FRUIT AND TREE NUTS YEARBOOK -- SUMMARY October 17, 2002 October 2002, ERS FTS-2002S Approved by the World Agricultural Outlook Board ----------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete report will be available electronically about 1 week following this summary release. October 17, 2002 Fruit Production Down but Tree Nut Crop Up in 2001 The 2001 fruit and tree nut crop declined 8 percent from the previous year as a result of smaller fruit crops. Nut production, on the other hand, climbed 20 percent. Declining bearing acreage and lower yields attributed to a 6-percent decline in citrus production and an 11-percent decline in noncitrus production. Weather factors, such as drought in Florida, and below-average rainfall, heavy winds, and hail in Washington contributed to the decline. Only the production of cultivated blueberries, raspberries, sweet and tart cherries, dates, nectarines, olives, pears, Hawaiian pineapples, and lemons were higher than in 2000. Substantial declines among the major crops, such as apples and grapes, helped lead the overall decline in fruit production. Apple production declined 10 percent between 2000 and 2001, and grape production fell 15 percent. In 2000, however, a record- large grape crop was produced, and the smaller 2001 crop is still bigger than any other crop except those produced in 1982 and 1997. Production of all type grapes was down in California, including the wine varieties that had been growing steadily over the previous few years. Production also declined in New York and fell sharply, by 67 percent, in Michigan. Washington grape production increased for both its wine and juice grapes. The orange and tangelo crops experienced the smallest decline among citrus fruit. Orange production was down in Florida, California, and Arizona, but increased in Texas as a result of favorable weather conditions increasing yields. Lime production saw the most drastic decline, falling 58 percent to the lowest level since 1995. It is unlikely under present conditions that lime production will recover to even the modest levels of the past few years because growers cannot replant trees in areas where they had been removed due to citrus canker. Since there is only a limited area in southern Florida that is appropriate for lime production, and competition is heavy in this area from developers and vegetable growers, the U.S. lime industry will likely remain at its present level in the foreseeable future. Nut production increased mostly as a result of the alternate- bearing nature of the trees. Production was on the on-cycle in 2001 for almonds, hazelnuts, macadamia nuts, pecans, and walnuts. Only pistachio trees were on the off-cycle and produced a smaller crop. The almond crop continued to set another record in 2001, driving the overall increase in production. With almonds accounting for 61 percent of the nut crop, the 18-percent bigger crop helped push total production up 20 percent. Walnut and hazelnut trees also produced record crops, and their production rose 28 percent and 119 percent. Pistachio production declined 28 percent from its record crop in 2000, however, the 2001 crop was the second largest reported. The value of the 2001 fruit and tree nut crop declined 2 percent from the previous year to $11.7 billion. Despite higher prices for most noncitrus fruit crops, their crop value rose only 1 percent as the smaller crop size outweighed price gains. The value of the citrus crop fell 8 percent. Despite smaller crops in 2001, the unit prices of oranges and grapefruit were down due to lower prices received by Florida growers. Although California and Arizona growers received higher prices for their oranges, the substantially larger Florida crop brought down overall prices. The value of the tree nut crop rose only fractionally as the larger crops brought down prices, with substantial declines in the unit price of hazelnuts and pecans. Bearing Acreage Second Highest on Record The total number of fruit and tree nut bearing acres declined fractionally in 2001 from 2000, however, it was the second highest on record. Bearing acreage declined for both citrus and noncitrus crops. Tree nut bearing acreage, however, increased 4 percent. In response to lower prices due to strong domestic production in recent years and from international competition, growers have been reducing bearing acreage for many fruit. With the continuously low returns to growers of apples and grapefruit, there has been a steady decline in their acreage since 1998. For apple production, however, as a result of the rapid expansion in the nineties, the 2001 level is still higher than throughout the eighties, even with the continuous decline over the last 4 years. With the recent fall in apple production accompanied by higher grower prices, the continued decline might slow or even stop. The long-standing pressure on grapefruit growers to meet costs as a result of low prices has driven grapefruit bearing acreage to the lowest level since 1992. For grapefruit growers, however, the pressure continues to grow as prices continue to decline even with lower production, and growers are likely to continue to reduce the number of acres of grapefruit trees. Sweet cherry growers in California and Washington, on the other hand, have continuously been increasing the number of bearing acres since 1992. They have been planting more acreage in response to strong demand from the domestic market and continuously growing international markets. Bearing acreage also increased for oranges, lemons, nectarines, and papayas. Bearing acreage increased for all tree nuts except hazelnuts in 2001 (bearing acreage data are not available for pecans). The number of acres producing macadamia nuts increased for the first time in 3 years. Almond and walnut bearing acreage reached record-highs in 2001, as trees planted in the mid-nineties, in response to high grower prices, came into production. Hazelnut bearing acreage has been declining slowly over the past few years after peaking in 1998. The level in 2001, however, is still higher than any year prior to 1996. The declining pattern in hazelnut plantings may slow or even turn around in the next few years, if the U.S. industrys major competitor, Turkey, is successful in its policy of reducing the size of its hazelnut industry. Prices Received by Growers Down in 2001 The index of prices received by growers fell 6 percent in 2001 from the year earlier to 101, the same as in 1999. Prices were driven down by lower prices for some major crops, such as oranges, grapefruit, and lemons, as well as for most tree nuts. A 1-percent increase in the dried fruit producer price index reflects the lower price received by growers for prunes slightly offsetting the higher raisin prices. As a result of higher retail prices for some fruit, the Consumer Price Index (CPI) for fresh and processed fruit was also up in 2001. Consumers paid more at retail stores for bananas, Thompson seedless grapes, grapefruit, and navel oranges. These fruit are four of the top five fresh fruit consumed by Americans (excluding apples), driving the CPI to 265.1, up 3 percent. Retail prices were also higher for orange juice, one of the major processed fruit products. Fruit Consumption Continues To Slide Fruit consumption fell in 2001 for the fourth consecutive year, reaching 279.1 pounds per person, fresh-weight equivalent, the lowest quantity since 1995. Lower consumption, down 1 percent from 2000, was a result of tight supplies of most fruit and weak consumer demand for processed fruit products such as raisins and juices. Citrus consumption increased 4 percent to 113.7 pounds per person for the 2000/01 citrus season, mostly due to higher consumption of orange and lemon products, and grapefruit juice. Noncitrus consumption was at a 6-year low, averaging 165.4 pounds per person, 5 percent below the year earlier. Smaller crops of most noncitrus fruit, especially apples, grapes, and peaches, as well as a decline in banana imports, resulted in the decline. Tree nut consumption rose 6 percent to 2.5 pounds per person. A large proportion of the major tree nuts, such as almonds and walnuts are exported, and higher exports in 2001 over 2000 accounted for most of the usage of these very large crops in 2001. Fresh fruit: Fresh fruit consumption fell 3 percent in 2001 to 97.5 pounds per capita. Fresh citrus consumption increased 3 percent, with higher consumption of oranges, lemons, and limes than during the previous year. Tangerine consumption declined from the previous years record, but consumption in 2001 ranked second behind 2000. Fresh grapefruit consumption continues its decline that began in 1997 and at 4.8 pounds per person, it was the lowest since 1990 and considerably below consumption in the seventies and eighties. Fresh noncitrus consumption fell 5 percent from the year earlier. Americans consumed fewer bananas and apples, the top two fresh fruit eaten in the United States. Consumption was down for most other noncitrus fruit, but was above 2000 for avocados, cherries, grapes, mangos, papayas, and plums and prunes. The increase in fresh grapes, along with mangos and papayas, was fueled by higher imports. The United States relied heavily on imports of these items to boost their consumption. While imports were up in 2001 for these commodities, they fell for bananas to the lowest level since 1997, resulting in the decline in banana consumption. Weather and labor problems in the major banana-producing countries hindered shipments and increased retail prices. As a result, because of the heavy influence of bananas on fresh fruit consumption, overall fresh use fell. While there may have been some substitution, it was not sufficient to offset the strong reliance on bananas by Americans. Canned fruit: Canned fruit consumption increased 2 percent in 2001 from the year earlier to an annual average of 15.6 pounds per person. On a per capita basis, Americans ate more canned apples, olives, and pears. While canned olive imports fell slightly in 2001, supply was more than made up for by a large crop. Because inventory data are not available for canned fruit, the consumption data reflect an on- and off-year cycle, reflecting some of the alternate-bearing nature of some of the fruit trees and the storage of oversupply for use the following year. When examined using a 2-year average to compensate for this alternating tendency, canned fruit consumption fell overall by 3 percent, but remained unchanged for peaches, the major canned fruit consumed. When examined in this fashion, canned olive consumption actually fell from the previous 2-year period, 1998/99 and 1999/2000. However, 2000/01 data include unusually low production and offset the numbers. Therefore, it is really impossible to see any trend occurring in recent years. Frozen fruit: While Americans consume only small amounts of frozen fruit, compared with fresh, canned, or juiced, consumption in 2001 averaged 4 pounds per capita, the highest on record. Consumers may be becoming more aware of the benefits of frozen fruit, with similar nutrient values as fresh. The increase is likely also driven by media information produced by different berry industries on their health benefits, particularly of blueberries and raspberries. Frozen berries account for over half of all frozen fruit consumption. Among the frozen berries, strawberries are the largest category. In 2001, frozen strawberry consumption remained level with the previous year at an average of 1.6 pounds per person. The pack and imports were down in 2001, however, large carryover stocks from the record-large crop the previous year, provided enough supplies to maintain the level of consumption. Frozen blueberry pack was also down in 2001, but an increase in imports as well as high beginning stocks brought overall per capita consumption up to 0.35 pound. Demand for blueberries internationally is directly competing with domestic demand and holding consumption below early- to mid-nineties levels. Frozen cherry consumption was slightly higher in 2001, increasing to 0.56 pound per person. While consumption of frozen sweet cherries fell, tart cherry levels were higher because of a big crop. The larger crop, however, only had a small impact on increasing consumption, and the industry was left with large inventories at the end of the season. Dried fruit: Dried fruit consumption fell 2 percent in 2001 from 2000 to an average of 2.4 pounds per person. Much of the decline can be attributed to a drop in raisin consumption, which accounted for 61 percent of all dried fruit usage. In 2001, raisin consumption fell 3 percent to 1.5 pounds per person, the lowest level since 1979/80. A smaller grape crop in 2001 and strong competition for Thompson seedless grapes for other uses, especially the fresh-market and other higher-valued processed products, reduced raisin production. Despite large inventories at the beginning of the season, consumer interest in raisins was not strong and consumption fell. Prune use also declined in 2001, as did the consumption of figs and dried apricots. Only the consumption of dried apples and dates was higher than the previous year. Fruit juice: Fruit juice consumption declined for the second straight year to an annual average of 8.6 gallons per person. Usage in 2001/02 was 2 percent lower than the previous year and 9 percent below the record-high set in 1999/2000. Lower production of most fruit used to make juice contributed to the decline in consumption. Consumers increased use of only three juices, orange, pineapple, and prune. Orange juice consumption increased fractionally to 5.4 gallons per person. Increased production over the previous season along with record-high beginning stocks provided for ample supplies during the 2001/02 season. Stronger movement of frozen concentrated orange juice during the season over a year ago, helped drive the modest increase in consumption. Movement, however, was sluggish for not-from concentrate orange juice, despite lower retail prices. Increased imports helped boost availability and consumption of pineapple juice in 2001/02 to 0.31 gallon per person, slightly above last year. High imports, however, were insufficient to boost apple juice supplies, with production at its lowest level since 1988/89. As a result, apple juice per capita consumption fell 2 percent to 1.8 gallons. Without the availability of stock data, however, it is difficult to truly estimate consumption of these two juices. The procedure used by the Economic Research Service to calculate grapefruit juice consumption was altered this year, to more accurately reflect industry inventory data. The new procedure for calculating beginning and ending stocks uses data from the Florida Citrus Processors Association and is also used for the orange juice supply and utilization table. This procedure may slightly underestimate storage outside of Florida and by nonmembers of the association. Since we assume outside storage to be small relative to member storage, we believe the new procedure more accurately reflects grapefruit use. Changes were made back to 1989/90, making comparisons in the series more accurate if examined from that point on. Grapefruit juice consumption fell 16 percent in 2001/02 from the previous year. Tree nuts: Tree nut consumption, at an average of 2.9 pounds per person in 2001/02, reached its highest level, and was 31 percent higher than last season and 15 percent above the second highest level in 1999/2000. Big crops this season contributed partially to the increase. A 47-percent increase in imported nuts, such as cashews, Brazil nuts, and pine nuts, shows an overall increase in U.S. demand for nuts. Also pointing to stronger consumer demand is that ending stocks for all tree nuts were only 5 percent above last season, even though domestic production was 20-percent above a season ago. The U.S. tree nut industry is generally heavily reliant on export markets, and 7 percent higher exports also helped moderate the ending stock increase. U.S. consumption of almonds increased 80 percent in 2001/02 due to a record crop size and lower exports. Very strong domestic demand for almonds resulted in exports falling 9 percent and brought ending stock levels to their lowest since 1996/97. With the strong domestic demand, consumption reached 1.0 pound per person in 2001/02, a record high. Americans also consumed more pecans and hazelnuts. Consumption, however, was down for walnuts, macadamia nuts, and pistachios.