The U.S. winter fresh-market vegetable and melon area for harvest, which covers January through March, is expected to decline by 3 percent from that of a year earlier, according to the USDA's latest Vegetables and Melons Outlook. This estimate does not include onions.
Yields in Florida were likely trimmed by bouts with cold, wet, windy weather, while crops in the California and Arizona desert area experienced several frosty mornings, but nothing close to the severe freeze of last winter.
Despite lower acreage and variable yields, the volume of shipments for the leading fresh-market crops rose from the freeze-affected year-earlier levels during January. With soft demand and steadily rising imports, winter season shipping-point prices for fresh-market vegetables are expected to average well below the freeze-affected highs of a year ago.
An early crop intentions report indicated that California tomato processors intend to contract for 2 percent fewer processing tomatoes than last year's near record-high.
Processors likely will offer higher contract prices this year to entice growers to battle a projected water shortage and higher production costs and to simply forego planting higher priced alternative grain crops.
The value of production for fresh-market vegetables totaled a record-high $10.9 billion in 2007, up 2 percent from a year earlier. Head lettuce replaced tomatoes (due to lower tomato prices) as the top fresh vegetable at $1.4 billion — up 31 percent from a year ago. Increases for garlic (up 43 percent), squash (up 2 percent), and snap beans (up 22 percent) outweighed declines for tomatoes (down 21 percent), onions (down 21 percent), and leaf lettuce (down 17 percent).
Fresh-market revenue increased 5 percent to $5.9 billion in California, which accounted for 54 percent of the national value of fresh-market vegetables, compared with 52 percent a year earlier. Production of fresh vegetables generated $1.3 billion in crop value in Florida — up 4 percent from 2006 as aggregate production rose.
The value of melon production totaled $871 million in 2007 — down 1 percent from 2006. Watermelon production squeezed past the 1996 record-high while good demand pulled average prices up, leaving crop value up 9 percent to $476 million.
Meanwhile, the value of both the honeydew melon (down 7 percent) and cantaloupe (down 11 percent) crops declined due mostly to weaker prices.
Largely because of stronger contract prices for most crops and a near-record large tomato crop, the value of production for processing vegetables (excluding dual use crops) jumped 20 percent to $1.6 billion. The value of the processing-tomato crop surged 28 percent to $902 million as both production and average plant-door price increased.
In a turnabout from the strong prices of a year ago, shipping-point prices for fresh dry bulb storage onions remain among the lowest in decades. In January, onion prices measured at the point of first sale (similar to the shipping-point price) averaged 3.85 cents per pound, down 83 percent from the lofty highs reached a year earlier.
The major differences in the 2007/08 market from a year ago are the larger U.S. crop this past fall and a return to normal U.S. export volume to Mexico this season. A year ago, heavy export demand from Mexico pushed prices (unadjusted for inflation) to record-high levels with the peak of 55.2 cents per pound reached at the end of the storage season in April.
In 2006/07, U.S. onion export volume shipped to Mexico surged to three times normal during the September-April period. This year, volume is running at more normal levels and good crops in other onion-growing countries have limited U.S. export opportunities elsewhere this season.
Availability of the bountiful 2007/08 storage crop may extend into the spring onion season, weighing down starting prices for the spring crop in April and May. The domestic spring onion crop will account for about four pounds of the estimated 20 pounds of onions that the average American is expected to consume in 2008.
Forecasts of 2008 area planted to spring-season onions indicate a 5-percent decline from a year earlier to 32,000 acres. Most of the decline was in Texas this season as some growers decided to take advantage of higher prices for most grain crops.
Texas area is down 16 percent from a year ago and 41 percent less than the highs experienced in 2006. Spring onion growers in Georgia, Texas, California and Arizona may experience lower opening prices than a year earlier when spring onion prices started and stayed strong, eventually averaging 83 percent above the lows of 2006.
With dry conditions into December, Georgia growers were delayed in transplanting spring onions and are expected to plant fewer acres. Both California and Arizona reportedly increased plantings.
Given the expected decline in Texas onion area, Georgia growers will have the most planted area this year. The crop is in generally good condition in all growing areas, with few weather or disease problems noted. This also applies to the Mexican white onion crop that will be exported to the United States this spring.
The winter fresh-tomato market picked up where the fall season left off, with prices running above average. Weather and acreage reductions continue to cause havoc in the tomato market. A combination of lower acreage in both the United States and Mexico, the January frost in southwestern Florida, and cool, wet weather in Mexico have kept shipping-point prices for fresh-market tomatoes elevated.
In Florida, winds and freezing temperatures reached down into the Gulf Coast vegetable areas around Immokalee on Jan. 3. Tomato fields further south in Dade County were not affected. Reported damage ranged from total loss of plants to loss of blooms and fruit scarring. Given the 9-percent reduction in field tomato acreage this winter, crop losses from the frost and sluggish import volume further strengthened an already elevated market.
Although easing in early February, shipping-point prices for field-grown tomatoes have largely remained above average since October when cool, wet weather and reduced acreage led to chronic supply inconsistencies.
Despite improvement in supplies in late January and early February, mature-green tomato prices were still averaging around $12 per 25-pound box — about 20 percent above the relatively strong levels of a year ago.
However, the loss of tomato plant blooms to the January frost could manifest itself temporarily in lower shipments and continued strong grower prices through late February since blooms were lost that would have been maturing into marketable fruit for this market window.