| MMM 346 | April 22, 1997 |
The USDA reports that vegetable receipts in 1997 will likely increase. Vegetable and melon receipts are expected to exceed $15 billion by the year 2000. This is a slight rebound from 1996's lower cash receipts due to lower prices for most processing vegetables, potatoes and dry edible beans.
Grower returns for most fresh vegetable crops are expected to be higher than in 1997. Grower vegetable receipts in 1996 averaged 10 percent below a year earlier due to strong domestic production and high import levels. Lower expected plantings in 1997 will help to strengthen prices and push grower gross returns higher.
The U.S. now imports about 11 percent of total fresh vegetable supplies. Mexico is the major foreign supplier. During 1990-1994, imports accounted for 8 percent of fresh vegetable supply. Import penetration is strongest for eggplant (43 percent), cucumbers (37 percent), and asparagus (35 percent). The most rapid growth over this period (37 percent) has been in tomato importation.
OUTLOOK FOR SELECTED VEGETABLES
TOMATOES: Tomato production is under going a major
change. Improved vanities of tomatoes (grown primarily in Mexico today) are
encouraging major retailers to purchase supplies from Mexico during the winter
months pressuring Florida growers' prices received and profit levels. The
playing field for most winter vegetables is under siege and it is not likely
that a solution will be readily forthcoming.
But, despite this battle between Florida and Mexican growers and the freeze this year in Florida, tomato prices are expected to average only modest gains across the marketing channel. Retail prices averaged $1.21 per pound in 1996, up 5 percent from 1995 levels. The demand is there in 1997, weather likely will determine what price producers receive and customers pay for their tomatoes this year.
LEAF AND ROMAINE LETTUCE: Leaf and romaine lettuce
crops now makes up about 25 percent of the total lettuce market. This change
in market shares, away from iceberg lettuce reflects consumer interest in
trying new foods. Production of these lettuce varieties has increased more
than 70 percent in the 1990's with 1996 productions up 43 percent more than
1995. Exports to Canada have also helped this market to grow in the 1990's.
Output levels are expected to continue to grow in 1997. This will likely
pressure market prices keeping them near 1996 levels.
BELL PEPPER: Consumption levels of bell pepper have increased from
3.9 to 6 pounds per capita over the last decade. It is expected that it will
continue to increase as consumer interest in pizza and salsa expand. The
import share of the bell pepper market continues around 18 percent but, with
Mexican expansion in winter vegetable production their share is likely to
increase. Prices in 1997 may be slightly higher, than in 1996, due to lower
plantings.
ONIONS: Onion consumption has mirrored that of bell pepper. Also
favored for health and nutritional claims, per capita use on onions averaged
16.5 pounds in the 1990's compared to 13.4 pounds in the 1980's. Lower
plantings for this season will likely cause slightly higher prices for the
1997 onion crop.
WATERMELON: After years of decline, watermelon has again been found
by the consuming public. A combination of new varieties, including seedless
varieties, and strong industry promotion efforts pushed watermelon consumption
in 1996 to the highest level, since the late 1950's. But, production is
expected to decline slightly in 1997 due to poor prices in 1996.
Over the coming decade, fresh vegetable and melon output is projected to
continue a slow steady growth rate. This level of growth is expected to be
the norm in the long-term for the industry.
