AN ECONOMIC ASSESSMENT OF BROCCOLI Executive Summary The U.S. produced about 12 million cwt of broccoli annually between 1988 and 1993, of which 82 percent was destined for fresh-market use. Although the USDA reports acreage and production for only California, Arizona, Oregon, and Texas, broccoli is widely grown in the United States. The Census of Agriculture reported 46 states having farms with broccoli production in 1987, and ad hoc disaster assistance data indicate that payments were made for broccoli in 43 states between 1988 and 1993. Broccoli is a relatively new vegetable for many Americans. The per capita use of fresh and frozen broccoli increased from an estimated 1.5 pounds (farm weight equivalent) in 1970 to 5.1 pounds in 1993. Per capita use has remained relatively constant or declined slightly since the peak per capita consumption of 6.2 pounds was reached in 1988. Although broccoli prices follow a fairly well-defined seasonal pattern, they can vary substantially from month to month. They are generally lowest during May, June, and July, and highest during December. The lowest prices occur when supplies from central California are at a high level and states in the South, East, and Midwest are shipping broccoli. Prices rise throughout the Summer and Fall and usually peak during December. The U.S. Census of Agriculture reported 2,821 farms with broccoli sales in 1987, an increase of more than 200 farms above the 1982 level. The relative stability in the number of farms, combined with a 25 percent increase in broccoli harvested acreage over that period, reflects the growing popularity of broccoli in the American diet. Off-farm employment is not an important source of income diversification for farmers growing broccoli. According to the 1987 Census, more than three-fourths of the operators on farms growing broccoli reported that farming was their main occupation and over half reported no off-farm work in 1987. Of the 45 percent of the operators who reported at least one day of off- farm work, the majority operated small farms. Broccoli is grown in at least one part of the U.S. at any given time of the year. California, for example, markets fresh broccoli throughout the year, and accounts for 90 percent of U.S. production. Arizona and Texas, also large broccoli-growing states, each produce during the Fall and Winter. Northern states, such as Oregon, Michigan, and Maine, produce for the fall market only. Some mid-latitude states, including Virginia and North Carolina, produce a spring crop and a fall crop, while several Midwestern states produce during the Summer and Fall. Broccoli is a cool-season crop. Most cultivars produce the best- quality heads during cool weather, and only a few are productive at temperatures above 85o F. Broccoli grows best on well-drained soils with good moisture-holding capacity, with loams, clay loams, and muck soils ideal for production. Broccoli is customarily direct-seeded in the field. However, young broccoli plants are increasingly transplanted in order for growers to harvest earlier in the season and to utilize land to the maximum. In California, for example, transplanting can cut at least 15 days off the field-growing period and allows some growers to harvest three crops per year. Broccoli needs a steady moisture supply. The large leaves of the broccoli plant lose moisture at a fast rate, leading quickly to drought stress. The equivalent of 1 to 2 inches of rainfall per week is required for successful broccoli development. Nationally, 94 percent of U.S. broccoli harvested area was irrigated in 1987. Virtually all broccoli is irrigated in Arizona, California, and Texas; far less is irrigated in Michigan, New York, and Maine. Broccoli is normally ready for harvest 45 to 60 days after transplanting or 60 to 75 days after direct seeding. Broccoli is harvested by hand-cutting the heads from the stalk. Although mechanical harvesting is available, it is not used because the heads do not mature uniformly enough to cut all plants in one pass through the field. After the primary head has been cut from the plant, side shoots or secondary heads develop. These secondary heads are not usually harvested unless market prices are exceptionally high. The natural perils that would be most likely to result in indemnities under a broccoli policy include excessive rain, excessive heat (which can cause heads to over-mature), extreme cold, and drought (in the generally non-irrigated Midwest and Eastern states). Growers generally report that they can cope with insect perils by following prudent pest management practices. Various diseases, particularly rots, can cause significant yield losses. Ad hoc disaster data can be used to indicate which broccoli- producing areas received large payments relative to their acreage. NASS does not report broccoli acreage in Illinois and Wisconsin, although those states accounted for an average of 11 to 12 percent of U.S. ad hoc disaster payments made for broccoli between 1988 and 1993. Similarly, NASS data indicate that Texas accounted for a relatively large share of payments. In contrast, Arizona and California collected a small share of ad hoc payments. Insurance issues addressed in this report include the setting of reference prices, estimating "appraised production," moral hazard, and the demand for insurance. Our research suggests that the demand for a broccoli policy would likely be higher in states in the Midwest and East, and in Texas, than in Arizona and California. A limitation to offering broccoli insurance in the eastern states is the lack of sufficient acreage in any one county to justify offering a crop insurance policy. Except for Aroostook County in Maine and Cameron and Hidalgo counties in Texas, very few counties in the eastern states have 500 acres or more of broccoli. Most have less than 100 acres.