Specialty Crops Situation and Outlook
Greg E. Fonsah
Assistant Professor and Extension Economist
Department of Agricultural and Applied Economics
University of Georgia
Tifton, GA 31793
Highlights
The United States continues to enjoy a positive aggregate agricultural trade balances for
the past seven year. Total agricultural exports were $53.6 billion, $49.1 billion, $50.7
billion, $52.7 billion, $53.3 billion and $55.5 billion (estimated Aug. 2003) for 1998,
1999, 2000, 2001, 2002, 2003 and 2004 respectively (Fig. 1). The projection for 2004
U.S. agricultural trade stands at $57.0 billion. On the other hand, the value of U.S.
agricultural imports were $36.8, $37.3 billion, $38.9 billion, $39.0 billion, $41.0 billion,
and $45.0 billion (estimated August 2003) in 1998, 1999, 2000, 2001, 2002, 2003 and
2004 respectively. The 2004 U.S. agricultural import trade is projected at $47.5 billion.
Comparing the export versus the import trade projections leave an impressive positive
balance of trade in favor of the United States agricultural sector.
Fig 1: U.S. Agricultural trade, fiscal years 1998-2004, year ending September 30
60
18
16
14
40
12
10
30
8
20
6
4
(Billion of dollars)
(Billion of dollars)
50
Exports
Imports
Balance
10
2
0
0
1998
1999
2000
2001
2002
2003
2004
Years
Source: USDA AES-39 Outlook, Aug. 26, 2003 and USDA, USDC (2003) AES-38
Outlook, May 27.
However, as the gap between export and import continues to narrow, there has been a
persistent downward trend on export surplus since 2001. Consequently, the $9.1 billion
export surplus forecasted for 2004 is the lowest since 1998.
Although there was a 12 percent increase in import trade, exports trade only increased by
3 percent during the same year. Further, imports (c.i.f.) and imports (customs value) both
increased by 12 percent from 2002 to 2003, while there was –33 percent export minus
c.i.f. imports and –23 percent exports minus customs-valued imports during the same
period.
Present Situation
Fresh market vegetable and melon acreage dropped by 0.4 percent in 2002 and 2 percent
in 2003. The increased acreage for broccoli, cauliflower, sweet corn, and cucumber were
not enough to offset the overall fall in production acreage, which stood at 308,100 acres
in 2003. Prices received by farmers and shippers fell by 12 percent in summer 2002 but
increased 5-10 percent in summer 2003. Total fresh market export trade volume in 2002
was 39,322 million cwt compared to almost double the total import trade of 65,609
million cwt. Severe heat wave in the West and East created tomato supply shortage and
triggered better shipping point prices through mid-August. Summer season fresh market
melon (cantaloupe, honeydew and watermelon) recorded 2 percent increase in production
acreage at 124,300. At the national level, the U.S. vegetable industry recorded 8.5
percent increase in area harvested in 2002 and 3.7 percent decrease in 2003 (Fig. 2).
7000
1330
6900
1320
6800
1310
6700
1300
6600
1290
6500
1280
6400
1270
6300
1260
6200
1250
6100
1240
6000
1230
2001
2002
(Mil. cwt)
(1000 acres)
Fig. 2: U.S. Vegetable Industry: Area and Production, 2001-2003
A. Harv
Production
2003
Source: USDA (2003) Vegetables and Melons Outlook.
On the other hand, total production rose 4.8 percent in 2002 and fell 1.1 percent in 2003
at 1307 million cwt.
Crop value experience a huge 41.7 percent increase from 2001 to 2002 and remained
stagnated thereafter (Fig. 3). Meanwhile, unit value for vegetables increased from $18.99
per cwt., to $20.33 per cwt in 2002 and remained the same in 2003.
Fig. 3: U.S. Vegetable Industry: Crop and Unit Value, 2001-2003
(Million dollars)
15537
11.9
15500
11.88 11.88
15400
11.86
15300
11.84
11.83
15200
11.82
15100
11.8
15000
11.78
14927
14900
11.76
11.76
14800
11.74
14700
11.72
14600
11.7
2001
2002
(Dollars per cwt)
15550
15600
Crop value
Unit value
2003
Source: USDA (2003) Vegetables and Melons Outlook.
Import Supply
Factors that influenced U.S. food imports for the past two decades included temporal
dynamics in domestic food supply chain due weather and other unforeseen conditions,
high purchasing power parity for imported food due to the protracted strength of U.S.
dollar compared with other foreign currencies, acquired taste preferences created by
ethnic influx and growing immigrant population, newly acquired flavor for nontraditional American menu such as tropical fruits and crops, steady and reliable overseas
suppliers especially during off season, innovated ocean transportation that facilitates
transshipment, controlled atmosphere and warehouse facilities and increased disposable
income amongst others. Specific factors that contributed to the increase in U.S. imported
goods for the past decade are red meats, fish and shellfish. Furthermore, vegetables such
as onions, peppers, tomatoes, cucumbers, olives, and asparagus showed remarkable
growth. Fresh and frozen fruits such as pears, melons, grapes, and avocados made
appreciable contributions to the import growth. More so, the economic slump in most
Asian countries rendered the U.S. market favorable for Australian and New Zealand meat
as import rose from 6.5 to over 9 percent in carcass weight.
The North American Free Trade Agreement (NAFTA) has been instrumental also in
improving trade ties between Canada, Mexico and the United States. While Canada has
recently snatched the leading role as number one importer of U.S. fruits, vegetables,
grains, oilseed and meat from Japan, Mexico is increasing its grip in this market as 27
and 38 percent of U.S. fruit and vegetable imports originates from Mexico.
The U.S. Vegetable Industry continues to experience strong import growth, 5.9 and 11.4
percents in 2002 and 2003 respectively (Fig. 4). Incidentally, export demand remain
stagnant during the same time period. Per capita use slightly fell in 2002 and made a
drastic come back in 2003.
Fig. 4: U.S. Vegetable Industry: Import, Export and Per Capita Use, 2001-2003
6000
446
445
444
443
4000
442
3000
441
440
2000
(Pounds)
(Million dollars)
5000
Imports
Exports
Per Capita use
439
438
1000
437
0
436
2001
2002
2003
Source: USDA (2003) Vegetables and Melons Outlook.
Export Demand
Although the U.S. vegetable industry export trade slightly increased from 2001 to 2003,
the dollar value was lower than the import trade, thus reflecting a negative U.S. vegetable
trade balance (Fig. 4). For instance, dry bean exports to the United Kingdom, Mexico
and Japan fell by 20, 17 and 13 percent respectively this year compared to 2002.
Although export of kidney, black and pinto bean increased, there was an aggregate 2
percent decrease in dry bean export in 2003. The production and sales of specialty
mushrooms such as shiitake and oyster have been consistent for the past two years at 13
million pounds per year with a sales value of $37 million.
Steady growth has been
recorded for brown agaricus mushrooms (including Portobello and crimini varieties) for
the past three years. Although the prices have not changed during the same time frame,
the crop presently accounts for $140 million sales value, thus over 18% increase
compared with 2002. China is the leading producer (41%) and exporter (two-thirds of
dried and 44% canned) of the world’s mushrooms. However, the Netherlands regained
their number one position of fresh mushrooms exporter, which they lost in 2000. The
U.S. is ranked second in production and 12th in fresh mushrooms export. The consistent
appreciation of the U.S. dollar has adversely affected the overall U.S. trade balances and
compromised our leading position and competitiveness in the world market. This could
be partially blamed for the stagnated export growth, as most nations cannot afford our
products.
Domestic Demand
In the past two decades, the U.S. per capita food consumption escalated from 1800
pounds in the early 1980s to 2000 pounds per year in 2000, thus reflecting 11.1 percent
increase in average import share calculated from units of weight, and includes total food
consumed (Fig. 5).
Fig. 5: Selected Import Share of U.S. Food Consumption, 1981-2001.
80
(Percentage)
70
60
50
40
30
20
10
0
81-85
86-90
91-95
Ave Import
Fruits/products
1996
1997
1998
Fish/Shellfish
Vegetables
1999
2000
2001
Crops/products
Veg. Oil
Source: USDA Outlook (2003). FAU-79-01, July.
Fish and shellfish dominates import share by a large margin. Crops and products include
coffee, cocoa, tea, wine and beer while fruits and products include fruit juices and nuts.
Consumption of fruits, vegetables and cereals increased over 20 percent compared with
only 7 percent increase for animal products (Fig. 5). Fruits, vegetable production and
marketing continue to be one of the rapidly growing industries despite the ever increasing
pests and disease problems, numerous restrictions, high cost of production, limited
market windows, extremely high regional and international competition. This positive
trend in the U.S. consumer behavioral patterns stems from the on-going consumer
awareness and health conscious education and advertisement programs.
Future Trend
With the depreciating trend of the U.S. dollars against other foreign currencies (March
2002- May 2003), U.S. agricultural export trade by volume and value are expected to
escalate as our commodities, including specialty crops will become competitive in the
world market and affordable to other nations.
The magnitude of the increase in
agricultural commodity trade is yet to be determined since further depreciation through
2003 and first quarter of 2004 are anticipated. Export of fruits, vegetables, fruit juice,
wine and grain products and processed items to Canada are expected to reach record high
in 2004.
Although China is our main competitor in the Japanese market, the present downward
trend in the strength of the dollar is expected to boost export to Japan and put pressure on
China. The largest U.S. agricultural export to China occurred in May 2003 and this trend
is expected to increase in 2004 for the following reasons: (a) China is now a membership
of the World Trade Organization (b) China needs more soybean for their oilseed
processing industry and (c) China has increased the purchase of cotton, livestock
products (calf skins, and mink pelts) from the United States. Mexico and Russia remain
the area of concern for the U.S. export trade. Although export volume and value for
Mexico is expected to stay the same at a record high of $7.9 billion, and Mexico is still
our third largest trading partner, export of soybean meal, tobacco, vegetable oils, red
meat and poultry meat decreased.
References
1. Jerardo, A (2003) “Import Share of U.S. Food Consumption Stable At 11
Percent”, Electronic Outlook Report from the Economic Research Service, FAU79-01, (July), United States Department of Agriculture.
2. Lucier, G. and C. Plummer (2003) “Vegetables and Melons Outlook”. Electronic
Outlook Report from the Economic Research Service, VGS-298, (Aug), United
States Department of Agriculture.
3. Fonsah, E.G (2003) “The Impact of NAFTA on U.S. Fruits and Vegetable
Industry”. The Georgia Economic Issues Newsletter, Vol. 19, Issue 3 (July), The
University of Georgia, Department of Agricultural and Applied Economics,
Cooperative Extension Service, College of Agricultural and Environmental
Sciences, Athens, GA 30602.