| MMM 348 | April 22, 1997 |
Consumption of all fruits and vegetables was estimated to be 722 pounds per capita in 1995. This is up nearly 60 pounds since 1990. By 2005, total per capita consumption is expected to be near 767 pounds. Processed fruits and vegetables account for about two-thirds of this total annual use. For example, frozen potatoes account for 35 percent of the total potato crop. Processing tomatoes comprise 30 percent of the entire vegetable crop (excluding potatoes and pulses). Fresh fruit and vegetable use is expected to increase from 298 pounds per person in 1995 to 313 pounds in 2205.
During the 1997 to a 2005 time frame, fresh vegetable per capita consumption is projected to increase about 1 percent per year. Fresh imports are expected to continue to increase through this period with import penetration rising from 11 percent in 1996 to more than 15 percent in 2005. The projected gain in fresh imports exceeds the expected gains in exports during this period.
Throughout the nineties, demand for fruit products has remained relatively flat. Per capita juice consumption increased about 2.5 percent annually, the fastest growing sector of the fruit industry. Grape and grapefruit juices showed the greatest average annual growth. Most of the increases in grapefruit consumption coincide with an increase in overall production. Total fresh fruit consumption declined during the early nineties with consumption only rising for oranges, lemons and grapes. Processed fruit per capita consumption has increased an average of 1.4 percent annually since 1990-91. In 1995-96, only grape, strawberry, orange and lemon consumption increased among the major processed fruits.
Per capita use of fresh non citrus is expected to show slight increases, while consumption of fresh citrus is projected to decline as we reach the year 2005. Although citrus crops are expected to reach record sizes, large amounts of the fruit will probably be processed into juice, with juice consumption expected to grow. The Florida citrus industry has been stressing the role citrus plays in prevention of heart disease and cancer. How successful the industry-promotional campaign will be at expanding consumption will be a good indicator of what might be ahead for many fruits as more are being studied for their health benefits.
Fresh fruits and vegetable prices have risen faster than processed prices. In fact, between 1986 and 1996 retail prices for fresh fruits and vegetables have risen at a faster pace than all food items (99 per cent versus 41 percent). Strong demand relative to other foods is largely credited for this phenomenon. However, even within the fruit and vegetable industries, fresh prices have risen faster than processed. There are several reasons why this divergence has happened:
Retailers and growers still occasional battle over the prices charged consumers for produce. In times of oversupply, growers want retail prices to reflect fully the nature of supply to move as much of the product as possible to keep their revenue streams up. Retailers argue that they do move prices down to reflect lower wholesale prices. Unfortunately, the relative percentage changes never match because the grower price is generally only a quarter to a third of the final retail price with the remainder made up of marketing services such as transportation, labor and store overhead costs.
Because of the nature of fresh produce prices, marketing margins can vary widely during the year. However, they usually average out over the course of a year. After examining annual and seasonal margins for several fresh vegetables, the USDA noted the following:
Iceberg lettuce, growers received 24.5 percent of the average retail price during 1986-90 compared with 24.9 percent during 1991-95.
