2001 acreage. Second-quarter prices averaged 5 percent higher than a year earlier. Since then, momentum has continued to shift markets higher as players react to low yields and a short 2001 crop. This was reflected in third-quarter grower prices, which averaged 20 percent above a year earlier as prices across most bean classes began to rise. Price leaders during the third quarter included black beans (up 40 percent from the second quarter) and navy beans (up 20 percent). Due to the drought conditions in Michigan this summer, both navy and black beans are expected to be in much shorter supply in the coming year. These two classes are likely to lead aggregate dry bean prices higher during the fourth quarter of 2001, with grower prices for all beans this quarter forecast to average about 30 percent above a year earlier. With average grower prices for dry beans very low over much of the past marketing year, retail prices for dry bagged beans also drifted lower, declining 1 percent from a year earlier during the first 9 months of 2001. However, as grower prices began to firm during the year, the U.S. dry bean grower-retail price margin increased, with the grower share of retail value moving up from a low of just 22 percent during the first quarter to 28 percent in October. The grower share of retail value is expected to exceed 30 percent during the first half of 2002--the highest it has been since 1997. During January-August, dry bean export volume rose 24 percent from a year earlier. Through August, export volume was up for navy, pinto, black, light-red kidney, and Great Northern beans. Partly offsetting were declines for limas, small red, dark-red kidney, and pink beans. U.S. exports (commercial and food aid) increased to Mexico, Japan, Angola, and Haiti but declined to the United Kingdom, Canada, Honduras, and Nicaragua. Forecasts of domestic dry bean consumption in 2001 suggest a decline of 8 percent to 2.0 billion pounds--about the same as it was in 1996. Forecasts for 2002 suggest higher prices and sharply reduced supplies may subdue domestic use during the first half of the year but use should partially recover as production increases during the latter part of the year. Navy Production Down, Prices Rise Navy (pea) bean production in 2001 has been reduced for the second consecutive year. Although data were not available at this writing, navy bean production may be down as much as 50 percent and the crop may be the smallest since 1921. Output is likely down in every major State with the traditional leader, Michigan, likely suffering the largest crop loss due to drought. The smaller crop means pea bean stocks entering the 2002 season should be substantially reduced. As a result, pea bean prices have strengthened and should continue to do so as the marketing year progresses. Grower prices (MN/ND) began the marketing year in September at $18.25 per cwt--up 73 percent from the rock bottom lows of a year earlier. Prices had climbed to $22 by mid- November. The October monthly average price was the highest for that month since 1996. The reduction in stocks and higher prices will likely set the stage for a substantial increase in area and production in 2002. Navy bean exports have been strong this year, with volume during the first 8 months of the year up 55 percent from a year earlier. Increased movement to the U.K. (up 189 percent), New Zealand, Mexico, and the Dominican Republic outweighed reduced movement to Italy (down 6 percent) and South Africa. Exports are expected to account for about one-third of supplies, up from 21 percent in 2000 and 23 percent during the 1990s. The recent low was in 1992 when just 14 percent of supplies were exported. Mushrooms Fresh Sales Up, Processing Down The Nations 264 mushroom growers produced 853 million pounds of agaricus and specialty mushrooms during the 2000/01 season (July- June)--down 2 percent from the previous season. Agaricus mushrooms (white and brown types) accounted for 99 percent of the crop. With processed mushroom import volume returning to levels experienced prior to the institution of dumping duties on several countries in early 1999, processing mushroom sales volume fell 18 percent. Because of rising imports and increased consumer preference for fresh mushrooms, sales of domestically produced processing mushrooms were 40 percent below their 1992/93 peak and were the lowest since the 1970/71 season. In contrast, sales of fresh agaricus mushrooms rose 3 percent to a record-high 687 million pounds. The fresh market accounted for 82 percent of all agaricus mushroom sales volume and 89 percent of total agaricus value. Pennsylvania continues to dominate the agaricus industry, with market share rising to 53 percent of the national crop--up from 52 percent a year ago and 50 percent 2 years ago. California (15 percent) and Florida (5 percent) are the other leading States. Pennsylvania has increased share in both the fresh (from 41 to 49 percent) and processing (from 65 to 71 percent) markets since 1997/98. For the second year, the USDA has collected statistics on certified organic mushrooms. Sales of certified organic mushrooms totaled 8.5 million pounds in 2000/01, down 27 percent from a year ago. Organic output accounts for about 1 percent of all mushroom sales. Currently, 11 percent of the Nations 264 mushroom growers produce certified organic mushrooms. The value of domestic mushroom sales totaled $863 million in 2000/01, placing the crop fourth (following potatoes, tomatoes, and lettuce) among all vegetable crops. Shiitake, oyster, and other specialty mushrooms combined with agaricus Portobello- and agaricus Crimini- type mushrooms now account for $156 million in crop value--18 percent of all mushroom sales. In the current (2001/02) season, agaricus producers intend to increase bed and tray fillings 3 percent to 148 million square feet. Most of the increase will be in Pennsylvania. Fresh-market area is expected to account for about 89 percent of total fillings. Assuming average yields (about 5.7 pounds per square foot), output is expected to rise about 1 percent over the coming year. Until this year, yield per square foot (which was record-high in 2000/01 at 5.83 pounds) had changed marginally over the past 5 years. With improved cultural and production management practices, national yield has risen 9 percent over the past 10 years and stands 74 percent higher than 20 years ago. In early November, mushroom wholesale prices were running above year- earlier levels. For example, in the Boston wholesale market, a 10- pound carton of medium Pennsylvania white button (agaricus) mushrooms was $12, up 26 percent from a year earlier. Three-pound cartons of Shiitakes were 11 percent higher. Portobellas (brown agaricus) were also running higher, with prices 24 percent above a year ago. Use of all mushrooms totaled 1.15 billion pounds in 2000/01 (fresh- weight basis)--up from 930 million pounds in 1990 and 625 million in 1980. Nearly all the gain in total mushroom demand since 1990 has been the result of rising fresh use. Fresh use totaled 727 million pounds in 2000--up 4 percent from a year earlier. On a per-capita basis, fresh use rose nearly 4 percent from a year earlier to 2.63 pounds and is projected to reach 2.66 pounds in 2001/02. Processing use dropped 5 percent to 421 million pounds--about the same as in 1990. Imports now account for 67 percent of processed mushroom consumption compared with an average of 54 percent for the 1990s and 55 percent in the 1980s. According to the Food and Agriculture Organization of the United Nations, world mushroom production (largely agaricus) is estimated to have risen 2 percent to 5.3 billion pounds in 2000. Production in China, which leads with 30 percent of the world crop, is estimated to have risen 8 percent last year. The United States remains the second leading producer, with 16 percent of world production. The Netherlands (10 percent), France (6 percent), and the United Kingdom (4 percent) round out the top five producers. Special article Factors Affecting Watermelon Consumption in the United States Gary Lucier and Biing-Hwan Lin 1/----- ----- 1/ Lucier is an economist with the Market and Trade Economics Division and Lin is an economist with the Food and Rural Economics Division of USDAs Economic Research Service. ----- Abstract: U.S. watermelon consumption has fluctuated over the past decade. Basic knowledge of the distribution of watermelon consumption across different marketing sectors, geographic regions, or population groups has been limited in the past. Using data from the United States Department of Agricultures 1994-96 Continuing Survey of Food Intakes by Individuals, this article examines the consumption distribution of fresh-market watermelon in the United States. The analysis indicates that per capita watermelon consumption is greatest in the Northeastern and Western areas of the country. The majority of watermelon is consumed at home, with middle-aged men accounting for the greatest share. Keywords: Watermelon, consumption, per capita use, distribution, regions, income, age. Watermelon is consumed frequently as a dessert, snack, fruit salad, breakfast food, picnic food, edible plate garnish, in drinks, and is used in many other creative ways. Up until two decades ago, watermelon was largely a seasonal fruit that appeared in the market for a few months and then disappeared as late summer and fall fruit crops were harvested. Today, imports during the winter and early spring help satisfy consumer demand for year-round supplies of watermelon. In 2000, U.S. consumption of watermelon totaled 3.9 billion pounds--59 percent greater than the 1980 level. There has been continuing interest in information regarding the consumption distribution of foods such as watermelon. Although much is known about the supply side of the U.S. watermelon market, relatively little has been published about consumer demand. According to per capita disappearance data compiled by the U.S. Department of Agricultures (USDA) Economic Research Service (ERS), total watermelon consumption reached a recent peak of 16.8 pounds per person in 1996 but has averaged about 15.1 pounds per person since. A combination of factors, including immigration trends, changing family sizes, and shifts in Americas tastes and preferences has likely contributed to movements in per capita watermelon use. However, due to a dearth of consumer research in this area, the demographics of watermelon consumption have not been quantified. Some basic questions include; what proportion of watermelon are purchased at retail for use at-home versus purchased away-from-home? Who consumes watermelon? Has the increasing Asian and Hispanic population in the U.S. influenced watermelon demand? The purpose of this article is to provide unique basic information about the market distribution of watermelon using data derived from USDAs most recent individual food consumption survey. Following a short discussion of the data used in the analyses, the next sections will describe the distribution of watermelon consumption by food source, region of the country, ethnic background, income class, and age and gender. Data and Methodology The USDA has conducted periodic surveys of household and individual food consumption in the United States since the 1930s (see box). The most recent survey, the 1994-96 Continuing Survey of Food Intakes by Individuals (CSFII) -----2/, ----- 2/ U.S. Department of Agriculture, Agricultural Research Service, 1998. 1994-96 Continuing Survey of Food Intake by Individuals and 1994-96 Diet and Health Knowledge Survey. CD-ROM. Available from National Technical Information Service, Springfield, VA. ----- conducted by USDA's Agricultural Research Service (ARS), provided the basis for this article. Each year of this 3-year data set comprises a nationally representative sample of non-institutionalized persons residing in 50 States and Washington, D.C. In the 1994-96 CSFII, 2 nonconsecutive days of dietary data for individuals of all ages were collected 3 to 10 days apart through in-person interviews, between January 1994 and January 1997, using 24-hour recalls. The 3-year CSFII data set includes information on food and nutrient intakes by 15,303 individuals who provided dietary data for both days. The respondents provided a list of foods consumed as well as information on where, when, and how much each food was eaten. Standardized probes were used to collect details on food descriptions and amounts of food eaten. The location where the food was purchased was coded into several categories. For each respondent, an array of economic, social, and demographic characteristics were also collected. This rich database enables researchers to estimate the market/consumption distribution of a food by numerous delineations. Watermelon Markets and Use Watermelon is the leading U.S. melon crop in terms of acreage, production, and per capita consumption. Because of higher unit values, cantaloupe is the leading melon in terms of crop value. During 1998-2000, the farm value of watermelon production averaged $262 million--up 36 percent from a decade earlier. Although production has been rising, the acreage devoted to watermelon has been trending lower over the past few decades. During the most recent decade, declining acreage has likely been a combination of rising per-acre yields and successive years of freeze damages in Florida and drought in Texas. Increased watermelon yields reflect improved varieties and a larger proportion of acreage covered by irrigation, especially in States like Texas. In addition, seedless varieties now account for a substantial portion of the watermelon crop. With much higher seed costs and more challenging cultural requirements, seedless watermelon acreage tends to be more intensively managed--resulting in less crop abandonment and higher per-acre yields. Average (1998-2000) U.S. annual per capita use of watermelon has increased 31 percent over the past 20 years (1978-80), and is expected to total 13.2 pounds per person in 2001 (table A-1). Most watermelon is consumed fresh, although there are several processed products in the market such as roasted seeds, pickled watermelon rind, and watermelon juice for which no data are currently available. Per capita watermelon use began trending higher after bottoming out in 1980 at a record-low 10.7 pounds (records began in 1919). Domestic use of watermelon surged heading into the 1990s but leveled off and declined later in the decade. Consumption averaged 14.9 pounds per capita during the 1990s--up 17 percent from an annual average of 12.7 pounds during the 1980s. The increase was likely the result of better marketing (e.g. more pre-cut and wrapped product), increased promotion efforts, new smaller varieties better suited to shrinking American household size, surging popularity of seedless melons, and a strong national economy featuring high employment levels. Some of the increase may also be due to rising public awareness of the impact on overall health of including fruits and vegetables in the diet. Although it is possible the bubble of popularity may indeed have burst on the upward trend in watermelon consumption, there is another plausible explanation. In fact, the decline in per capita watermelon disappearance statistics since the 1996 peak of 16.8 pounds may not be a true reflection of consumer demand for watermelon. Instead, it may be a reflection of changes in the type of watermelon demanded-- namely smaller so called icebox melons, including seedless types that have grown very popular during the 1990s. Seedless melons tend to be smaller and lighter than the average seeded variety. As seedless garner a larger share of the watermelon crop, the result may indeed be a reduction in the total weight of watermelon produced, even as the number of melons sold rises. The USDAs production statistics measure the total weight of melons produced (several decades ago, USDA measured the actual number of melons produced). Although this paper does not address this concern, it is likely that watermelon retail sales have actually increased the past few years (as retailers report) but weight-based volume measures, reflecting declining average melon weight, cannot reflect increased eating occasions of individual melons and pre-wrapped melon quarters. Market Share by Location In the CSFII survey, the at home and away from home delineations are based on where a food was obtained or prepared, not where it was consumed. Food at home is generally obtained at a retail store such as a supermarket, grocery store, or a convenience store. Food away from home is generally purchased from foodservice establishments but can also be obtained in such places as school cafeterias, community feeding programs, or child/adult care centers. Both home and away- from-home food can be consumed at or away from home. For example, a bagged lunch prepared at home and consumed at work is classified as home food. A commercially prepared pizza delivered and consumed at home is classified as food away from home. Fast food places include self-service establishments and carryout places; restaurants are places that have wait staff; and school cafeterias include day care facilities and summer camps. The category others is a catch-all category, including such things as community feeding centers, bar/taverns, vending machines, etc. According to the survey, the bulk (85 percent) of watermelon was purchased at retail stores and considered as home foods (table A-2). Away-from-home sources accounted for about 15 percent of the watermelon market during 1994-96. The results were somewhat higher than expected since watermelon is rarely found on fast food menus. However, use in restaurant salad and breakfast bars, plus a very strong institutional presence was responsible for the strong consumption in the away-from-home market. The institutional market includes such places as community feeding programs, residential dining facilities, and child/adult care centers. About 4 percent of watermelon was purchased in standard (non-fast food) restaurants. Like other melons, very little was purchased at fast food establishments or at schools. The school breakfast/lunch program may be a possible future growth market since the survey indicated school-age children generally enjoy watermelon. However, the survey shows that very little (less than 1 percent) watermelon is now consumed through schools, reflecting the historical use of processed fruits and vegetables in the school lunch program. In comparison, among the top three melons, honeydew is most prevalent in the away-from-home market, with 30 percent of servings originating from this side of the market. Cantaloupe use is similar to watermelon with 16 percent purchased as food away from home. Watermelon Use by Region and Urbanization The CSFII data show distinct regional patterns in the consumption of fresh watermelon during the 1994-96 survey period. There are four Census-defined regions--Northeast (20 percent of the population), Midwest (24 percent), South (35 percent), and West (22 percent). The East, Midwest, and South each consume proportionately less watermelon than their share of the national population, although use in the Midwest and East are nearly proportionate to their share of population. As table A-2 shows, on a per-capita basis, watermelon appears to be much more popular (about one-third more) in the West than in the Midwest and East. In the South, although total volume is second only to the West, per capita use of watermelon is smallest of the four regions. Interestingly, much of the growth in demand over the past decade has been in seedless varieties. According to industry sources, seedless watermelon is much more popular in the West (particularly in California) with seeded watermelon heavily favored in the South. Most other areas slightly favor seeded varieties over seedless. About 47 percent of American consumers reside in suburban areas, 32 percent live in metropolitan cities, and 21 percent live in rural areas. Watermelon consumption was strongest in suburban areas, followed distantly by rural sections of the country. This is not surprising given the historical identification of watermelon with summer picnics and barbecues--very popular activities in the suburbs. The greatest variation from the population share occurred in metropolitan areas where per capita use was relatively weak. This weakness may reflect the perceived or real inconvenience in transporting and using larger fruits such as watermelon, particularly in inner city environments. Racial/Ethnic Makeup of Watermelon Consumers Non-Hispanic white consumers represent 73 percent of the U.S. population but only consume 64 percent of watermelon. Thus, on a per- capita basis (market share divided by population share), white consumers had a consumption ratio less than 1. This differs from consumption of cantaloupe and honeydew in which whites are strong consumers. The difference may be the strong consumption of the two so called breakfast melons during the early morning meal. Despite widespread appearance on breakfast bars, most consumers more closely identify watermelon as a dessert melon rather than a breakfast melon. About two-thirds of the category others in the race/ethnic origin table consists of Asians. Thus, it is likely Asian consumers were the top consumers (in terms of per capita consumption) of watermelon, with a ratio nearly 3 times as great as their proportion of the population. Asians are also strong consumers of honeydew melon, but are average consumers of cantaloupe. Black consumers represent nearly 13 percent of the U.S. population yet only accounted for 11 percent of watermelon consumption during the 1994-96 survey period. People of Hispanic descent were also strong consumers of watermelon. Hispanics accounted for nearly 11 percent of the population and reported consuming nearly 13 percent of watermelon. Strong consumption by Hispanics and Asians is potentially important to the industry, as these are two of the fastest growing ethnic groups in the United States. Watermelon Use and Income According to the CSFII survey, there is variability with respect to watermelon consumption and income. Households were classified into three income brackets using the Federal poverty guidelines. The poverty guideline was developed by the U.S. Dept. of Health and Human Services for the implementation of Federal food programs. Some Federal food programs, such as the Food Stamp Program, have used 130 percent of the poverty level to determine eligibility for participation. It is used in this study as the top end of the low- income category. About 39 percent of households had income exceeding 350 percent of the poverty level (called high-income households); 42 percent of households had income falling between 131 and 350 percent of the poverty level (middle-income group); and 19 percent of households had income below 131 percent of the poverty level (low- income). The survey indicated that middle-income consumers are the leading consumers of watermelon. This tends to make sense given the strong consumption seen in the suburbs, typically dominated by middle-income consumers--many with families. Households in the highest income bracket, with income greater than 350 percent of the poverty level, represented 39 percent of the U.S. population and consumed just 35 percent of watermelon. Consumers in the high-income group likely take a greater percentage of their meals away from home. Thus, their exposure to watermelon is somewhat reduced since restaurants account for just 4 percent of the watermelon sold. At the other end of the income spectrum, low-income consumers account for 19 percent of the population and consume just 17 percent of watermelon. Watermelon Consumption by Age and Gender There are distinct watermelon consumption patterns by age. The CSFII data indicated that men and women over the age of 60 consume the most watermelon per capita. This group represents about 16 percent of the population, yet they eat nearly 22 percent of all watermelon. Compared with younger consumers, this may reflect greater attention to the nutritional aspects of their diets. As shown in table A-2, women generally consume more watermelon than males. Women, constituting 51 percent of the population, consumed 53 percent of watermelon. The data also suggest that as women mature their consumption of watermelon increases. Women less than 20 years of age (15 percent of the population) consumed the smallest amount of watermelon per capita. This may indicate that calorie-conscious teen girls still embrace the old mistaken belief that watermelon, because it is sweet, is heavy in calories. In fact, one serving of watermelon (2 cups diced) contains just 80 calories, while also providing 25 percent of the RDA for vitamin C, 20 percent of the vitamin A, 8 percent of the dietary fiber, plus smaller amounts of potassium, iron, calcium, and lycopene. Women between the ages of 20 and 59 eat 43 percent more watermelon per capita than the youngest age group. This could be interpreted to imply that as women mature, they become better educated and more focused on their nutritional intake and gain a greater appreciation for foods such as watermelon. Following this line of reasoning, it is not surprising that the strongest per capita watermelon use for women was found among those aged 60 and over. This group accounts for 9 percent of the population but consumed 11 percent of watermelon. Similar to women, the strongest per capita consumption among men occurred for those aged 60 and over. The survey indicated that per capita watermelon use by this age group was the strongest of all men and women, averaging 20 percent higher than for women of the same age grouping. However, unlike women, per capita use did not rise smoothly with age for men, with the youngest group consuming more than the middle group. Males aged 2 to 19 account for 15 percent of the population and consumed nearly 15 percent of watermelon. Conclusion While much is known about the supply side of the U.S. watermelon market, little is known about the consumer side of the market. In this paper, using data from USDAs CSFII survey we show where and how much watermelon is consumed and link this consumption to consumers economic, social, and demographic characteristics. The important findings in this article include: o The bulk of watermelon were purchased at retail stores and considered as home foods. The institutional market was the strongest among the various away-from-home markets; o Watermelon was heavily favored in the West and consumed about in proportion to population share in the Midwest and East. Per capita use was weakest in the South; o Asian and Hispanic consumers were the strongest consumers of watermelon. Compared with other consumers, watermelon was discovered to be less important in the diets of non-Hispanic black and white consumers; o Per capita consumption of watermelon is strongest among middle- income consumers--about one-fourth stronger than for lower income and upper income consumers; o Women consume more watermelon than men. Men and women 60 and above represent about 16 percent of the population, yet they consume 22 percent of all watermelon. Begin Box USDA Food Consumption Data USDA collects and compiles two major data sets on food consumption in the United States, the Supply and Utilization or food disappearance data, compiled by USDAs ERS, and the Continuing Survey of Food Intakes of Individuals, compiled by USDAs Agricultural Research Service. Both data sets are key components of ongoing Federal efforts to monitor the nutritional health and dietary status of U.S. consumers. They were mandated by Congress under the National Nutrition Monitoring and Related Research Act of 1990. When used together, they provide a comprehensive picture of the Nations eating habits. Food Supply and Utilization Data, also known as food disappearance data, measures the flow of raw and semi-processed food commodities through the U.S. marketing system. They are neither a direct measure of actual consumption, nor of the quantity of food actually ingested. The total amount available for domestic consumption is estimated as the residual after exports, industrial uses, seed and feed use, and year-end inventories are subtracted from the sum of production, beginning inventories, and imports. The use of conversion factors allows for some subsequent processing, trimming, spoilage, and shrinkage in the distribution system. However, the estimates also include residual uses for which data are not available (such as miscellaneous non-food uses and changes in retail and consumer stocks). With data back to 1909 for most commodities, the food disappearance data are useful as indicators of trends over time. The data are most commonly used to measure the average level of food consumption in the country, to show year-to-year changes in consumption of major foods, to calculate the approximate nutrient content of the food supply, to establish long-term consumption trends, and to permit statistical analyses of effects of prices and income on food consumption. Because they include spoilage and waste accumulated through the marketing system and in the home, the data typically overstate actual consumption. A 1997 ERS study suggested that such losses may exceed 25 percent of the edible food supply. Food disappearance data reflect the amount of major food commodities entering the market, regardless of their final use. Final product forms and consumption locations are not usually known, and little or no data exists on supplies of further processed products. In short, relatively good information exists for many food ingredients, but not for foods as actually eaten. For example, the food disappearance data provide a good estimate of the annual per capita consumption of watermelon but provide no information on where watermelon was marketed--supermarket, hospital, school, or restaurant--or what were the socioeconomic characteristics of the consumers that ultimately ate the food. The Continuing Survey of Food Intakes by Individuals (CSFII) measures foods actually eaten by individuals. The survey records food intake over a specific period of time (two non-consecutive days in 1994-96 using 24-hour dietary recalls). The survey collects demographic information, such as household size, income, race, age, and sex, and information on where a food was purchased, how it was prepared, and where it was eaten, in addition to food-intake data. The CSFII provides information for use in policy formation, regulation, program planning and evaluation, education, and research. For example, data from recent surveys have been used to evaluate the impact of food fortification on nutrient intakes, to estimate exposure to pesticide residues and other contaminants from foods, and to target nutrition assistance and education programs to those who need them most. The data are particularly valuable for measuring the effect of socioeconomic and demographic characteristics on food consumption. In addition to intake data, the Agricultural Research Service also provides technical support documents, including recipes and number of servings relative to USDA Food Guide Pyramid (Pyramid) dietary recommendations. For each food, its recipe lists all ingredients and their weights in grams. For a product largely consumed fresh (as is) like watermelon, this is less important. For more complex products like tomatoes, the description of the ingredients can be used to distinguish among food products (e.g., stewed tomatoes vs. spaghetti sauce). The Pyramid serving data show, for each food consumed, the number of servings from 30 food groups. The recipe files and Pyramid serving data together show the number of servings of a product (e.g., fresh watermelon) provided by a food (e.g., a particular meal package offered at a restaurant). The intake data show where and how much of the food was consumed. The 1994-96 CSFII data include a sample weight for each respondent, indicating the number of people the sample represents. The share of watermelon consumed by location can be estimated by calculating the weighted-sum of the product consumed in each location. Similarly, the socioeconomic and demographic characteristics of the respondents can be used to estimate the consumption share of watermelon by these characteristics. END_OF_FILE