India fresh fruit market - USDA FAS

Go here for a recent USDA FAS report on India's fresh fruit sector. From the report:


India is a net exporter of fresh fruits with exports primarily dominated by mangoes and grapes (See anexure V for more details). Bangladesh, Nepal, the Middle East and several EU countries are the major export destinations for Indian mangoes and grapes. Indian fresh fruit imports of 77,450 tons during IFY 2007-08 were just 0.12 percent of total fruit production in India. However, fresh fruit imports registered a significant 826 percent increase from IFY 2000-01 to IFY 2007/08. Unlike exports, more than 85 percent of total Indian fruit imports are dominated by temperate fruits. Imports of most fresh fruits in 2007- 08 have been trending upward (21 percent increase than the previous year) and the growing middle income population and expanding organized retail are expected to continue driving increased imports. However, during the current year (2008/09) the rupee has depreciated against the USD, raising the cost of imports. If the trend con nues further, the impact is expected to reduce total annual fresh fruit imports for the current year.

UK retail market report - USDA FAS

Here is a hot off the press USDA FAS report on the UK retail sector:

From the summary:

This report is a Market Brief providing information about the leading UK supermarket chains: Tesco, Asda/Wal-Mart, Sainsbury’s, Morrisons, Waitrose, Marks and Spencers, Whole Foods Market, Aldi and Lidl. This report gives an overview of the trading styles, and target customers of each retailer, as well as contact details for their head office.

This report doesn't overpromise. It delivers exactly what it describes.

USDA FAS - Argentina deciduous

Here is the link to a recent USDA FAS report on Argentina deciduous. Here is the summary below. Don't miss this 13 page report.

Argentina's CY 2009 total fresh deciduous fruit production is forecast at 1.845 million MT, up 45,000 MT from the previous year, due to higher yields. The total fresh deciduous fruit crop for CY 2008 is expected to decrease to 1.8 million MT, primarily due to frost damage in 2007 which affected apples and pears. Total exports in CY 2009 are estimated to decrease to 800,000 MT as a consequence of the international economic crisis which will affect world demand. Domestic consumption is expected to remain stable, and imports will continue to be negligible.

Mexican apples and Chinese citrus

There are a couple of reports worth nothing from the USDA FAS this morning:

Here is a report on China's citrus prospects:
China’s MY 2008 citrus production is forecast at 21 MMT, up 10 percent from the revised MY
2007 figure, the result of favorable weather conditions throughout the major citrus producing areas during the crop development period. Orange production is forecast at six MMT in MY 2008, up 10 percent from the previous year, as new plantings from a few years earlier have gradually reached full production. Production costs continue to rise in the wake of increased prices for inputs such as fertilizer, pesticides, electricity, fuel, water, and labor


Here is a link to the USDA FAS report on Mexican apples. From the summary:

Apple production for MY 2008/09 (August/July) is forecast at 540,000 MT, a 1.8 percent increase compared to MY 2007/08. Apple imports are forecast to decrease approximately five percent as a result of decreased demand and adverse exchange rates with the U.S. dollar. It is anticipated that the United States will remain the largest supplier of apples to Mexico. Pear production is forecast at 28,000 MT for MY 2008/09 (July/June), which is a marginal increase compared to MY 2007/08. Pear imp orts are forecast to decrease 4.7 percent due to lower demand and the depreciation of the Mexican Peso. Table grape production for MY 2008/09 (May/April) is forecast to decrease 3.8 percent compared to MY 2007/08 due to adverse weather conditions. Likewise, table grape imports are forecast to decrease roughly four percent due to decreased demand.


EU Food assistance

FAS reports of interest

Here are a few of the recent USDA FAS reports that may be of interest to Fresh Talk readers:

Canada fresh deciduous report
Present prospects point to lower production in Canada from the 2008 fresh apple and pear crops. All major apple producing regions of the country experienced weather related production problems and pear producers in Ontario ripped out 250 hectares of trees following the closure of the last fruit cannery in the province. Post forecasts Canadian fresh apple production to fall 11% from a year ago to about 360,000 MT and total fresh pear output to decline by as much as 20-25% to about 9,000 MT. In 2007 Canada became the first country in the world to introduce Harmonized Trade System codes to record imports of organic products and this report provides marketing year data for Canadian imports of organic apples from the United States. According to official trade data, Canada imported 4,340 MT of organic apples from the United States during MY2007/08 (July/June). U.S. organic apples accounted for 3.3% of total Canadian fresh apple imports from the United States of 132,561 MT.

Chile fresh deciduous
The industry forecasts an expansion in fresh apple, table grape and pear production, as weather has been favorable in most growing areas. As a result exports of these selected fruits are also expected to expand in 2009. A larger apple juice output is expected due to a larger availability apple harvest is forecasted.


Chile avocado
Although, Chilean avocado production will continue to increase in the coming years, as there are still a large number of orchards entering their most productive stage, this and next years output is forecasted to be much smaller than last season as heavy frosts during the 2007 winter affected large areas of production. Total area planted to avocados has increased significantly during the last few years, but industry sources indicated that the rate of increase in planted area is expected to level off. Excellent gains made in export markets in the past were the main reason for the significant increase in dedicated land use to avocados. But as prices are falling together with an expected increase in competition from Mexico in key export markets like the US, a slowdown in the planting expansion will occur.

Mexican oranges 2008 Highlights...
MY 2008/09 production of fresh oranges is forecast to be 10 percent lower due to dry weather conditions in the northern states of Mexico. However, production for Key limes and Persian limes is forecast to increase due to overall better weather conditions. Grapefruit production for MY 2008/09 is forecast to be marginally higher than MY 2007/08, although
less grapefruit is expected from the northern parts of Mexico (especially Nuevo Leon) due to dryer weather conditions. Lower FCOJ production levels for MY 2009 (January-December) are forecast due to low international prices.

Mexico apple antidumping dispute
Mexican officials expect resolution of the apple antidumping dispute following the issuance of a final ruling on the case by a bi-national NAFTA dispute panel that should be released in the first quarter of 2009. In a separate but related action the Secretariat of Economy (SE) announced in the Diario Oficial (Federal Register) the annual review of the compensatory quotas currently imposed on seven companies.


Australia deciduous report
Despite recent widespread rainfall, much of Australia’s apple and pear production remains under drought conditions. Poor soil moisture and a lack of irrigation water are expected to persist into the CY 2009 season and are expected to constrain production during this period.
Apple production for CY 2009 is forecast at 290,000 MT. Exports of apples for the CY 2009 season are forecast at 5,000 MT. Pear production for CY 2009 is forecast at 135,000 MT, down significantly on the 150,000 M Total pear exports for CY 2009 are forecast at 3,000 MT.

Poland's winter of discontent
EU farmers in Poland are expressing unhappiness with prices and policies through protests in Warsaw and Brussels to call attention to their complaints. The discontent extends across of a variety of products due to low prices (caused by oversupply and normal cyclical price variations) frustration with processors, and fears of EU subsidy reductions. Many farmers are holding off selling crops in an attempt to wait out the crisis. The big problem will be pring, when farmers need credit. How do you get a new farm loan when you lost money last year? There is intense pressure for action by the EU Commission to address these issues coming from Poland.

South Africa retail report
South African retailer market leaders Shoprite, Pick n Pay, Spar, Massmart and Woolworths
continue adapting to changing conditions and perfecting their store formats while expanding across the borders into the Southern African countries and beyond. 2007 value sales of supermarkets grew by 22 percent to reach US$ 10 billion, mixed retail outlets grew by 7 percent to reach US$ 6 billion, forecourt retailers recorded value sales growth of 9 percent to reach US$ 0.9 billion, and convenience stores grew by 10 percent to reach US$ 0.8 billion.

China retail report
In 2007, total food retail and wholesale sales in China reached USD 104.4 billion, a double digit increase over the previous year, as China's economy continued its impressive growth
and central government policy encouraged private sector spending in order to shift the
economy to a more consumption-oriented path. International retailers in particular have
benefited from their reputation for offering higher quality products than most domestic
retailers, thanks to stricter quality control in a country where food safety is a major concern


Russia: Doctrine of food security
The Russian Ministry of Agriculture is working on a National Food Security Doctrine, which
may be adopted by the Order on the Russian President in December 2008. The concept of
the doctrine was supported by the Upper Chamber of Russian Parliament. The doctrine shall
include several indexes, which will show the target levels of the country's food security,
including per capita agricultural food consumption, share of imports of domestic
consumption, indicative prices for some major agricultural food products

Argentina fresh deciduous
Argentina's CY 2009 total fresh deciduous fruit production is forecast at 1.845 million MT, up 45,000 MT from the previous year, due to higher yields. The total fresh deciduous fruit crop for CY 2008 is expected to decrease to 1.8 million MT, primarily due to frost damage in 2007 which affected apples and pears. Total exports in CY 2009 are estimated to decrease to
800,000 MT as a consequence of the international economic crisis which will affect world
demand. Domestic consumption is expected to remain stable, and imports will continue to
be negligible.

Canadian potato production
November 21, 2008 Statistics Canada released the first estimate of 2008 Canadian potato production. The agency indicated that total Canadian potato production fell 5.4% to 4.7 million metric tons (MMT) from 5.0 MMT last year. The estimate mirrored the forecast made last month in the Potato and Potato Product Annual CA8076 issued by the Office of Agricultural Affairs which predicted a 5.4% year-to-year crop decline and a 2008 crop of 4.7 MMT. Comment: Potato producers in Prince Edward Island (PEI), Canada’s most important potato producing province that normally accounts for about 25% of total Canadian potato production, abandon over 1,000 hectares in 2008 due to extremely wet weather that caused the potatoes to rot in the field. PEI growers were offered federal/provincial financial aid to offset their losses (see page 12. CA8076). Elsewhere, production increases in Manitoba, Saskatchewan and Ontario failed to offset the combined production losses in the provinces of PEI, New Brunswick and Quebec resulting in the overall 5.4% decline in the 2008 crop.

Australia oranges
Total orange production for 2009/10 is forecast at 480 TMT, up significantly on the estimated 440 TMT for the previous year. Total orange juice production for 2009/10 is forecast at 12,700 MT, up on the revised figure for the previous year. Post has assumed a return to average weather conditions, in the lead up to, and during the 2009/10 season. This alone should provide a slight increase in production.

Japanese unshu oranges
The 2008 Japanese "Unshu mikan" tangerine crops are expected to decline approximately 12
percent from the previous year. Area planted for tangerine trees continues to decline due largely to Japan's aging farmers. The business recessions caused by global financial system crises have been affecting the Japanese sales of citrus products. Japanese tangerine farmers were forced to ship more fruit to processing due to the stagnant fresh produce market. The new crop Florida grapefruit sales are expected to be 6.5 million cartons, down 7 percent from last year. Short U.S. orange crops are expected to reduce Japanese sales in 2009. Stagnant lemon consumption increased the Chilean lemon inventory.

Changing market perceptions in China

Japan food and beverage markets

China urban consumption trends

Japan's "veggie meetings"

China fresh apples - USDA FAS

Here is the link to a recent USDA FAS report on Chinese fresh deciduous fruit production, including apples. As noted by apple country economist Des O'Rourke, China's apple output is up this year. From the summary:


China’s apple production is forecast at 28.5 million MT in MY 2008, up 15 percent from the previous year, the result of a high year in the production cycle. Concentrated apple juice production is forecast at 600,000 MT in MY 2008, down 50 percent from the previous year, attributed both to large quantities of carry-over stock and weakening demand in the world market. Industry sources believe that crushers held at least 300,000 MT of stocks at the end of MY 2007, as sky-rocketing prices limited the buying interest of the major world buyers. Apple exports are forecast at 870,000 MT in MY 2008, while CAJ exports are forecast at 700,000 MT in MY 2008, down 13 percent from the previous year, given expected lower demand from Europe and America.

Precious and few

I always keep an eye out for interesting USDA FAS reports, but lately it seems there has been a drought of reports pertaining to the fruit and vegetable market. However, I noticed a 55 page report on the Japanese market that's more than a worthy read. Find it here. From the report:

From the summary page:

Even with the recent food scares, there continues to be significant opportunities in the Japanese food market for U.S. exporters. For example, Japanese consumers are becoming more health conscious and organic, naturally prepared, and functional foods are growing in popularity.


Later...

As of 2007, supermarkets handled 34% of food retail trade. Over the last 10 years, total store sales have jumped by more than 40%, while the number of stores has risen by 20%. Leading supermarkets are building larger stores, aided by declining land prices and the easing of restrictions on store size. Average retail floor space nearly doubled to 1,000 m² in 2004, compared to 500 m² - 600 m² in 1991.

USDA FAS reports of note: Mexico border entry points, China's emerging market

Here are some USDA FAS reports of note:

Mexican entry ports for U.S. agricultural imports
This report contains an overview of Mexico’s primary inland border entry points, which are listed based on their geographic location from West to East. In terms of import permits issued, the top point of entry for agricultural products is Nuevo Laredo (including Colombia), which represents about half of all imports. Tijuana is second, followed by Reynosa, Ciudad Juarez, Nogales, Mexicali, Piedras Negras, and Matamoros.

Hefei: an emerging city in central China
As a key city in the government's proposed expansion plan of the Yangtze River Delta Economic Region, Hefei is well-positioned to capture the industrial shift from coastal areas into China's interior.


Other reports:
Canada's exit strategy for tobacco growers, aid for potato growers hit by nematodes
Hong Kong biotechnology annual 2008
Nut market in Korea
Canada disappointed in U.S. COOL
Technical requirements of the Canadian marketplace

New Zealand kiwifruit report - USDA FAS

Here is the link to the USDA FAS annual report on New Zealand kiwifruit. From the USDA report:




New Zealand production of kiwifruit during Marketing Year (MY) 2007 (January – December) jumped significantly, up 11.5% to a record 367,916 tons. Production of kiwifruit is expected to break another record in MY 2008 increasing approximately 4% to 382,000 tons. In MY 2007, New Zealand exports of kiwifruit reached a record 347,916 tons, a 12.2% jump from the previous year. Exports in MY 2008 are expected to increase a further 4% reaching 362,700 tons, primarily due to better orchard yields, larger fruit size, and lower loss rates.



A look ahead.....


In spite of increasing costs, kiwifruit production is expected to expand steadily over the next few years. While some kiwifruit vines have been taken out of production, the removals have largely been on marginal land that has historically delivered relatively low yields or low dry matter content. The areas withdrawn have been more than offset by a steady increase in plantings of the Zespri Gold variety. The plant variety rights for Zespri Gold are owned by Zespri, which controls the area planted to this variety. Currently, acreage planted to Zespri Gold is approximately 2,060 hectares compared to 451 for organic fruit and 9,675 for green fruit. Zespri is reportedly allowing an addition 600 hectares of the Zespri Gold variety to be planted over the next few years. Zespri has accepted tenders submitted by growers at over NZ $20,000 (USD 15,000) per hectare for the right to grow Zespri Gold, which indicates a certain degree of confidence in the future of this variety.A total of approximately 1,000 hectares planted to both Zespri Gold and green kiwifruit are expected to come on line over the next five years. This alone is expected to account for an 8% increase in production. Improvements in orchard management techniques will likely contribute to improved yields and a more favorable exchange rate will likely contribute to improved profitability. Having peaked at 82 cents to the U.S. dollar in April 2008, the New Zealand dollar fell to 70 cents in August 2008, which will bolster returns to growers in New Zealand dollar terms. New Zealand Government officials are forecasting that the New Zealand dollar will continue to depreciate over the next two to three years against most major currencies. This should help improve the profitability of kiwifruit production. In light of these factors, post predicts that national production will continue to increase between 2 and 4% per annum over the next few years. Industry contacts report that there is considerable scope for improving yields, dry matter content, and fruit size while also minimizing post-harvest fruit loss. Zespri pays its growers on the basis of various incentives, including taste (high dry matter) and early harvesting (Kiwi-Start program) , which results in considerable variation in the price received by growers. Successfully using the Kiwi-Start program could mean an additional $2.70 (USD 2.03) per tray for growers ompared to the industry average. Taste Payment incentives typically make up 16% to 25% of the total price received by growers depending on the variety of fruit. Zespri also pays premiums for organically grown green fruit and the Zespri Gold variety. In MY 2007, Zespri paid a premium of $1.85 (USD 1.39) per tray for organic fruit and a premium of $2.51 (USD.88) for Zespri Gold over and above the $6.30 (USD 4.73) per tray for the green variety. In July 2008, Zespri announced it will begin orchard trials of four new varieties. Orchardists will graft the new varieties onto 30 hectares of rootstock vines in August 2008.

Wide world of produce - Sept. 2 headlines

Got a message from Gary Fleming about the time line for the Produce Industry Traceability Initiative..developing. Meanwhile, what's on the Web this morning related to produce?

Apple moth quarantine expands

Small farms chafe under big demands

USDA FAS: Mexico ag news

USDA FAS: India's almond imports

USDA FAS: US food safety Web site in China

USDA FAS: Canada Ag Biotech report

Outbreak ends, mystery remains

Landec Corp. conference call

Excess tomatoes

Keep children healthy with fruits, veggies

Wal-Mart rolls on

Recent salmonella outbreak shows benefits of irradiation

About gleaning

UK: more forecasts predict recession for next 18 months

Arizona called ground zero in immigration fight

NYT: End immigration incentives

Obesity society hails Republican platform

UK: Schools should lead obesity fight

UK: Aldi enjoys sales boom

Your wages are working harder

Growing produce to save cash

Wal-Mart delays Md. DCs

State food banks face staggering needs

Meijer, Marsh answer questions on local food

Hydroponics offers sustainability

Apple festival in NC

Competition in Australia

Complaints about shrinking margins for growers are not unique to the U.S. The USDA FAS has published a report retail competition in Australia. Find it here. From the report about a study from the The Australian Competition and Consumer Commission:



During the inquiry, one significant concern raised was whether the gap between farm gate and retail prices for groceries has been widening in recent times, such that farmers and suppliers are getting less, while retailers are getting more. Concerns were also raised about the long-term future of small family-run independent supermarket operators and smaller retailers such as butchers, bakeries and greengrocers and their ability to compete with the major supermarket chains (Coles and Woolworths). The ACCC report focuses on competition in the Australian grocery sector – specifically whether a lack of competition is an explanation for the concerns identified above. The report analyses the extent to which competition (or a lack of it) has contributed to increased grocery prices. The supply chain and bargaining power of Coles, Woolworths and Metcash (the major wholesaler to the independent sector) are given detailed attention. The competitive position of independent retailers also comes under close scrutiny, with an analysis of the factors that may make it difficult for independent grocery retailers to compete aggressively with Coles and Woolworths on price. The report concentrates on basic staple products essential to households. A full copy of the inquiry report is available on the ACCC website here.

FAS reports of note

I was scanning the USDA FAS Web site for attache reports of note. Here are a couple you might want to check out:

India agricultural situation - Aug. 14 From the report:
Signaling its willingness to return to the negotiating table for a global trade deal with the WTO, India said a resumption of the Doha development Round talks now depends on WTO Director General Pascal Lamy getting similar response from the U.S.

Also...

Tesco is planning to develop a wholesale cash and carry business in India, with an initial investment of $120 million in the first two years.


Japan food trends - Aug. 14 From the report:

Chinese medicinal cuisine, “yakuzen”, offers health benefits and medicinal efficacies similar to traditional Chinese medicine (TCM)* except it is prepared by a chef. One company offers such cuisines developed by a nutritionist and pharmacologist. A menu offers anti-aging items such as drinking vinegar.

Demand for organic food in Russia

When I visited Russia earlier this year, I found that demand for organic produce is growing in Moscow but still lags substantially in comparison to markets in western Europe and the U.S. What's more, the lack of a certification scheme was limiting buyer interest. Here is a USDA FAS report describing the evolution of Russia's market for organic food. From the report:


Grunwald is Moscow’s only all-organic store. Eighty percent of people who shop at Grunwald do so specifically because the products are organic. Grunwald carries a wide variety of goods, including produce, meat, handmade chocolates, packaged grocery items, and beauty products. This sector has tremendous growth potential in Russia. Berlin, for example, has a population of three million that supports 360 all-organic stores. By contrast, Moscow is the largest city in Europe with a population of 10.47 million (according to official statistics)3 and has just one such store.

Later.....


While the Russian government recently created a national organic standard, there is not yet a domestic organic -certification process. Currently, Russian producers can be voluntarilycertified by Western inspection companies on the basis of other countries’ standards. They may elect to be certified under E.U., U.S., or Japanese standards, depending on the intended export market. If Russia creates national certification bodies, the domestic and export markets for Russian organics may profoundly change.

U.S. slipping in Canada?

Here is a quick rundown of what is new from USDA FAS attache posts. You might pay particular attention to the report about competition for U.S. horticultural exports to Canada, as it drills into market share for fruits and vegetables:

South Africa apples, pears and grapes: Sum-up: South Africa's 2008/09 apple production is expected to fall slightly to 700,000 MT due to decreased productivity of older orchards. Pear and grape production is forecast to increase slightly to 346,000 MT and 266,000 MT, respectively.

South African citrus: Sum-up: According to the CEO of CGA, long-term production of citrus will decline despite current excellent international prices. Last year’s high export prices are expected to continue, especially for products destined for the EU and Russia because of lower production in competitor citrus producing countries. The Rand depreciation increases farmer returns for exports, although increasing input costs (transport, energy, and fertilizers) continue to off-set the total profit.


China and Mexico challenge U.S. horticultural exports to Canada Sum-up: The U.S. market share peaked at about 65% in the early 2000s and currently, Canadian purchases of U.S. agricultural products account for about 60% of total Canadian agricultural imports. Changing diets linked to immigration patterns, broader, year ‘round product offerings by Canadian grocery retailers, changes in ingredient sourcing by Canadian food manufacturing seeking cheaper inputs and increasing competition from global suppliers present challenges for U.S. food exporters to Canada. In recent years, other foreign suppliers, notably China and Mexico, have increased their agricultural exports to Canada especially in the fresh and processed horticultural products sector.

USDA FAS Wrap Up - Posts from abroad

For some unknown reason, I have not been getting email alerts of new USDA FAS posts as I am supposed to receive, and so tonight I went to browse USDA reports the old fashioned way - online. Here is what I found of possible interest to Fresh Talk readers.

Mexican hot bites - June 13: A little dated now but some Mexican press reaction to tomatoes and salmonella

Canada GST/HST and how they apply to ag imports June 12 report describing value added tax in Canada; most ag products are zero rated and pay no tax upon import

European Commission proposals on CAP - discussion of ag policy in Europe

Tropical fruit production in China Colder temps during the winter of 2008 take a bite out of south China's tropical fruit output

Mexican tomato production Annual report on Mexico tomato production

This week in Canadian agriculture Some news about U.S. exports noted here

Health claims - Europe's standards for health claims

Shandong report: USDA FAS

The USDA FAS has published a report on Chinese horticultural production, focusing on the Shandong province. Roberta Cook, economist at UC Davis, passed along the report, which was composed with the help of one of her former students. Here are a couple of highlights from the report:

On the challenges for China....

A further distinctive quality of China’s domestic horticulture market structure is the lack of traceability with regards to food safety. Though the Administration for Quality Supervision, Inspection and Quarantine has recently implemented mandatory orchard, packing house, and processing facility registration for all fruit destined for export markets, the domestic market is still lacking quality control measures. In the majority of cases, the thousands of small-scale farmers selling to hundreds of local brokers and wholesalers are still largely unaccountable for the quality of their produce.



On vegetable growers...

There is no distinction among farmers in the level of wealth between vegetable and non-vegetable growing households. China’s markets allow equal access to emerging horticulture¹ activities. In 2006, the average cucumber producer’s household assets (on a per capita basis—not including the family’s house) were $992, for non-cucumber producing households $986 and for tomato producers $1,131, for non-tomato producing households $1,164. The lack of significant differences in assets suggests that there are no entry barriers for farmers to switch to the production of vegetables.

Vegetable farmers in Shandong normally grow several crops. Major crops are maize, wheat, cotton, peanuts, and vegetables. Within the vegetable category, farmers do not limit themselves to one type. Simultaneously planted vegetables in both greenhouses and open fields, include: Chinese cabbage, peppers, eggplant, string beans, cucumbers, and tomatoes.

Vegetable production is more labor intensive than other types of farming therefore, the availability of family labor is fundamental for farmers who choose to move into vegetable production. Households with a smaller percentage of laborers with off-farm jobs are more likely to produce vegetables because of the physically demanding nature of vegetable production. In Shandong (and elsewhere in China), there are no stable agricultural labor markets so when a farmer commits to vegetable production, he commits to spend less of his own and his family members’ time off the farm. Most farmers, however, have limited off-farm employment options. This implies that for those households who are not able to participate in off-farm employment, the expansion of China’s vegetable market provides a new employment opportunity.

On fruit growers....

Similar to vegetables, wealth has little effect on the decision to produce fruit but off-farm employment does impact fruit production. Lower-levels of household off-farm employment are seen on Shandong’s fruit farms. Households producing fruit actually had lower per capita assets than non-producing households, indicating that poorer farmers are not being left out of horticulture production. In 2001, the average apple producing households’ assets were $616.30, non-apple producing $734.70 and the average grape producing households’ assets were $787.70, non-grape producing $896.10. Like vegetable production, the labor intensive nature of fruit production is the reason fruit producing households have lower levels of off-farm employment.

China’s government provides some support for apple but not grape production. During the 1980s, this government support led to large production increases through expanding apple orchard area and encouraging farmers to shift production of other crops (grains, fibers, and oilseeds) to apples. The government encouragement occured in three ways: providing grants and loans to farmers, reducing in-kind grain taxes, and introducing new varieties (Zhang, 2005). This promotion program led to a staggering increase in apple production and nearly quadrupled production between 1990 and 1996 from 4.3 to 17 million tons (China’s Ministry of Agriculture, Online Database). However, the support program was viewed as a failure by government and industry because the dramatic increase in supply depressed both domestic and world apple prices. The growth in apple production has since leveled off with total production in 2006 at 26.1 million tons, a 50-percent increase over the ten year period, 1996-2006. Grape production, not supported by government programs, has risen steadily during the period from 1990 to 2006 from 0.86 to 6.3 million tons, a more than sevenfold increase. This increase occurred without government support.

Unlike vegetable production, farm size is not a factor in fruit production. There is no significant difference in the size of fruit versus non-fruit producing farms in Shandong. Fruit production in Shandong Province has increased since 2001. In the case of apples, this growth has come from an increase in average farm size from 0.18 hectare in 2001 to 0.19 hectare in 2006, as well as better farm management and an increase in farm inputs. The growth in grape production stems from a 14-percent increase in the total number of grape farmers from 2001 to 2006, there was no increase in average farm size for grape producers.

Argentina citrus semi annual 2008

All give and no take - that's Argentina's citrus trade outlook for 2008. Here is the link to the semi-annual report on Argentina citrus from the USDA FAS. No mention of the status of the quest by Argentina lemon exporters who are seeking access to the U.S. market. From the report summary:

Citrus production for calendar year (CY) 2008 will decrease nearly 21 percent to 2.47 million metric tons (MT) due to a frost in July 2007. High international prices are favoring exports over domestic consumption and processing, so exports are expected to fall only slightly. Imports continue to remain low as in previous years, with only seasonal purchases of grapefruit.


On trade....

CY 2008 citrus exports are forecast to decrease slightly relative to CY 2007 in all categories due to lower production. Despite the lower production, the packing houses will do their best to take advantage of the high international prices at expense of the processing sector and domestic consumption. Due to quality constraints, more fruit will be sent to the Russian Federation and other markets that accept a third quality standard.


TK: Another USDA FAS report on the Canadian agricultural situation covers possible changes to that country's origin labeling law, in addition to notes about ongoing WTO talks.

New Zealand: Braeburn falters

Here is a link to a USDA FAS report about New Zealand apple situation and outlook.

The late spring frosts (October 2007) negatively impacted on New Zealand’s apple crop during the 2007/08 marketing year. As a result, apple exports are forecast to drop 19,000 tons with virtually all of this volume being used for juice production. Processors are reporting increased volumes of 15-20% this year.
Looking ahead to MY 2008/09 production, it is not yet clear how orchardists will react to the low returns for Braeburn apples, especially the low prices during MY 2006/07, and the reduced yields during the autumn of 2008. It is expected that there will be continued tree removals this winter but there is no clear indication of the magnitude. Consequently, post has taken a somewhat conservative line regarding forecasts for production and export levels. It is expected at this stage that exports will recover and are forecast at 270,000 tons. Juice production is forecast at 110,000 tons, down from 125,000 tons in MY 2007/08. The industry is continuing to search for ways to increase profitability. While some orchards are being replanted with new varieties, such as Jazz, it is not happening as fast as many in the industry would like. Vertical integration of the industry is an on-going trend. There are several notable trends occurring in the New Zealand apple industry, including a reduction in grower numbers. The number of growers has fallen significantly from 1,600 in 2000 to approximately 400 in 2008. There is also trend toward vertical integration with large packers integrating with exporters who are then leasing or buying orchards.

Looking ahead.....

Production in MY 2008/09 will partly depend on the number of trees removed this year during June and July. At this stage, there is no clear indication of how many hectares of trees will be removed. The continued poor returns for Braeburn and Royal Gala varieties, which comprise approximately 70% of production, mean orchardists are looking very closely at whether it is profitable to keep growing these varieties. Some are planting new varieties, such as Jazz and Tentation, and production of these varieties is expected to grow steadily over the next few years. At this stage, post has taken a conservative view and estimates there will be less than a 1% increase in production to 437,000 tons of apples produced in MY2008/09, with 270,000 tons going to export and 110,000 tons for processing. While the new varieties already in the marketplace are profitable, there are several factors that temper a wholesale switch to new varieties. It is very expensive to replant and endure the time delay before production is economic. However, with intensive planting (+2000 trees/ha) on dwarf rootstocks, production is generally underway within two years of planting and is economic in four to five years versus double that under the semi-intensive systems. The pipfruit industry’s strategic review suggested replanting needs to achieve a rate of 10% to 15% per annum. At the moment, it is 7% in Hawkes Bay and 6% in Nelson – the two major growing regions. For those orchards growing Braeburn and Royal Gala apples that opt not to replant with new varieties, there are still opportunities. Industry experts recommend careful analysis of each block within orchards to identify areas where small sizing and poor quality is habitual. Then either these blocks can be grown only for juicing, with a consequent reduction in orchard costs, and some profit, or orchard management can be changed to improve returns. One option is conversion to organic production methods. Approximately 10% of New Zealand apple orchard area is already organic. While carton equivalent returns fell from NZ$50-55 (USD 38.50-42.35) in MY 2005/06 to NZ$35 (USD 26.95) in MY 2006/07, this was still a profitable option. It is likely that organic area will continue to increase. There are several notable trends occurring in the New Zealand apple industry, including a reduction in grower numbers. The number of growers has fallen significantly from 1,600 in 2000 to approximately 400 in 2008. There is also a trend toward vertical integration with large packers integrating with exporters who are then leasing, buying, or participating in joint ventures at the orchard level. ENZA (the former Apple and Pear Marketing Board’s single desk marketing brand), which markets apples for approximately 250 growers, leads the vertical integration trend. Because it owns the proprietary rights to the Jazz variety, it controls the planting of this variety and helps qualified growers with financing to replant. To achieve its overseas marketing goals, ENZA also produces Jazz apples in France, Chile, the United Kingdom and Washington State in the United States.

Two New Apple Varieties Announced

Hort Research, a crown (e.g. government) research institute, together with the Johnny Appleseed Company, has announced the commercialization of a new golden apple, a cross between Royal Gala and Braeburn. In addition, ENZA has announced its new variety, Envy, which is a further development of the Jazz apple.

Labor in Short Supply

Orchardists through out the country are facing labor shortages, especially for seasonal workers. With New Zealand’s unemployment rate at a historical low of 3.4 to 3.5%, there are few New Zealanders looking for seasonal work. Horticulturalists have brought in seasonal workers from other Pacific countries, such as Vanawatu and Samoa, under a New Zealand Government sponsored program.

Chile fresh deciduous semi-annual 2008

The great long term expansion in Chilean fruit production is over - for now.Here is the link to the USDA FAS report released today concerning Chile's deciduous fruit crops. From the report:

Total Chilean fruit exports are estimated to continue to grow in 2008. There are some important factors that will continue to affect economic returns mainly of grapes and in lower degree for apples and pears, like the exchange rate. In general, prices for exported fruit have not varied much in dollar terms, but during the last three years the Chilean peso has gone through a significant revaluation process. The exchange rate for the peso has fallen from 740 Chilean pesos to only 450 pesos to the dollar during the first quarter of this year. Another factor is the cost of labor which has been increasing in peso terms. A new law was approved reducing the weekly workweek from 48 hours to 45-hours; industry sources claim that the effective work time does not exceed 40 hours in a week. Productivity has fallen significantly. This is an important factor for the labor-intensive fruit industry in Chile. In the case of table grape production, labor represents 70 percent of total costs. Increasing energy costs is also a big concern for fruit producers. Consequently, industry sources have indicated that increases of new plantings and production increases in the coming years are not expected, at least for apples, table grapes and pears.

About grapes:


As a result of unfavorable weather conditions in most growing areas, total output in MY2008 (Jan-Dec 2008) is estimated to be slightly larger than last year but smaller than our previous estimates. Lower than normal temperatures in late spring and early summer affected the volume and quality of the production, the bunches were reportedly smaller and lighter for most varieties, but mainly for the Red Globe variety. The lack of temperatures also delayed the start of the harvesting season by almost a month which was reflected better prices obtained for the fruit by early in the season producers. For the coming season, production is forecast to be similar than this season as total output increases due to a larger harvested area could be offset by a drought which is affecting all agricultural areas in the country. Additionally, industry sources believe that total planted area could fall as many producers will not replant orchards that are coming to an end of the production period due to a significant fall in the economic returns which is affecting table grape production for the last two seasons.


On apples:


Good weather conditions in most growing areas for apples during the Chilean spring (Sept-
Oct 2007) had a positive effect on production volume . But some production areas were affected by frost and a lack of good temperatures late in the spring and early summer that reportedly affected the quality of the production. As a result our new production estimates for MY 2008 were slightly adjusted downward. Nevertheless, exports are expected to be expanding slightly larger than the previous year. For the coming Marketing Year (2009) we can expect total apple production to be similar than this last year as a possible production expansion, due to an expansion of the production area and/or some orchards which are in the incremental stage of production, could be offset by a drought which is affecting almost all agricultural production regions in the country.

Organic exports rising in Peru

Peru, if you haven't heard, is a powerhouse producer of organic agricultural products - particularly coffee, bananas and cacao. This USDA FAS report provides some background about the extent of the transformation. From the report:

The shift from conventional to organic banana production is nearly complete, with some sources estimating that 100% of Peru’s banana production is certified organic. In the next two years, the industry estimates that acreage dedicated to organic production will jump nearly 40% to 7,200 hectares. Banana exports for 2007 are estimated at $32 million. This figure represents a 21% jump from last year. The US and Europe split Peru’s banana exports.