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Surge in vegetable prices over last year

During the first seven months of this year, farm prices for fresh-market vegetables averaged 14 percent above a year earlier, according to the latest USDA Vegetables and Melons Outlook.California, accounting for 48 percent of this year’s summer-season vegetable area (up from 46 percent a year earlier), increased its acreage 4 percent. 

Paul L. Hollis

September 19, 2011

5 Min Read

During the first seven months of this year, farm prices for fresh-market vegetables averaged 14 percent above a year earlier, according to the latest USDA Vegetables and Melons Outlook.

After declining 4 percent from a year earlier this past spring, farm prices were expected to average at or below a year earlier this summer, with weather-delayed crops coming to harvest and crowding the market through August.

During January through July, preliminary data indicated that shipments of fresh-market vegetables – excluding potatoes and melons – from domestic sources were up 3 percent from a year earlier. Import shipments during this time were lower due to the winter freeze in Mexico. Most of the gain in domestic movement occurred prior to May, with volume lower each month May through July.

According to USDA, the May-July decline likely reflected planting gaps and reduced yields caused by the cool, wet spring in California, drought in Georgia, and periods of extreme heat and flooding in the Midwest and East.

Shipments from domestic sources, which account for the majority of volume during summer months, were 7 percent below a year earlier in July but were expected to increase in August.

Area for harvest of 11 selected fresh-market summer vegetables (excluding melons, onions, and potatoes) was forecast to rise about 1 percent for this past summer to 269,300 acres. This compares with a 2 percent increase last summer and steady area this past spring.

Only four of the 11 surveyed crops registered increased acreage, with most of the increase coming from a 17 percent advance in carrots and a 6 percent gain in head lettuce.

Fresh-market carrot supplies (largely from California) had been chronically short since the severe February freeze with the surge in summer area likely reflecting a need to normalize supplies after several months of sustained high prices.

A 9 percent reduction in summer area was noted for snap beans with marginal declines for four other crops, including tomatoes (down 1 percent).

California, accounting for 48 percent of this year’s summer-season vegetable area (up from 46 percent a year earlier), increased its acreage 4 percent.

New York, the second-leading summer-season producer with 16 percent of fresh-market vegetable acreage, was expected to harvest 1 percent less area than a year ago, largely because of small reductions in snap bean and sweet corn area.

New York is the leading source for fresh-market sweet corn, cabbage and snap beans in the summer. Michigan, the third leading summer fresh vegetable state in terms of area, expects to harvest 19,500 acres this summer—the same as a year earlier.

Most crops late

Growers in most summer-producing states battled cool, wet conditions during planting season, with most crops one to two weeks behind normal development.

The market situation for fresh-market tomatoes (excluding grape/cherry) compared with a year earlier was as follows:

• Shipment volume during June-July was down 1 percent from a year earlier due to the cool, wet spring and a late start for many local deals.

• Market volume of greenhouse tomatoes increased 49 percent during June-July due largely to greater volume of hothouse Roma (plum-type) tomatoes.

• Prices at the point of first sale (largely grower or shipping point) averaged 39.4 cents per pound during June and July—up 11 percent from a year earlier.

• Market News retail prices for field-grown round tomatoes during June and July averaged $1.30 per pound (down 3 percent); hothouse sold for $1.51 per pound.

• January-June import volume was down 13 percent from a year earlier to 1.92 billion pounds, led by greenhouse tomato volume (up 11 percent).

• January-June export volume was up 12 percent from a year earlier.

• Per capita use is projected to be 20.4 pounds in 2011, down slightly from 2010.

The summer (largely July-September), area for harvest of the three leading melon crops (watermelon, cantaloupe, and honeydew) was estimated to be 84,700 acres — 7 percent less than a year earlier. Area is expected to be down for all three melons.

California melon growers, who account for 41 percent of national summer melon area, apparently shifted into other crops this year, reducing area devoted to the three top melon crops by 11 percent. Although melon area was down in California and Georgia (down 12 percent), growers in the Texas planted 12 percent more melon area, with both watermelon and cantaloupe acreage rising.

Watermelon is the top melon crop during the summer in terms of acreage and shipments. Watermelon area for harvest was down this summer, with growers in every state except Texas (up 13 percent) reducing area.

Despite the incentive of higher prices a year ago, unsettled spring weather and better returns for alternative crops may have encouraged growers to shift area out of watermelon in 2011.

As reported by Market News, U.S. average advertised retail prices for cantaloupes have remained around $2.26 each this summer. Average retail prices for seedless watermelon have declined seasonally since peaking at the start of the domestic season in April at $4.97 each — falling to $3.62 in July.

Honeydew melon retail prices have been relatively steady, averaging between $3.07 and $3.28 since April.

Despite uncertainty in the economy, consumer food demand appeared strong through July, with both retail and foodservice expenditures reported about 3 percent above a year earlier in July.

Adjusted retail grocery sales in July were stronger than the January-July average, while the change in adjusted foodservice sales was about the same as the January-July average.

With higher energy costs keeping pressure on shipping rates, consumer prices for fresh-market vegetables averaged 6 percent above a year earlier over the first seven months of 2011.

During July, the Consumer Price Index (CPI) for fresh-market vegetables also averaged 6 percent above a year earlier.

Average retail prices in July were higher than a year earlier for the majority of fresh vegetables.

About the Author

Paul L. Hollis

Auburn University College of Agriculture

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