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 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).
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.
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.
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.