SUMMARY: FRUIT AND TREE NUTS August 21, 1997 August 1997, FTS-280 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- 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 will be available within a week following release of this summary. ----------------------------------------------------------------------------- Abundant Fruit and Tree Nut Supplies Lead to Lower Prices Grower prices for many noncitrus and citrus fruits are likely to stay lower than a year ago for the remainder of 1997 and into 1998. Several key Western States are harvesting larger crops of grapes and pears this fall, U.S. apple production is expected to increase, and conditions are favorable for another large orange and grapefruit crop for the 1997/98 season. During the first 7 months of 1997, the grower price index for fruit and nuts averaged 8 percent below a year earlier. The decline was due mainly to a larger Washington apple crop of mostly smaller-sized fruit last fall, a record large Florida orange crop and a large U.S. grapefruit crop in 1996/97, and an abundant harvest of summer stone fruits and grapes this year. Lower almond prices in 1996/97 also influenced the price index. U.S. apple production is forecast to increase 3 percent from 1996. A smaller Washington crop will be offset by increases in most apple-producing States, including New York and Michigan. Production is forecast down 3 percent from a year ago in the Western States, but up 5 percent and 37 percent, respectively, in the Eastern and Central States. Reduced production in Washington will likely keep fresh-market grower prices unchanged to slightly higher than a year ago and will probably limit U.S. fresh apple exports in 1997/98. U.S. grape production is forecast up 20 percent from last year, surpassing the record crop of 1982. California's grape output is expected to be up 20 percent, with production of wine-grape varieties up 21 percent and the largest on record. Production of raisin-grape and table-grape varieties is expected up 19 percent and 18 percent, respectively. The bountiful harvest will likely put some downward pressure on grower prices, but the good quality of the crop and continued strong domestic and export demand will likely prevent a steep decline in prices. The 1997 U.S. pear crop forecast is up 24 percent from a year ago. Pacific Coast production of Bartlett pears is expected to be 27 percent larger than in 1996, while output of other varieties, intended mainly for fresh use, will be up 24 percent. While Bartlett pear production will likely rise only 5 percent in California, production is expected to increase sharply in Washington (up 71 percent) and Oregon (up 67 percent). Increased supplies of pears, as well as apples, indicate lower pear prices during the 1997/98 marketing season. U.S. peach production is forecast up 28 percent from 1996 as Georgia, South Carolina, and much of the Southeast region recover from last year's crop failure and California produces a sizable crop. The 1997 U.S. freestone peach crop, mostly for fresh use, is forecast up 58 percent from a year ago, while California's clingstone output, mostly for canning, is expected up fractionally. Overall, the larger peach crop and increased competition from ample supplies of other summer fruit will likely generate lower peach prices than a year ago. The 1997 U.S. apricot crop is forecast well above levels of the last 2 years, and lower prices are expected. Favorable weather led to larger crops in California and Washington, but a frost in Utah precipitated a crop failure. Improved growing conditions in most sweet cherry growing areas, especially in the Pacific Northwest, helped the overall performance of the 1997 U.S. sweet cherry crop. Production is forecast up 24 percent from a year earlier, with large increases in Washington, California, Oregon, and Michigan. Grower prices for fresh sweet cherries will be pressured by this year's large crop, but the crop's good quality and continued strong export demand will help limit price declines. The 1997 U.S. tart cherry crop is forecast to be the smallest since 1991 and down 10 percent from a year ago. Due to a cold spring, production in Michigan--which accounts for over 70 percent of the Nation's production--is expected to be 8 percent smaller than last year. Except for Wisconsin and Oregon, other tart cherry growing States are also expected to harvest smaller crops. Commercial strawberry production in the six major producing states--California, Florida, Oregon, Washington, Michigan, and New Jersey--is forecast down 4 percent from a year ago in 1997. Favorable winter and spring weather increased yields in California, but a decline in harvested area reduced production 7 percent. Florida's 1997 winter strawberry crop is forecast up 17 percent from last year due to higher yields and increased acreage. Expected higher fresh strawberry prices and lower prices for other fresh fruit could lead to reduced domestic consumption in 1997. Preliminary fruit counts from the California Kiwifruit Commission indicate that California's 1997 kiwifruit production will be up from last year and of good quality. Fresh kiwifruit grower prices will likely decline. Lower prices and good fruit quality will likely boost domestic consumption and export demand. U.S. banana and mango consumption reached record highs in 1996. Bananas remain the most popular fresh-market fruit consumed in the United States, followed by apples and oranges. U.S. mango consumption has grown rapidly in recent years. In 1995, fresh mango consumption exceeded that of numerous other fresh fruits, including apricots, cherries, cranberries, kiwifruit, papayas, plums, and prunes. Indications are this trend continued in 1996. Last year, fresh papaya imports increased 72 percent from 1995, boosting domestic consumption. Meanwhile, U.S. consumption of fresh pineapple fell slightly, as it has for the previous 2 years. The U.S. orange crop is forecast at 12.9 million tons in 1996/97, surpassing the previous record in 1979/80 by 9 percent. Florida's production will account for most of the increase, but larger crops are also expected in California and Texas. The large supply of oranges lowered fresh-market prices during first-half 1997 and heavy competition from large stone fruit and grape crops this summer may weaken summer demand for California Valencias. However, the good quality of the Valencia crop should help maintain prices. The forecast record orange crop in Florida has led to an expected large supply of orange juice for 1996/97. In addition, juice yield estimates were 4 percent higher than a year ago, at 1.58 gallons per box. Increased orange production and higher juice yields are expected to boost frozen concentrated orange juice (FCOJ) production 13 percent from 1995/96. Although futures and grower prices have been lower throughout the 1996/97 marketing year, retail prices for FCOJ have averaged about 6 percent higher than a year earlier. The utilized grapefruit crop in 1996/97 is expected to be 8 percent above 1995/96. Production is up in Florida, California, and Texas, but down in Arizona. The large supply, along with weak demand and large supplies of fresh oranges and imported fruit, pushed grapefruit prices down. Increased processing supplies and higher juice yields boosted the grapefruit juice supply over the previous year. However, juice movement has been slower than the previous 2 years, lifting grapefruit stocks 17 percent above last year. Higher juice stocks and decreased demand for grapefruit byproducts have put downward pressure on grower prices in Florida for processing grapefruit. With another large crop expected in 1997/98 and the present slow movement of stocks, grower prices for processing grapefruit can be expected to be low again in 1997/98. Tree nut production will likely reach record highs in 1997, with increases expected for all tree nuts. The larger crops point to lower tree nut prices in the 1997/98 marketing year. However, low beginning stocks for most tree nuts will moderate supplies and keep prices strong this season. A special article describes the United States as the world's leading producer and exporter of tree nuts. The United States produces more than one-third of the world's tree nuts, followed by Turkey, China, and Iran. The United States also commands about 40 percent of world tree nut exports. Almonds accounted for 71 percent of the value of U.S. tree nut exports in 1996, followed by walnuts with 15 percent. During the current marketing season, the U.S. share of world tree nut production and exports will increase due to record U.S. output and smaller crops in competing countries. Another special article estimates the impacts of trade barriers on global apple markets. While U.S. fresh apple exports increased sharply between 1970 and 1996, high tariff rates and technical barriers continue to constrain international sales to some markets. Tariff rate equivalents for phytosanitary requirements were estimated for Japan, South Korea, and Mexico and were sometimes found to be as large or larger than many tariff rates. Removing tariffs and harmonizing these regulatory measures to the current U.S. systems approach to pest management for the three countries would substantially affect global apple trade. For more information,contact Agnes Perez (202) 501-6779. END_OF_FILE