Vegetables and Melons YEARBOOK – Summary July 21, 2005 July 2005, ERS-VGS-2005s Approved by the World Agricultural Outlook Board ----------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. In addition to this summary, the complete report is also available electronically. ----------------------------------------------------------------- Potato Acreage Record Low in 2005 U.S. potato growers planted an estimated 1.11 million acres in all four seasons--the lowest since records began in 1866. Fall- season potato growers expect to harvest 955,700 acres, down 7 percent from a year earlier and the lowest since 1957. Harvested area is expected to be lower for most major fall-producing States, including Idaho (down 7 percent), Washington (down 3 percent), North Dakota (down 15 percent), and Colorado (down 10 percent). During the March to May period, when most fall-season potatoes were being planted, U.S. shipping-point prices for all potatoes averaged $6.37 per hundredweight (cwt), less than 1 percent below a year earlier but 8 percent below 2 years ago. Because of a continued stretch of low potato prices and industry efforts to limit acreage due to lackluster potato demand, summer- season potato growers expect to harvest 9 percent fewer acres in 2005. This follows an 11-percent reduction in potato area during the spring season. With per-acre yields expected to be 3 percent lower this summer, the summer potato crop is expected to decline 12 percent. The summer season typically accounts for about 4 percent of the annual U.S. potato crop, with Texas, California, and Missouri the leading States. In 2005, total per capita vegetable disappearance (also referred to as use or consumption) is forecast to remain near that of a year earlier. The current forecast indicates increased use for melons, dry beans, and freezing vegetables, with declining use expected for fresh-market vegetables, canning vegetables, potatoes, and sweet potatoes. Per capita fresh-market vegetable disappearance is expected to decline about 1 percent as rising use of spinach, garlic, and leaf and romaine lettuce is outweighed by potential reductions for onions, iceberg lettuce, and carrots. Assuming favorable weather and demand into the fall, consumption of fresh sweet corn and leaf/romaine lettuce could again approach record-highs in 2005. With strong romaine shipments over the remainder of the year, per capita use of leaf and romaine lettuce could exceed the record-high 12 pounds reached in 2004. Although production was likely down in Florida and Georgia this year, domestic fresh-market sweet corn disappearance could still remain near last year’s record high with good volume from California and expectations for improved output in New York, where yields were low in 2004. Last season’s low onion prices have caused storage onion producers to pull back on acreage this year. Given lower production in 2005, f.o.b. shipping-point prices will improve and per capita use of fresh-market onions will likely drop below the 2004 record high. A rebound in use is expected for dry edible beans in 2005 as increasing production, higher imports, and smaller exports offset the effects of low beginning stocks. During the first 6 months of 2005, f.o.b. shipping-point prices (a proxy for grower prices) averaged 11 percent above a year earlier as higher prices during the spring quarter (April-June) outweighed lower prices during the winter quarter (Jan.-Mar.). During the winter quarter, shipping-point prices declined 5 percent from a year earlier as periods of cool, rainy weather were brief enough to have little effect on yields and shipment volume coming out of the California/Arizona desert and Florida. However, the rainstorms did affect the timing of spring-crop planting and the accompanying cool, windy conditions persisted into the spring, resulting in delayed harvests and reduced yields. Crops in Mexico were also affected, with the weather causing shipments of fresh-vegetables to the United States to decline from a year earlier. As a result, supplies of all fresh vegetables in the United States during the second quarter were reduced, resulting in shipping-point prices averaging 28 percent above the low levels of a year earlier. Processors of five major vegetables (tomatoes, sweet corn, snap beans, green peas, and cucumbers for pickles) have contracted 1.22 million acres in 2005--down less than 1 percent from the comparable producing States of a year earlier. Contract production accounted for 97 percent of the output of the five leading processing vegetables last year. Canneries, which account for two-thirds of all processing vegetable area, have contracted for 1-percent fewer acres than a year ago. Area for tomatoes, the largest single processing vegetable, will be 8 percent smaller than a year ago due to higher carryover stocks and lackluster wholesale prices. Given average yields, total production of the five leading canning vegetables is expected to decline from the 15.0 million short tons of 2004. For processors of frozen vegetables, contract area is forecast to decline 2 percent from year-earlier levels as lower sweet corn and green pea plantings outweigh an 8-percent gain in acreage for snap beans. Given average yields, contract production for the three leading vegetables for freezing is expected to decline 1 to 3 percent from the 2.1 million short tons produced in 2004. Assuming average acreage losses and yields hovering near the mean of the previous three seasons, total production of the 11 selected processing vegetables could decline 6 to 10 percent from the 17.8 million short tons harvested in 2004. The majority of the decline in processing output this year will likely stem from the expected reduction in California tomato production from last year’s near-record levels. Average retail prices for all processed fruits and vegetables increased just over 2 percent during the first 6 months of 2005, reflecting higher packaging, transportation, and marketing costs. The first estimate of 2005 contract production for processing green peas indicated a 3-percent decline from a year earlier to 394,070 short tons. Estimated area for harvest was down 1 percent from a year earlier. Per-acre yields are also expected to drop 3 percent to 1.88 tons after also declining a year earlier (yields were record high in 2003). Reduced output in Washington (down 23 percent) and Oregon (down 35 percent) is expected to outweigh a 12-percent gain in Minnesota (the top producing State) and a 33- percent jump in Wisconsin. Wholesale prices for canned peas over the first 6 months of 2005 are averaging about 2-percent below a year ago, while prices for frozen green peas have been running about 2-percent above the same time a year earlier. This summer (largely July-September), fresh-market vegetable (excluding melons) area for harvest is forecast to rise less than 1 percent from a year earlier to 305,400 acres. For the most part, increased area for broccoli, tomatoes, and sweet corn will outweigh reductions for crops such as head lettuce, cauliflower, and cabbage. This small gain in summer area follows a decline in spring vegetable area. Although vegetable area is up slightly this summer, melon area for harvest is expected to drop 2 percent, with increased honeydew area (up 7 percent) being outweighed by lower area for watermelon (down 3 percent) and cantaloup (down 5 percent). Although total watermelon area is down this summer, the seedless watermelon category continues to dominate shipments, with seedless now accounting for nearly three-fourths of the movement of all domestically-grown watermelon. Growers in California, accounting for 46 percent of this year’s summer-season vegetable and melon area (down from 47 percent a year earlier), reduced acreage 2 percent. New York, the second leading summer-season producer, with 17 percent of acreage, expects to harvest 7 percent more area than a year ago, due largely to a 14-percent increase in sweet corn acreage. With U.S. fresh-market area little changed from last summer, average yields will leave supplies near the relatively strong volume of July- September 2004. Assuming continued strong economic activity and attendant demand, summer-season fresh-market vegetable prices are also likely to average near the relatively strong levels of the past year. During the summer quarter of 2004 (July-September), prices received by growers and shippers of fresh-market vegetables and melons averaged just 2-percent below the record highs experienced during the summer of 2003. In 2005, U.S. dry bean growers expect to harvest 1.57 million acres--29 percent greater than a year earlier. Planted area increased 24 percent in response to strong dry bean prices, low carryover stocks, and less attractive prices and revenue streams for alternative crops. With only a few exceptions, production is expected to increase for most classes, and prices are expected to weaken into the fall. However, prices for most bean classes are not expected to collapse because the increase in 2005 production is likely to be about sufficient for use over the coming season, with carryover stocks again expected to be relatively low coming into the 2006/07 season. According to U. S. Department of Agriculture estimates, 2005 dry pea (largely green and yellow) planted area jumped 52 percent to 804,000 acres, while Austrian winter pea area increased 23 percent to 37,500 acres. Most of the surveyed increase in dry peas will occur in Montana (up 99 percent) and North Dakota (up 71 percent), with plantings expected to be lower in the Pacific Northwest. Area planted to lentils rose 30 percent this year to 450,000 acres, led by Montana (up 118 percent) and North Dakota (up 30 percent). With relatively favorable weather pointing toward average yields or better, production will again be up substantially for both dry peas and lentils. The new larger crops will add to substantial existing carryover stocks (stored in all positions as of June 1) of 3.2 million cwt for dry edible peas, 1.3 million cwt for lentils, 175,000 cwt of Austrian winter peas, and 26,000 cwt of small chickpeas.