The current fall production area for harvest for the leading fresh-market vegetables in the United States is expected to decline from a year earlier. The production season runs primarily from October through December, and does not include melons.
The fall market is expected to feature reduced volume, sluggish demand, and slightly higher prices, according to the latest USDA Vegetable & Melon Outlook Report.
Fresh-market vegetable acreage (excluding melons and storage onions) is expected to remain in the doldrums during the fourth quarter of 2008. With average yields, market shipments would be expected to decline by about 3 percent from last fall.
Weather has been favorable in the West with good yields expected, while tropical downpours left standing water and delayed planting in Florida and Georgia. California accounts for about 71 percent of the fall fresh vegetable area (excluding melons and onions), while Florida expects to harvest about 20 percent of the fall fresh-vegetable crop.
Growers of six of the 11 surveyed crops are expected to reduce acreage this fall. The largest reductions from a year ago were for snap beans, bell peppers and head lettuce, while sweet corn and tomatoes were the most notable increases.
The decline in bell pepper area is likely a reaction to excess supplies and lower prices received last fall — especially in light of much higher production costs this year — and delayed or prevented planting caused by heavy tropical rains in southern Florida.
Bell pepper acreage was also the same or lower during the winter, spring and summer seasons. This is curious, according to the USDA report, since import volume is up 3 percent so far in 2008 and domestic bell pepper demand appears to be relatively steady.
While some growers may no longer be willing to risk the large investment required to produce, pack, and sell bell peppers, it is more likely that some of the retail demand for field-grown peppers has been supplanted by greenhouse-grown product, which is not currently captured in domestic production statistics.
This is also likely part of the reason that field-grown fresh tomato acreage has been on a declining path the past several years. With an economic recession and consumer belt-tightening looming, some cash-strapped consumers may switch back to lower-priced field-grown vegetables in the year ahead.
Acreage has declined during each of the quarterly seasons in 2008 with the fall season decline following reductions of 6 percent this past summer, 1 percent in the spring and 3 percent during the winter. As a result, annual 2008 fresh-market vegetable acreage is also projected to be lower than a year ago, with melon crops being down by 5 percent and bulb onions being down by 7 percent.
The impact of the sluggish economy on demand was outweighed by reduced acreage during the summer quarter of 2008 (July through September), leaving fresh-market vegetable prices up 2 percent from a year earlier. With market shipments down an estimated 8 percent from a year earlier, prices at the point of first sale (grower or shipping-point) averaged higher for such crops as carrots, cauliflower, celery, onions, snap beans, and sweet corn. September prices for carrots (up 52 percent) and bulb onions (up 146 percent) were easily the biggest gainers from their low levels of a year earlier.
On the other hand, good yields for crops such as tomatoes, broccoli and celery pushed prices lower during September. September movement of cucumbers (fresh and pickling-types) increased 5 percent from a year earlier. Michigan was the leading shipper with 35 percent of September volume, followed by Mexico (24 percent), Georgia (17 percent), New York (13 percent) and Ohio (8 percent).
Imports of greenhouse-produced cucumbers (excluding Mexico) accounted for 1 percent of market volume in September. Shipments of cucumbers grown for pickling accounted for 4 percent of movement, with most of this volume coming from Michigan. In addition to pickles, pickling cucumbers have also gained a small niche in the fresh cucumber market over the past few years.
Despite rising shipments, cucumber retail prices remained steady at 62 cents each in early October. The advertised retail price for cucumbers has remained steady since July. However, an increasing number of stores featured cucumbers in their advertisements in early October, likely reflecting improved market volume.
After an early fall with average volume and relatively favorable prices, the fall market is expected to feature reduced volume and sluggish demand, and higher prices.
With acreage and market volume lower, retail prices moved higher for some fresh-market vegetables in late September and early October. Average advertised retail prices in early October for crops such as onions, bell peppers, sweet corn, iceberg lettuce and squash were running above year-earlier levels.
Driven largely by a weaker U.S. dollar exchange rate, the volume of fresh-market vegetable (excluding melons, potatoes, sweet potatoes, and mushrooms) exports rose 5 percent from a year ago over the first 8 months of 2008 (January through August). Volume increased for commodities such as tomatoes, carrots, cauliflower, sweet corn and leaf/romaine lettuce.
Export volume was reduced for commodities such as head lettuce, celery, cucumbers, snap beans and bulb onions. Fresh vegetable export volume was greater than a year earlier for each month of the year with the strongest year-over-year gain in July (up 11 percent). The gain in 2008 comes after two consecutive weak export periods (January through August) in 2006 (down 7 percent) and 2007 (down 3 percent).
Exports to Canada — which accounted for 76 percent of total fresh volume — were up about 2 percent, while volume sent to Mexico (which accounted for 8 percent of the total) was up 13 percent. Fresh vegetable exports were also higher to the United Kingdom (up 15 percent due largely to sweet corn), South Korea (up 335 percent due to sweet corn), and Japan (up 11 percent due largely to onions and broccoli) during January through August.