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By 12 percent in Texas: Vegetable, melon acres expected to drop

With the exception of producers in Florida, vegetable and melon growers across the United States are expected to decrease production in 2002, according to a recent USDA report.

“Although shipping-point prices last spring were 6 percent higher than the previous year, growers and shippers, along with their lenders, will likely remain conservative until clear evidence of improving domestic and export demand appears,” the April Vegetable and Melons Outlook says.

Put out by USDA's Economic Research Service, the report says the number of harvested acres of fresh vegetables and melons in 2002 will be down two percentage points overall. More specifically, vegetable and melon acreage is projected by USDA to decline by 12 percent in Texas, 3 percent in California, and 2 percent in Georgia. Florida growers, meanwhile, are expected to harvest slightly more acreage than in 2001.

Nationwide, melon acreage is projected to decline by four percent in 2002, with watermelons taking the biggest hit with a five-percent drop.

“Despite limited recovery in average prices last year, area devoted to the three leading melon crops was again reduced this spring. Melon area dropped 4 percent after being cut 11 percent last spring,” USDA reports.

“The weak economy of the past year is likely the source of pessimism in melon markets. However, over the last decade, a combination of improved per acre yields and import pressure at the beginning and end of the domestic season have likely restrained price gains and acreage growth.”

The two crops that may be putting the most downward pressure on prices and acreage are watermelons and cantaloupes. Watermelon yields have risen an estimated 56 percent since 1992, while 35 percent of cantaloupe consumption now comes from imports, compared with 23 percent in the period between 1989 and 1991, USDA reports.

In comparison to melons, tighter supplies of most fresh-market vegetables combined with acreage decreases are pushing grower and retail prices upward.

Fresh market shipments, including imports, were one percent below a year ago during the first quarter of 2002, with March volume down 11 percent. As a result, grower prices averaged 53 percent higher for the quarter and retail prices averaged eight percent above a year earlier, the USDA outlook report says.

Leading the charge in higher prices is head lettuce with a 2002 first quarter price increase of 202 percent, followed by cauliflower, up 68 percent, and broccoli, up 63 percent.

Fueling the rise in lettuce prices are short supplies caused by the combination of a 3 percent cut in acreage, unusually warm fall weather, and a persistent run of colder-than-normal weather in the main California and Arizona desert winter vegetable growing regions.

These factors also contributed to well below normal head sizes and weights.

Contributing to the shortage was an increased demand by processors of bagged salads and other fresh-cut products. These firms, the report says, require a certain volume of lettuce to prepare their products and generally have contracts with growers to supply it.

With per-acre yields down, more acreage is required to satisfy processor needs, leaving less product to be shipped into the retail bulk market.

“In the face of improving demand from a strengthening economy, this forced shipping point prices in March to run as much as seven times above a year earlier for a 24-head carton of film-wrapped iceberg lettuce,” USDA reports. “Improving supplies of iceberg lettuce from California's San Joaquin Valley helped topple record-high shipping point prices from nearly $60 per 24-head carton of film-wrapped lettuce in late March to less than $5 per carton in early April.”

USDA's Economic Research Service says it expected lettuce prices to remain volatile into early May, at which time the Salinas Valley would supply the bulk of the nation's lettuce. That's important because less than 1 percent of U.S. head lettuce consumption comes from outside the United States, because domestic shippers usually offer a steady supply of low-cost lettuce.

Overall, harvested acres of 11 fresh vegetables fell 1 percent this spring. USDA says gains of 4 percent for tomatoes and bell peppers were outweighed by reduced area for broccoli, carrots, cucumbers and cabbage.

“In addition to lower acreage, spring shipment volume could be trimmed as a result of brief cold snaps in Florida, Georgia and Texas. Reports of wind-caused bloom drop and uneven plant growth due to earlier temperature extremes, both cold and hot, may lead to sporadic spring shipment volume and price fluctuations well into May,” USDA reports.

The Economic Research Service is forecasting per capita vegetable and melon use will rise 1 percent to 451 pounds per person in 2002, with most of the increase coming from processing vegetables. However, little change in use is expected, as reduced domestic output will likely be offset by rising imports.

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