July 25, 2002 Consumption Down in 2001, But Likely To Rise in 2002 In 2002, per capita vegetable and melon disappearance (also referred to as use or consumption) is forecast to rise 1 percent to 451 pounds. Increased use of fresh, canning, and freezing vegetables is expected to outweigh reduced use of potatoes and sweet potatoes. Canned and frozen vegetables are expected to rise 2 to 3 percent as the economy improves, output rises, and prices soften. Potato use in 2002 is expected to decline due to higher retail prices most of the year caused by smaller storage supplies from the short 2001 crop. In 2001, per capita vegetable and melon use declined 1 percent to 449 pounds. Fresh-market use (excluding potatoes) was unchanged at 173 pounds while freezing (down 1 percent) and canning (down 3 percent) use were lower. Per capita use of potatoes, the largest vegetable category, likely increased 1 percent to 140 pounds, reflecting lower prices stemming from the record-large 2000 fall potato crop. Highlights in consumption trends from 2001 include: o Record-high per capita use of fresh-market tomatoes, which reached 17.9 pounds. However, processing tomato use reached its lowest point since 1988 as the recession slowed demand for food away from home; o The recession also impacted fresh-market onion use, which declined 1 percent to 18.1 pounds per person despite adequate supplies and low prices; o Fresh-market sweet corn use posted a record-high 9.4 pounds per person, but the canning market continued its long-term decline; o Snap bean use continued to move slowly upward as small gains in fresh and freezing use outweighed reduced canning use; o Despite a small gain in the fresh market, carrot use declined for the fourth consecutive year after posting a record-high in 1997; o Pickling cucumber use may have hit its lowest point since 1952, but fresh use remained stable; o Melon use recovered from a brief slide in 2000 led by increased watermelon and cantaloup use; o Despite the smallest fresh-market use since 1990, per capita potato use increased 1 percent as processing use rose 2 percent. The Census Bureau released the final revised U.S. figures linking the 1990 and 2000 population censuses. The impact of incorporating the final Census 2000 population estimates for 1991-2000 (and beyond) has been to reduce total per capita vegetable use. For example, the estimate of total vegetable per capita use declined by 12 pounds in 1999 as total disappearance was divided into a larger population base. The July 1, 1999, population estimate increased from 272.9 million to a revised 278.9 million. Although per capita use estimates have been trimmed, all familiar long-term consumption trends remain intact. Vegetable Output Declines in 2001 Total U.S. vegetable and melon output fell 7 percent in 2001 due to reduced acreage, cool, wet spring weather in California, and pockets of drought in the upper Midwest and the East. Increased production for dry edible peas (up 8 percent), melons (up 7 percent), sweet potatoes (up 6 percent), and vegetables for freezing (up 4 percent) was outweighed by smaller crops for other aggregate categories-- notably, fresh and canning vegetables. Fresh vegetable production (excluding melons) dropped 1 percent led by double-digit percentage cuts for spinach, bell peppers, garlic, and squash. Canning vegetable production fell 14 percent led by a 15-percent cut in tomatoes for processing. Reduced acreage (down 8 percent) and yields pulled U.S. potato output down 13 percent in 2001, while reduced plantings and drought in Michigan and New York helped drive dry bean production down 26 percent. Fresh Market Prices Up During the first 6 months of 2002, shipping-point (a proxy for grower prices) prices averaged 22 percent above a year earlier as unusually cool winter weather in California and Arizona interfered with the production and marketing of cool-season vegetables like lettuce and broccoli. After reaching record-highs in March led by iceberg lettuce prices of more than $50 per 24-head carton, shipping-point prices declined in April, May, and June as ideal growing weather brought larger supplies into the market. In 2001, shipping-point and retail prices for fresh-market vegetables each increased 5 percent from a year earlier. Most of the gain came during the first half of the year as shipping-point prices averaged 20 percent above a year earlier during January-June and 9 percent lower during July- December. Retail prices were up 8 percent during the first half and up 2 percent during the last half of the year. Price movements generally reflected the pattern of supply and demand in 2001 as bad weather cut first-half production while second-half demand (particularly for away-from-home meals) was reduced by economic uncertainties caused by the recession and the events of September 11. For the year, lower shipping-point prices for celery (down 21 percent), broccoli (down 19 percent), and cauliflower (down 18 percent) were outweighed by higher prices (caused by smaller crops) for carrots (up 33 percent), asparagus (up 20 percent), and sweet corn (up 8 percent). In calendar 2001, the continued strength of the U.S. dollar and weak demand in some key markets allowed the trade deficit in vegetable, melon, and pulse crops to continue expanding. While the value of U.S. exports decreased 3 percent to $3.2 billion, imports rose 10 percent to $4.5 billion. Exports last exceeded imports in 1995. In 2001, U.S. vegetable, melon, and pulse imports from Mexico increased 14 percent, and Mexico’s share of U.S. imports rose from 45 to 47 percent. Mexico had been losing market share to Canada over the past few years, with imports from Canada also rising 14 percent in 2001, driven largely by fresh greenhouse vegetables, frozen potatoes, and canned sweet corn. Canada maintained its 24 percent share of the U.S. vegetable, melon, and pulse import market. With increased shipments of dry beans and canned mushrooms, imports from China increased 15 percent to $150 million--3 percent of the U.S. import market. In 2001, the United States exported about 7 percent of its fresh-market vegetable and melon supplies (production plus imports), about the same as the previous 3 years. On the other side of the ledger, higher domestic prices increased the incentive to export to the United States, with the import share of consumption rising from 14 to 15 percent-- still below 1998’s record-high of 16 percent. Processing Output Down in 2001; Set To Rise in 2002 Processors of five major vegetables (tomatoes, sweet corn, snap beans, green peas, and cucumbers for pickles) have contracted 1.26 million acres in 2002--up 3 percent from the comparable producing States of a year ago. Most of the rise will come from tomatoes, with processors contracting for 10 percent more acres despite generally weak wholesale prices, moderate stocks, and lackluster demand for tomato products. Contract area was greater for green peas (up 3 percent), cucumbers for pickles (22 percent), and snap beans (2 percent). Continued weak wholesale prices prompted processors to cut sweet corn contract area, with area for both freezing (down 6 percent) and canning (down 3 percent) lower. Assuming average acreage losses and trend yields this coming season, output of the five leading processing vegetables could be 12 to 14 percent above a year ago and total nearly 16 million short tons. Output of canning vegetables could rise more than 15 percent in 2002, while output for freezing could decline 3 to 5 percent. Average retail prices for processed vegetables (frozen, canned, and dried) increased 5 percent during the first 6 months of 2002, reflecting reduced canned stocks and higher marketing costs. Green peas: The first estimate of 2002 contract production for processing green peas indicated a 1-percent decline from a year earlier to 380,680 short tons. Estimated area for harvest was about the same as a year earlier, with acreage generally higher in the East and lower in the West. Per- acre yields are expected to fall 2 percent to 1.81 tons per acre--the second consecutive decline from the 2000 record. Green pea production is expected to increase 13 percent in Minnesota, the top producing State and decline 5 percent in Washington--the second leading State. Wholesale prices for both canned and frozen green peas have been running slightly higher over the past year. Tomatoes: The larger tomato crop expected in 2002 follows a 15-percent decline in 2001. Acreage was down 5 percent last year and yields were down 10 percent. More than compensating for the smaller crop was an 87-percent jump in import volume, with sauces accounting for much of the gain. Exports also increased, rising 8 percent to 2.4 billion pounds--7 percent of available supply (production plus imports and beginning stocks). Calendar year per capita use of processing tomatoes declined 2 percent to an estimated 68.7 pounds (fresh-weight)--the lowest since 1988. Sweet corn: Production of processing sweet corn declined slightly in 2001 as canning corn dropped 11 percent, while output of sweet corn destined for frozen products increased 12 percent. Imports of canned sweet corn increased 46 percent, with Canada supplying nearly two-thirds and Thailand about one-third. Imports were record-high in 2001 and now account for about 4 percent of consumption. Exports, the primary market for 20 percent of supplies, declined for the fourth consecutive year--falling 16 percent to the lowest level since 1991. Continued softness in the export market, particularly Japan, is critical to an industry which faces declining long-run domestic demand. In 2001, per capita use of canning corn fell below 9 pounds for the first time in decades. Fresh Output Down in 2001; Summer 2002 Area Stable This summer (largely July-September), fresh-market vegetable and melon area for harvest is forecast to remain about even with a year ago at 324,400 acres. For the most part, increased area for snap beans and head lettuce about offset reductions in crops such as broccoli, cabbage, and sweet corn. Steady summer area follows declines in both winter and spring vegetable area. During the summer quarter of 2001 (July-September), prices received by growers and shippers of fresh-market vegetables and melons averaged about 5 percent above a year earlier. California, accounting for 48 percent of this year’s summer-season vegetable and melon area, increased acreage 1 percent. New York, the second leading summer-season producer, with 13 percent of acreage, expects to harvest 2 percent less area than a year ago due largely to an unusually cool, wet spring which hindered planting. With area up in California (where yields exceed the national average) and at least average yields in Eastern States afflicted by either too much rain (Ohio and New York) or too little rain (Georgia and parts of Texas) this summer, market volume may remain slightly above that of a year ago. As a result, summer-season fresh-market vegetable prices are likely to average below those of the past 2 years. In 2001, fresh-market output (excluding melons) was reduced and prices averaged above those of the previous year. Some of the 2001 highlights for selected crops follow: Head lettuce: Driven by increased acreage, head lettuce production rose 4 percent in 2001. Although still less than 1 percent of lettuce consumption, import volume was up for the third consecutive year--rising 44 percent. Export volume, hampered by the strong dollar and higher domestic prices, rose just 1 percent with 5 percent of supplies exported in 2001. Shipping-point prices rose 1 percent to $17.60 per hundredweight (cwt)--the highest since 1995. Per capita use totaled 24.2 pounds in 2001--up 3 percent from a year earlier and the highest since 1994. Tomatoes: Despite a 4-percent increase in harvested area, field tomato production fell 2 percent in 2001 as per-acre yields declined. After moderating in 1999 and 2000, import volume increased 13 percent to 1.8 billion pounds. Import share of consumption rose from 30 to 33 percent between 2000 and 2001. Although down 3 percent, tomato export volume was still the second highest on record at 398 million pounds. Spurred by increased imports, domestic consumption reached a record-high 5.1 billion pounds in 2001, with per capita use also record-high at 17.9 pounds. Onions: U.S. fresh-market onion production declined 4 percent to 5.8 billion pounds as both area harvested and yield declined in 2001. Imports increased 32 percent to a record-high 639 million pounds--13 percent of domestic consumption. Increased volume was imported from Peru (up 77 percent), Canada (up 74 percent), and Mexico (up 20 percent). Exports declined 6 percent to 719 million pounds as volume shipped to Japan, typically the top export destination, declined 33 percent due to a weak economy and reduced beef use due to food safety concerns. Per capita use of fresh-market onions remained fairly steady at 18.1 pounds--down just 1 percent from a year earlier and 4 percent below the record level set in 1997. Broccoli: Although reduced output in California pulled U.S. fresh-market broccoli production down 4 percent to 19 million cwt in 2001, output was still the third highest on record. For the seventh consecutive year, import volume crept higher--rising 3 percent to account for 7 percent of consumption. The U.S. remains a net exporter of fresh-market broccoli despite a 12-percent drop in volume from the unusually strong exports reached in 2000. Despite a 19- percent decline in shipping-point prices, per capita use fell for the second consecutive year--dropping 3 percent to 5.8 pounds, still the third highest on record. Output of Potatoes, Pulses, and Mushrooms Expected Higher in 2002 Potatoes: U.S. fall-season potato growers expect to harvest 5 percent more acres in 2002. Harvested area is expected to be higher for the top two States, Idaho (up 7 percent) and Washington (9 percent), but lower for Minnesota (down 4 percent) and for the third leading producer, Wisconsin (down 5 percent). California’s fall acreage is up 240 percent, recovering from the shutoff of irrigation water in the Klamath basin last year. During the March to May period, when most fall-season potatoes were being planted, U.S. shipping-point prices for all potatoes averaged $9.18 per cwt, 74 percent above a year ago. Reflecting higher potato prices at planting time, summer- season potato growers expect to increase harvested area about 3 percent this year. With per-acre yields expected to be 1 percent lower, summer potato production is expected to rise 3 percent. The summer crop typically accounts for close to 4 percent of all potato production, with Texas, California, and Colorado the leading States. In 2001, lower harvested area (down 8 percent) and a 6- percent drop in per-acre yield left total U.S. potato production down 13 percent to 445 million cwt--the smallest potato crop since 1993. Total domestic potato shipments (fresh, seed, chipping) declined 6 percent from a year earlier during calendar 2001 and have been running below a year earlier so far in 2002. With higher prices in the U.S. market, import volume of fresh-market potatoes (excluding seed) from Canada increased 42 percent from last year’s low levels. The volume of frozen potato imports from Canada continued to climb to another record-high, rising 14 percent from a year earlier. The preliminary season-average farm price received for all 2001-crop potatoes was estimated at $6.60 per cwt, up 30 percent from the previous season. Sweet potatoes: Despite slightly higher prices in 2001, U.S. sweet potato growers expect to harvest 2 percent fewer acres this fall. Louisiana and Mississippi will account for the majority of the reduction while industry leader, North Carolina, increased acreage 3 percent. If 2002 yields come in around the average of the past 5 years (152 cwt/acre), U.S. production could decline 3 to 5 percent from a year ago. Lower production in 2002 could keep sweet potato per capita use just below last year’s level of 4.3 pounds. In 2001, sweet potato production increased nearly 6 percent as improved yields in many States outweighed a 1-percent cut in harvested area. Although trade has traditionally played a minor role in the industry, export volume has been steadily rising since 1989, with 3 percent of supply now being shipped to other nations. Dry beans: In 2001, lower dry bean plantings and drought losses reduced area harvested 23 percent to 1.24 million acres, the lowest since 1983. With yields down 4 percent, dry bean production fell 26 percent to 19.5 million cwt. With the exception of garbanzo, blackeye, and pink beans, production was lower across all dry bean classes. With output down, stocks for most classes dwindled and grower and dealer prices rose. The large rise in prices (25 percent and more) during the past marketing year encouraged dry bean growers to increase planted area 30 percent in 2002. With better weather and reduced acreage losses expected this summer, harvested area could rise 40 percent from a year ago. Given this area plus trend yields, production could rise 45 percent this fall. Harvested area is expected to be up in most major States, including North Dakota (75 percent), Minnesota (38 percent), and Nebraska (18 percent). Harvested area in Michigan is expected to double as the State recovers from devastating drought losses of a year ago. As in many other Western States, acreage in Colorado is expected to decline 14 percent as a result of a season-long drought making dryland production impractical on the western slope of the Rockies and stressing irrigation supplies for growers in the northeastern portion of the State. With few exceptions, national production is expected to increase for most bean classes, including navy, pinto, and black. During the first 6 months of 2002, grower prices for dry beans averaged 65 percent above a year ago and were the highest since 1990. Dry bean export volume over the first 5 months of 2002 was down 9 percent from a year earlier. Before recovering in May, volume during January to April had been the lowest since 1977. Among the major export markets, reduced volume was shipped to France (down 58 percent), Italy (down 68 percent) and the United Kingdom (down 32 percent) but was partly offset by rising sales to Japan, Mexico, and Canada--each up 20 percent. Dry peas and lentils: In 2001, drought and irrigation water shortages in the Pacific Northwest reduced yields and production of lentils (down 10 percent) and dry green peas (down 9 percent). Larger planted area offset a small yield reduction to push dry yellow pea production up 25 percent. Output of yellow peas has been increasing with expansion of the dry pea industry in the upper Midwest and now accounts for about a third of dry pea production. Season-average prices for both dry peas (down 12 percent) and lentils (down 4 percent) were lower in 2001 and were also low relative to historical trends. These crops are now covered by a new marketing loan program under recently passed Federal farm legislation (see the June Vegetables and Melons Outlook for more details). Planted area for all dry peas is up 28 percent in 2002, while lentil area is down 5 percent. With improved moisture conditions, yield and output for both are expected to rise. Mushrooms: In the 2000/01 mushroom season (July-June), total U.S. mushroom sales declined 2 percent to 853 million pounds. 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. Sales of certified organic mushrooms totaled 8.5 million pounds, down 27 percent from a year ago. Organic output accounts for about 1 percent of all mushroom sales. 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. Printed copies of the Vegetables and Melons Yearbook will be available in about 4 weeks. For further information contact Gary Lucier 202-694-5253. The Yearbook tables can be accessed from the ERS web site in both .xls and .pdf formats using the following link: http://www.ers.usda.gov/publications/vgs/ 2 1