Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Tuesday, December 26, 2006

The 2.5% solution

Skip the palm reader. Here's your future, and it's partly cloudy. The USDA Economic Research Service predicts that the the production value of U.S. horticulture crops - fruit, tree nuts, vegetables, melons, mushrooms, greenhouse and nursery - is forecast to grow at an average 2.5% pace from 2007 to 2016. At the same time, horticultural imports will grow at a 3.8% clip, the agency said
From a value of $50 billion in 2006, the USDA predicts the value of those U.S. horticultural crops will rise to more than $63 billion by 2016. The price forecast includes a 0.9% gain in yearly production volume and an average 1.7% inflation rate. The USDA isn't counting on big gains in per capita consumption, as the production gains coincide with expected increases in the U.S. population. By 2016, U.S. fruits and nuts will account for $22 billion, vegetables and melons $20 billion and $21 billion for greenhouse and nursery crops. The ERS says that fruit and tree nuts will grow the fastest in value, while citrus fruit and processed and fresh market vegetables will face strong import competition. The USDA reports that fresh market vegetable import value has grown at a whopping 10% annually for the past decade.
The value of U.S. horticultural crops exported will increase from 33% in 2006 to about 38% in 2016, driven largely by fruits and nuts. In 2006, the export value of fruits and nuts was a surprising 46% of total production value, up from 40% in 2005
For me, the real eye openers are the import projections. The USDA said that about 49% of the value of fruits and nuts consumed in the U.S. will be imported during 2007 to 2016. For vegetables, the import share of domestic consumption is forecast to rise from 35% in 2006 to 41% in 2016.
This projection from the USDA shows with sobering clarity that U.S. producers need more support from the federal government to meet the long term food needs of U.S. consumers.

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