USDA Fruit and Tree Nut Outlook

From the USDA ERS - Fruit and Tree Nut Outlook Report


USDA’s National Agricultural Statistics Service (NASS) forecasts the 2009/10 U.S. citrus production at 10.9 million tons, down 9 percent from last season and down 15 percent from
two seasons ago. Only tangerine production is forecast higher than last season. Although total orange production is forecast down, California’s production of fresh-market oranges should be ample and are reported to be of high quality. While bigger than last season, California’s navel orange crop is likely to be below average for 2000-09. The high quality of the fruit and the smaller than average crop size is likely to result in strong grower prices this season.

Florida’s orange crop is forecast down from the previous two seasons and may be the smallest since the frost-damaged crop in 1989/90, except for the hurricane-damaged crop in 2005/06. Weather played a factor is the smaller crop as did the continued decline in bearing trees. Since an average of 95 percent of Florida’s oranges go to making juice, the smaller crop is forecast to drive orange juice production down to the second lowest level since 1990/91. Large juice stocks entering the new season, however, should provide for sufficient supplies to meet
market demand.

Grapefruit production is forecast down in the three major-producing States—Florida, Texas,and California. With lower grapefruit production out of Florida, grapefruit juice production is also expected to be down this season. Overall supplies are expected to be tighter than last season, potentially driving up retail prices.

California’s lemon crop, while expected to be smaller than last season, should be about average size and enough to meet consumer demand. California’s tangerine/mandarin production continues to grow as more acreage comes into production. Florida’s tangerine production is also expected to be higher than last season, returning to a more-average quantity. U.S. pecan trees are on their “on cycle” this year and production is expected to be higher than last year, but lower than 2 years ago, the last on-cycle. With production expected to be higher prices will likely be down.

NASS forecast the U.S. 2009/10 grapefruit crop at 1.2 million tons, down 9 percent from last season and the fourth consecutive season of declining production (table 6). If realized, this season’s crop would be the smallest since the Florida hurricane reduced crop in 2004/05. Florida’s crop accounts for 70 percent of total U.S. grapefruit production, with Texas and California producing the remainder. Prior to the hurricanes of 2004/05 and 2005/06, Florida’s production averaged about 80 percent of the U.S. total.

Florida’s grapefruit crop is forecast to reach 842,000 tons, 9 percent lower than last season. Adverse weather factors, declining acreage, and a lower than average fruit set per tree all contributed to the production decline. Production is expected to be higher this season in the Indian River production area, the biggest grapefruit production area of the State, but down in the Southern and other production areas. Shipment began a few weeks later in the Indian River area this season over last, with Florida’s Citrus Administrative Committee (FCAC) reporting only about a third of the quantity shipped compared with last year through the first of November. For the whole State, fresh shipments were running behind last season through this time period, but were higher than in 2007/08. Shipments have been down so far to both domestic and export markets. Due to the lack of available fruit early in the season, the FCAC is reporting free-on-board (f.o.b.) prices for both white and red seedless grapefruit averaging between $3.50 and $5.00 per 4/5 bushel box higher this season over last. Higher prices are likely to persist, both at the grower and
consumer levels this season, in response to the smaller supply.


Texas’ fresh grapefruit crop is forecast down 4 percent this season from last, partially due to high temperatures and drought conditions throughout much of the summer. Although rains arrived in September, the summer’s weather contributed to a late start to the harvest this season. According to AMS shipment data, as of November 8, Texas’ grapefruit shipments were about 85 percent of the quantity shipped during the same period last season. Domestic shipments were behind last season, but exports were slightly higher.


Tangerine and mandarin production is forecast to reach 509,000 tons for the 2009/10 season, 14 percent more than last season, but 3 percent less than 2 seasons ago (table 9). Florida’s production is forecast to increase 27 percent, but much of that increase is due to a return to more average quantities after adverse weather factors in the second half of last season’s tangerine harvest reduced the quantity of late-season Honey tangerines. California’s production is forecast to increase 5 percent, as its mandarin industry continues to grow, with more acreage producing
commercial-sized crops. For the 2009/10 season, NASS’ California field office reports that there are 30,000 acres of tangerine/mandarin trees bearing commercial crops, up 11 percent from last season. In fact, the tangerine/mandarin acreage was the only citrus acreage to increase this season. Arizona’s production is forecast to increase the most of the three States, however, its production is very small relative to California’s and Florida’s. Higher than average fruit set per tree accounts for Florida’s increased production this season. NASS’ Florida field office reports there has been a decrease in the number of bearing trees for all of Florida’s major tangerine varieties—Fallglo, Sunburst, and Honey. Florida’s tangelo production (which is counted separately in
Florida but included with the tangerine/mandarin forecast in California) is forecast down 13 percent this season, with both the number of bearing trees and the fruit set per tree down.
AMS shipment data show Florida tangerine shipments picking up during the first week of November. Due to a slow start at the beginning of this season, however, total shipments through November 8 were only slightly more than half the quantity shipped the same time last season. The bad weather that hit Florida last season, reducing the tangerine crop, occurred later in the season and mostly affected supplies of later-variety Honey tangerines, and did not impact tangerine supplies this early in the season.

California produces numerous varieties of mostly mandarins, including satsumas at the start of the season, followed by several varieties of clementines and murcotts, these last varieties account for most of the growth in acreage. By the beginning of November, satsuma shipments were reported to be underway, but it was still too early in the season for data on murcotts or clementines. Tangelo shipments do not get fully underway in both California and Florida until the winter months.

Fresh tangerine/mandarin prices are likely to be strong out of California this season as its industry continues to grow and its markets continue to expand. As supplies increase, the industry will be able to market these crops more aggressively in more tates, increasing grower returns. Consumers have shown strong preferences for mandarin varieties due to their lack of seeds and easiness in peeling and eating. These easy peel varieties have been popular on the East Coast and Midwestern
States for awhile now, almost all imported, and their popularity has remained quite strong. Florida’s early variety tangerines, the Fallglo and Sunburst, while having their own set of consumers, are finding it hard to compete with imported mandarins and now those coming from California, as American consumers continue to demand more convenient products, and no seeds in their fruit. As a result, prices for Florida’s early variety tangerines do not receive the price premium of the California fruit. The forecast for a bigger crop this season is likely to put downward pressure on grower prices for all Florida tangerine varieties. However, there is the potential that there will be fewer clementines from Spain available in the U.S. markets this season, which could help boost demand for Florida’s tangerines. Spain’s clementines traditionally compete with Florida’s tangerines in the East Coast and Midwest markets. As of the end of October, the first month of Florida’s tangerine season, the Florida Department of Citrus reported that shipments were down 20 percent over the same time last season, but revenues from shipments were 1 percent
higher than last season. While shipments to Canada were only a fraction of those to the domestic markets, returns from these shipments were strong, helping boost overall revenue at this early date.


October marks the start of the harvest period for California kiwifruit and indications from the California Kiwifruit Commission (CKC) suggest that production for the 2009/10 marketing season (October through September) will be up around 16 percent from the freeze-damaged crop of the previous season. Given this projected growth rate, production for this season would be expected to increase from the 23,000 tons that NASS reported for the 2008/09 season to 26,680 tons—about the normal crop size for much of the past 10 years. While not having a completely frost-free growing period this season, frost problems were more severe last season when an abnormally early bloom exposed many of the blossoms to a mid-April freeze, driving down production to its lowest level since 1985/86 as well as some quality issues. Industry sources have indicated that besides the expected increased volume for this season, crop quality will be much more improved than from last season. Fruit is sizing up well, with more uniform shape and blemish free appearance, attributes that will help move the crop in markets this marketing season. Kiwifruit bearing acres in California has remained fairly steady at 4,200 acres over the past 3 years with most of this acreage clustered in the San Joaquin and Sacramento Valleys. Picking of the crop typically lasts through November, and with the aid of cold storage, supply availability lasts through around May. NASS
will release its first estimate for the 2009/10 California kiwifruit crop in January 2010.

Cumulative early 2009/10 shipments of California kiwifruit were running 27 percent above the previous season through the first week of November, driving f.o.b. kiwifruit prices lower than the same time a year ago. According to industry sources, fruit appears to be falling mostly in the 33 size range and USDA’s AMS have reported free-on-board (f.o.b.) shipping point prices in the Central and Northern San Joaquin Valley from October through early November between $14-
$15 per 9-kilogram (or 19.8 pounds) container loose of the Hayward variety, $3-$4 lower than what they were priced the same time last season. Harvesting extends through November and continued greater supplies than last season should keep the downward pressure on prices.
Domestic demand should benefit from the abundance of good-quality supplies and lower prices. On a per capita basis, U.S. consumption estimates for fresh kiwifruit have remained at slightly less than half a pound per person over the past five marketing seasons, although domestic consumption improved somewhat in 2008/09 from the previous season to 0.48 pounds per person with increased imports. Imports continue to capture a bigger share of the domestic kiwifruit market, with its share at a record high in 2008/09 at 81 percent of domestic consumption (fig. 4). Nearly all the imported volume comes from Chile, New Zealand, and Italy each year. Except for Italian kiwifruit, which account for almost 20 percent of total annual import volume, most imports enter this market during the domestic off season, extending availability of fresh kiwifruit to U.S. consumers during much of the spring and throughout the summer. Imports during the 2008/09 season, October through September, rose 9 percent in volume from the previous season. Imports from Chile topped all other foreign shipments in 2008/09, accounting for 38 percent of total import volume and increasing 16 percent from the previous season. Imports
from New Zealand declined 15 percent while those from Italy posted the biggest increase, up 55 percent, although volume is between 9-14 million pounds less than those from Chile and New Zealand. Having a similar shipping season with California kiwifruit, the sharp increase in imports from Italy was strongly influenced by the lack of supplies from California last season. Prospects for further growth in imports from Italy this season will likely be discouraged by the expected
larger 2009 crop in California and predictions of reduced production in Italy due partly to inclement weather. The projected bigger California crop of exceptional quality points to better export prospects for the domestic industry this 2009/10 season relative last season. U.S. kiwifruit exports in 2008/09, October through September, declined 16 percent from the previous season to 13.9 million pounds, down 18 percent in value to $11.3 million. Exports were down to most of the United States’ top kiwifruit export markets, except to Mexico which received the largest shipment volume from the United States in 2008/09, 22 percent more than what they had received the previous season. U.S. shipments were very strong to Taiwan but only accounted for 2 percent of total export volume. Volumes sent to Canada, historically the leading market for U.S. kiwifruit exports, fell 40 percent while bigger declines were posted to smaller markets in Central America and the Caribbean.

U.S. avocado supplies for the upcoming 2009/10 marketing season (November through October) will likely top the previous record of approximately 1.2 billion pounds achieved in 2008/09, with increases expected from California, Mexico, and Chile—the country’s three main sources for avocados. After having one of the smallest crops in several years, this will be an “on-year cycle” for the California avocado crop. Supplies from Chile are also expected to make a comeback after a
freeze in 2007 reduced production levels in the country for two straight years. U.S. avocado imports from Chile during the 2008/09 through September grew 42 percent from the same time in 2007/08, but 2007/08 volume was only about half of what was shipped the previous season. Most of the growth in imports from Chile in 2008/09, however, is already reflected in the supply increases from the country’s crop this year which started shipments to the United States in July. Mexico filled in for the supply gaps during most of 2008/09. Imports from Mexico in 2008/09,
November through September, totaled 620 million pounds, up 41 percent from the same time the previous season, already at a record-high. The Economic Research Service projected that despite the small California crop last year, per capita avocado consumption during 2008/09 continued to increase, reaching an all-time high of 3.9 pounds per person, up 9 percent from the previous season (fig.5). Preliminary indications from the Hass Avocado Board suggest that production in California for the 2009/10 season will be 60 to 90 percent larger than in 2008/09 and both shipments from Mexico and Chile will set new record-highs. Barring any weather abnormalities, there should be ample supplies for retailers to promote this coming marketing season, likely driving down 2009/10 avocado prices. As of the first two weeks of November, hass avocados were priced an average of less than a dollar ($0.97) each for U.S. consumers, down from $1.21 during the same time last season (2008/09) and $1.19 each from the same time two seasons ago.


Although the shipping season for this year’s U.S. blueberry crop ended in early October, domestic consumers may still look forward to buying fresh blueberries this fall and winter as increased imports from South America have extended availability in the United States during the time of the year when there is no domestic production. Imports from Chile and Argentina both have shown a growing presence in the U.S. fresh blueberry market over the past two decades, although Chile plays a more dominant role. Over the past 2 years, Chile has surpassed Canada as the United States’ top supplier of imported fresh blueberries, increasing its share of total import volume from an average 20 percent during 2000-03 to 49 percent in 2007 and to 53 percent in 2008 for a total of 61.9 million pounds. Imports from Argentina averaged 14 percent of total import volume over the same two-year period, up from 2 percent during 2000-03. Whereas almost all of U.S. fresh blueberry imports came from Canada in the early 1990s, that share in 2000-03 diminished to an average of 78 percent, dropping further to an average of 48 percent in the last few years. Imports from Canada enter the U.S. market during the summer, the same time as the peak harvest period for domestic production. The bulk of the supplies from Argentina usually become available during the fall while the heaviest volumes from Chile arrive around January and February. Earlier predictions from industry suggested that with favorable weather during most of the growing period, this year’s blueberry crops in Argentina and Chile were looking excellent in terms of quality and volume and therefore, good volumes were likely to move through the U.S. market this fall and winter. Heavy rains at harvest time, however, dampened fresh blueberry shipments from Argentina in October through mid-November, with season-to-date volumes down by as much as 56 percent compared with the same time last year, based on AMS data. Free-on-board (f.o.b.) shipping-point prices for Argentine blueberries entering through Miami International Airport ranged from $26-$32 per flat of 12, 4.4-oz/125-gram cups with lids the last week in October, compared with $16.50-$20.50 per flat the same time last year. Prices are likely to soften as Chilean supplies begin to reach the market in the weeks ahead. While still remaining strong, f.o.b. shipping-point prices for Argentine blueberries in early November fell to $20-$24 for flats 12 4.4-
oz cups with lids. Last year the same time, prices ranged from $12-$17 per flat. At the retail level, fresh blueberry prices remained soft almost all throughout the spring and summer months because of increased U.S. production but strengthened thereafter as supplies tightened. In October, U.S. consumers paid an average $2.95 per 4.4-ounce package, compared with $2.56 the previous month and $2.87 in October 2008, based on AMS data. Prices in November strengthened further, averaging $3.33 per package through much of the month, 62 cents higher than what consumers paid for this product last year at the same time. NASS will report its first official estimate of U.S. blueberry production for 2009 in January 2010. Crop estimates, however, from the North American Blueberry Council (NABC) suggested that total domestic production (both cultivated and wild) for 2009 was expected up 3 percent from last year. With this projected growth rate, production for this year likely would be around 454 million pounds, up from the 439 million pounds reported by NASS in 2008 (table 10). Production was projected to have increased in 7 of the 14 States for which NASS reports annual blueberry production (including Maine for wild blueberries), with most major blueberry-producing States showing growth, except New Jersey. Cultivated blueberries accounted for 80 percent of this year’s production and wild varieties for
the remainder.

NABC also estimated the fresh use portion of production to be up 20 percent in 2009 from a year ago, and based on last year’s NASS fresh-market production, this year’s fresh-market crop would amount to around 232 million pounds. Production for the fresh market has increased rapidly in recent years in response to strong demand in the domestic and international markets (fig.6), narrowing the gap withproduction going for the processing sector. Production for the processing sector in 2009 is projected to decline 9 to 10 percent from a year ago to approximately 220
million pounds. A major portion of processed blueberry production is frozen blueberries for which demand has remained fairly steady in the last few years at around 0.37 pound per person, fresh-weight equivalent. Should projections for 2009 production be realized, this would be the first time that fresh-market domestic production will match or even exceed processing production. As has traditionally been the case, cultivated blueberries comprise most of the fresh-market crop and nearly all the wild blueberry crop moves through the processing sector. Increased availability of fresh blueberries in the United States this year, both from domestic production and imports, combined with lower prices to U.S. consumers through most of the season, likely helped drive up demand during 2009. Even if the growth in imports slows this year compared with last year and exports continue to rise, domestic per capita consumption of fresh blueberries is projected to set a new record high this year, at 0.99 pound per person. Domestic consumption has trended upwards over the last two decades at a growth rate faster than for domestic production. Supply expansion, extended availability, and growing consumer awareness of the health-promoting benefits derived from increased consumption of blueberries all helped to achieve marked increases in domestic per capita fresh blueberry consumption in recent years.

Despite the increase in domestic production, U.S. fresh blueberry imports during 2009 through September were up 25 percent from the same period last year, with volumes from Chile, Canada, Mexico, and Argentina posting significant increases. The only country that shipped less volume to the United States this year to date was New Zealand. Imports from southern hemisphere producers (Chile, Argentina, and New Zealand) for this period reflect previous-crop supplies. Import volume from Canada was up 14 percent, January through September, with most shipments occurring during the summer, while most supplies from the other countries entering the first half of the year. Demand for U.S. blueberries in its major markets in Asia, particularly in Japan, Hong Kong, and Taiwan, helped boost overall U.S. fresh blueberry export volume for this year. Cumulative exports for this year, January through September, totaled 63.5 million pounds, up 1 percent from the same time last year. Over 90 percent of total exports went to Canada. Relative to last year, however, exports to Canada so far this year are down slightly partly due to increased production in that country. Production increases and growth in imports over the past three years has expanded supplies of frozen blueberries in the United States. However, inventory levels have
soared in recent years due to lack of demand growth in this market, driving down frozen blueberry prices. End-of-the year inventories in 2008 were at a record high at 153.4 million pounds, increasing 34 percent from the previous year, based on NASS cold storage data. Prices received by growers in 2008 for processing-use blueberries declined by about 44 percent from the previous year, averaging $0.857 per pound for cultivated blueberries and $0.60 per pound for the wild varieties. Free-on-board (f.o.b.) shipping point prices for frozen blueberries in Michigan in 2008 averaged $1.32 per pound in 2008, compared with the 2007 average of $2.03 per pound. Although processing-use production was projected down in 2009 and imports have slowed, frozen blueberry prices continue to be pressured down by large inventories and weak exports. Primarily because of the lack of need for imports given the current supply situation, U.S. frozen blueberry imports for this year, January through September, mostly from Canada, were down 15 percent in volume from the same time last year. For the same period, sharply lower shipments to Canada and Japan, the United States’ top two export markets for frozen blueberries, drove overall exports this year to date down 42 percent. USDA had purchased a total of 24.6 million pounds of frozen blueberries for donation to child nutrition and other related domestic food assistance programs for
fiscal year 2009 to help return some balance to the U.S. frozen blueberry market. Another 8.4 million pounds of frozen blueberries were purchased for fiscal year 2010. These purchase totals equal approximately 11 percent and 4 percent, respectively, of the 223 million pound average U.S. blueberry production that moved through the processing sector during the last three years.