FRUIT AND TREE NUTS -- SUMMARY September 8, 1999 September 1999, ERS-FTS-286 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 text of FRUIT AND TREE NUTS will be available electronically in about a week following release of this summary. --------------------------------------------------------------------------- Fruit Prices Strong During the Second Half of 1999 Despite larger crops of stone fruit, grapes, and strawberries, grower prices for fruit and nuts have remained higher than last summer, largely reflecting significantly lower citrus supplies during 1998/99 and the late start of most fruit crops in California and much of the Pacific Northwest. Cool weather delayed development of most West Coast fruit crops, while hot and dry conditions along the eastern United States resulted in early fruit maturity. Despite mixed weather conditions across the United States, fruit quality is reported to be generally good. Grower prices will likely continue strong in the fall due to expected smaller crops of apples and pears. Higher retail prices for Valencia oranges, grapefruit, lemons, strawberries, and Thompson seedless grapes boosted retail prices for fresh fruit in July 1999 compared with a year ago. Four days of freezing temperatures in California in late December 1998 sharply reduced fresh citrus supplies and lifted retail prices. The late harvest of most domestic summer fruit, especially those from California, kept retail prices for strawberries and Thompson seedless grapes stronger than a year ago. During the fall, higher retail prices are expected for apples and pears following the trend in grower prices. The 1999 U.S. apple crop is forecast to be down 7 percent from a year ago and down 2 percent from the 5-year average crop size. Lower production forecast in most Western States will not be offset by expected increases in Central and Eastern States. Washington's crop is down 19 percent, likely reducing freshmarket supplies in 1999. Because of the smaller crop this year, apple prices will likely improve in 1999/2000, and U.S. consumption of fresh apples will likely decline from the 19 pounds per person estimated for 1998/99. U.S. grape production for 1999 is forecast up 11 percent from a year ago. If realized, this will be 10 percent lower than the record crop in 1997 but 7 percent higher than the average production during the past 5 years. California's grape crop is forecast up 10 percent, and combined production in 12 other States is forecast 24 percent larger. Due to the overall increase in grape production, grower prices during 1999/2000 will likely average slightly lower than last year and boost U.S. fresh grape consumption from last season's 7.3 pounds per person. U.S. pear production for 1999 is forecast 1 percent lower than in 1998 due to reduced production of varieties other than Bartlett. Because over 80 percent of pears other-than Bartlett are typically for fresh use, U.S. fresh pear consumption in 1999/2000 will likely be lower. Reduced production, combined with a smaller apple crop, indicate higher grower prices for fresh-market pears in 1999/2000. U.S. peach production in 1999 is forecast up 3 percent from 1998 because of larger crops in California, South Carolina, and Georgia. Even with increased production, grower prices for fresh peaches have held strong because of the late start of most noncitrus fruit crops in California, improved quality and marketing of the peach crop, and strong domestic and export demand. The larger, good-quality crop, along with lower retail prices, could boost U.S. consumption of fresh peaches during 1999/2000. The 1999 U.S. apricot crop is forecast 10 percent larger than a year ago. Increased production in California will more than offset expected limited production in Washington and Utah. The larger California crop will likely put downward pressure on apricot prices in 1999. U.S. sweet cherry production in 1999 is forecast up 3 percent from a year ago and above average. A sharply larger crop in California offset reduced crops in Washington, Oregon, Michigan, and most cherry-producing States. Although overall production was up, good-quality fruit in general, the late start of the California season, and strong export demand may have kept grower prices from falling sharply from last year. U.S. production of tart cherries is forecast down 26 percent in 1999 from a year ago, with a sharply smaller crop in Michigan-the leading producer. Production declined elsewhere, except in New York, Pennsylvania, and Oregon. Decreased production, along with a smaller increase in carryover stocks, will help put some upward pressure on grower prices this year. However, should the industry decide to release a portion of the reserve stock this year, this could offset some of the upward pressure on prices. Commercial strawberry production in the six major producing States (CA, FL, OR, WA, MI, and NJ) is forecast up 4 percent in 1999 from a year ago. Production in California, the dominant producer, is expected up 6 percent. Less competition from winter fruit supplies, the late harvest of many domestic summer fruit, and higher export demand helped sustain higher strawberry prices from 1998. Along with the larger crop, imports have been up so far-indicating increased fresh strawberry consumption this year. Based on preliminary crop indications from the North American Blueberry Council (NABC), USDA's Economic Research Service estimates the 1999 U.S. cultivated blueberry crop to be up 5 percent from a year ago. The expected larger crop in Michigan, the largest producer, will likely offset smaller crops in New Jersey, Oregon, North Carolina, and Washington. NABC estimated there were fewer blueberries for fresh use this year, while processing use increased. U.S. cranberry production is expected to reach a record in 1999, up 6 percent from a year ago. Larger crops are expected in Wisconsin, Massachusetts, New Jersey, and Oregon. Grower prices for cranberries will likely continue to fall during the 1999/2000 season, mirroring last year's scenario when an above-average crop and large carryover inventories forced down the season-average price to its lowest since the mid-1980's. Most of the tropical fruit supplies in the United States are imported. Because of increased imports, per capita consumption of bananas, fresh mango, and fresh pineapples reached record highs during 1998. Meanwhile, reduced canned pineapple and pineapple juice imports led to decreased per capita consumption, while fresh papaya consumption remained unchanged from the prior year. The 1998/99 U.S. citrus crop declined 23 percent from the previous season, mostly due to poor weather in 1998. All citrus crops, except limes, were smaller. Adverse weather conditions delayed Florida's harvest and lowered its citrus production 20 percent from the 1997/98 record crop. California's citrus production decreased 39 percent because of freezing temperatures that lasted several days in late December. The 1998/99 U.S. orange crop declined 29 percent from last year's record crop, with reduced production in all the major producing States. Although juice yields were record high, orange juice production declined 19 percent, the lowest output since 1993/94. Monthly prices Florida growers received for their processing oranges have been the highest since 1992. Grapefruit production fell 3 percent in 1998/99 to the lowest output since 1991/92. Grower prices for fresh grapefruit averaged higher this year than the past several seasons as a result of strong demand from the processing sector, increased export demand, and the late-maturing crop. Total production of tree nuts will likely increase substantially this season and could surpass the previous record in 1997/98. Record almond and walnut crops are forecast, and larger crops of hazelnuts and pecans are likely in 1999. Pistachio production is forecast smaller than last year. With larger overall supplies, grower prices are likely to average below a year earlier, but domestic use and exports are expected to increase. Printed copies of the Fruit and Tree Nuts Situation and Outlook report will be available in about 2 weeks. For more information, contact Agnes Perez, 202-694-5255. The text of the report will also be available electronically via the ERS website at www.econ.ag.gov. END_OF_FILE