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FRUIT AND TREE NUTS--SUMMARY August 23, 1995
Approved by the World Agricultural Outlook Board
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This SUMMARY is published by the Economic Research Service, U.S. Department of
Agriculture, Washington, DC 20005-4788. The complete text of FRUIT AND TREE
NUTS is available 2-3 working days following release of this summary.
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Smaller Crops Boost Fresh Fruit Prices
Grower prices for noncitrus fruits are likely to stay high for
the remainder of 1995 and into 1996, more than offsetting low
citrus prices. Several key western States are harvesting smaller
crops of apples, grapes, and pears this fall. During the spring
and summer, reduced production of California stonefruit and
strawberries raised grower prices. Apple and pear prices also
rose as 1994-crop stocks were drawn down. Orange prices dropped
in 1995 as Florida produced a near-record crop, and another large
crop is projected based on good summer weather and more trees
reaching bearing age.
Retail prices of most fresh fruit rose faster than other consumer
goods in January-July 1995. The fresh fruit index averaged 7
percent higher than a year earlier, compared with a 3-percent
increase in the overall CPI. Retail prices were higher for
oranges, bananas, peaches, grapes, and strawberries, but slightly
lower for apples.
Larger 1995 apple crops in many apple-producing States will be
nearly offset by a smaller Washington crop. USDA's August
forecast indicated the U.S. apple crop would be down 1 percent
from the 1994 record. In the western States, apple output is
expected to be down 11 percent, but up 21 percent in the central
States and up 13 percent in the East.
U.S. apple prices are likely to continue rising, given the
expected decline in Washington output and limited foreign
supplies of apple juice concentrate. A smaller European apple
crop expected in 1995 will not replenish juice supplies and could
bolster export demand for U.S. fresh-market apples.
California grape production is expected to decline 3 percent in
1995, with wine varieties down 3 percent, raisin varieties
dropping 6 percent, and output of table-type grapes rising 6
percent. Grape prices will be supported by the higher value of
premium wine varieties and strong fresh-market export demand.
The 1995 U.S. pear crop is forecast down 8 percent from the year
earlier, with Pacific Coast production of Bartlett pears down 14
percent, but other varieties down less than 1 percent. Bartlett
pears are mostly canned and other varieties are intended for
fresh use. Reduced supplies of pears, as well as apples, in
1995/96 indicate rising prices for fresh-market pears.
California and Georgia produced fewer peaches in 1995 than in
1994, but increases in South Carolina and many other States
nearly compensated. Overall, the 1995 U.S. peach crop forecast
is down only 1 percent from the year before. There will be 13
percent more freestone peaches for the fresh market, but 17
percent fewer California clingstones for canning.
The U.S. sweet cherry crop was down 35 percent in 1995 from the
year earlier and the smallest in 10 years. Fresh-market prices
were up sharply as production dropped in California and
Washington. In contrast, Michigan's 1995 tart cherry crop was
probably the largest since 1964. Frozen cherry stocks are
relatively high and a large crop will force prices down.
Excessive rain in California and Oregon cut 1995 U.S. strawberry
production 7 percent from the 1994 record. Reduced output and
higher prices will likely lower strawberry consumption from 5
pounds per person in 1994. In contrast, blueberry consumption
will probably rise from last year's three-quarters of a pound if
crops in Maine and Michigan are as large as expected by the
industry.
U.S. citrus production in 1994/95 was about 11 percent from the
prior season and 3 percent less than the 1979/80 record. Large
orange and grapefruit crops in Florida resulted from favorable
weather, an increased number of bearing-age trees, and higher per
acre yields. Excessive rainfall and harsh weather early in 1995
did not reduce California orange production, which was nearly the
same as in 1993/94.
USDA expects Brazil to produce and export about 10 percent less
orange juice in 1995/96 due to lower juice yields and increased
diversion to the domestic fresh-fruit market. The Florida orange
industry expects another large crop in 1995/96. The first USDA
forecast of the 1995/96 U.S. citrus crop will be available in
October.
California kiwifruit production declined for a second year in
1994 and grower prices increased by one-third. U.S. consumption
dipped slightly, to 0.5 pounds per person, as increased kiwi
imports did not compensate for reduced California shipments.
Record-high imports from Mexico in 1994 raised U.S. consumption
of mangoes and papayas to 1.0 and 0.3 pounds per person,
respectively. Imports and consumption are likely to be even
higher in 1995. Florida mango production continued recovering
from damage by Hurricane Andrew in 1992. Hawaiian production of
papayas and pineapples continued its slow decline. Imports
sustained fresh pineapple consumption in the United States, but
processed consumption dipped in 1994.
U.S. banana imports were record high in 1994 and consumption
increased to 28 pounds a person. The European Union (EU) policy
regulating banana imports appears to bring more bananas to the
United States. U.S. banana prices strengthened in 1995, but
remain low relative to other fresh fruits. A special article in
this issue of Fruit and Tree Nuts explains the EU banana import
policy and how it affects the U.S. and European banana markets.
Another special article describes Chile's role as a fruit and
vegetable supplier to the United States. Chile's accession to
NAFTA is not expected to significantly affect the U.S.
horticulture industry because current U.S. tariffs are low on
fresh fruit from Chile. The highest tariffs are applied on
processed fruit and vegetables and wine. Eliminating the
relatively large tariffs on these competitive products could
affect these sectors of the U.S. horticultural industry.
However, relaxing Chile's phytosanitary restrictions could boost
U.S. horticultural exports to Chile.
Printed copies of the Fruit and Tree Nuts Situation and Outlook
Report will be available in about a week. For more information,
contact Diane Bertelsen (202) 219-0887. Text of the full report
also will be available electronically. For details on electronic
access, contact ERS Customer Service at (202) 219-0515.
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