Vegetables and Melon Outlook - Feb. 25

From the USDA's Feb. 25 Vegetables and Melon Outlook:

The outlook for fresh vegetables this winter features a 5-percent reduction in acreage and reduced availability of some warm season crops like green beans and sweet corn due to a February freeze in Florida. At the same time, demand is expected to remain soft as consumers spend conservatively. Given supply reductions, the winter price outlook favors higher prices compared with the relatively low levels of a year earlier.

Plentiful supplies, strong world demand, and favorable exchange rates outweighed high domestic prices to nearly double the volume (expressed on a fresh-weight basis) of U.S. tomato product exports to 5.5 billion pounds in calendar 2008—the greatest year-to-year gain since 1973. Tomato paste export volume nearly tripled to a record-high 686 million pounds as tight world supplies focused buying interest on U.S. product.

Reflecting the smaller 2008 fall crop, U.S. potato shipments have been running below year-earlier levels. Fresh market shipments in December and January were down an average of 9 percent from a year earlier. As a result, potato prices remain strong with U.S. prices for all uses in January up 29 percent from a year earlier.

Although sweet potato production was up 2 percent from a year earlier to 18.3 million cwt, preliminary 2008 price estimates of $21.50 reflected high demand. Crop year to date (July-December) sweet potato exports were valued at $22 million, up from $17.7 million during 2007.

Fresh vegetables: The value of production for fresh-market vegetables totaled a record-high $10.4 billion in 2008, up 4 percent from a year earlier. Tomatoes replaced head lettuce (due to higher tomato prices) as the top fresh vegetable at $1.4 billion—up 21 percent from a year ago. Increases for bell peppers (up 26 percent), tomatoes (up 21 percent), and squash (up 17 percent) easily outweighed declines for chile peppers (down 21 percent), romaine lettuce (down 19 percent), and celery (down 17 percent). Fresh-market gross revenue increased just 1 percent to $5.3 billion in California, which accounted for 50 percent of the national value of freshmarket vegetables, compared with 52 percent a year earlier. Production of fresh vegetables generated nearly $1.6 billion in crop value in Florida—up 15 percent from 2007 as higher prices outweighed reduced aggregate production.

Melons: The value of melon production totaled $931 million in 2008—up 17 percent from 2007. Record-high yields pushed watermelon production higher and good demand pulled average prices up, leaving crop value up 17 percent to a record $492 million. Although the value of the honeydew crop fell 8 percent, higher prices pushed the value of the cantaloup crop up 23 percent to $371 million.

Potatoes: According to preliminary estimates, the value of U.S. potato productionrose 17 percent to $3.9 billion in 2008/09. With the season-average farm price rising 26 percent to a record 9.46 cents per pound, revenue rose in most States, with the most notable exceptions being North Dakota and Florida. With both production and price higher, production value surged 53 percent in Colorado and 45 percent in California—two States heavily dependant on the fresh market. Sweet potatoes: The estimated farm value of the 2008 U.S. sweet potato crop was $395 million—up 20 percent to a second consecutive record-high. Although output was up 2 percent, the average price was expected to rise 17 percent, with higher prices boosting value 61 percent in California and 46 percent in North Carolina.