FRUIT AND TREE NUTS--SUMMARY August 21, 1996 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. ----------------------------------------------------------------------------- Smaller U.S. Fruit Crops Support Higher Prices in 1996 Grower prices for fruits were higher than a year ago during the first 7 months of 1996, due largely to smaller crops of apples and pears during the fall of 1995, and strong domestic and export demand. Reduced production of grapefruit, Florida Valencia oranges, Florida temples, and tangelos in 1995/96 also helped bolster prices for the season. Almond prices were also up sharply, reflecting reduced 1995 production. Expected smaller crops of peaches, cherries, and blueberries this summer and another small harvest of pears this fall will continue to support grower prices during the second half of 1996. Grape prices this fall and through early 1997 are expected to remain strong, reflecting nearly the same production as last year, a generally good quality crop in California, and continued strong demand. All-apple grower prices during 1996/97 will likely average the same as last year's strong level, reflecting a relatively unchanged 1996 U.S. apple crop and continued tight supplies of processing apples. Strawberry prices this summer and almond prices in 1996/97 may slip given the forecast of a larger new crop. Higher retail prices for apples, grapefruit, peaches, pears, bananas, and grapes raised the consumer price index for fresh fruits during January-June 1996 to 229, up 7 percent from a year earlier. Light supplies of summer noncitrus fruits will likely keep the index strong this summer while increased production of western crop apples and a large California table grape crop could weaken the index this fall. A potentially smaller pear crop, however, may offset some of the downward pressure on fresh fruit prices this fall. U.S. apple production in 1996 is forecast at 10.7 billion pounds, about the same as last year. Cold weather and excessive moisture delayed blooms and reduced crop potential in many apple-growing States. Smaller crops in many central and eastern States will be offset by expected larger crops in Washington and California. Apple production is expected to be up 15 percent in the western States, but down 29 percent in the central States, and down 15 percent in the eastern States. The larger western crop and the expected smaller fruit size of the Washington crop are likely to put downward pressure on fresh-market apple prices. However, continued tight supplies of processing apples and apple juice stocks will likely help to maintain a relatively strong average all-apple price. California grape production is expected to rise 3 percent from a year ago in 1996, with wine varieties up 1 percent, table varieties virtually unchanged, and raisin varieties up 6 percent. Low chilling hours this winter, particularly in the Coachella Valley, diminished fruit bud formation and reduced yields. Barring any adverse weather, however, other California grape-production areas are expecting typical yields and a good quality crop. Total U.S. grape output is forecast only fractionally above last year, likely keeping prices strong. USDA's August forecast puts the 1996 U.S. pear crop 17 percent smaller than a year ago, with production of Bartlett pears on the Pacific Coast down 18 percent and total U.S. production of other varieties down 17 percent. Sharply smaller crops in Washington and Oregon will likely offset the expected 9-percent gain in California's Bartlett output. California peach production in 1996 is forecast up 19 percent from a year ago, but sharply reduced crops in many States, especially Georgia and South Carolina, will lower the U.S. output an estimated 13 percent. Total freestone peach production, mainly for fresh use, is forecast down 31 percent, while California clingstones, mostly for canning, are expected up 16 percent. The 1996 U.S. sweet cherry crop was down 19 percent from a year earlier, reflecting reduced production in Washington, Oregon, Michigan, Pennsylvania, and New York. Low chilling hours during the winter limited California's production potential. California's production was up 26 percent from 1995's weather-reduced output, but 52 percent below 1994's bumper crop. California and Washington grow mostly Bing cherries and other sweet varieties for the fresh market. Fresh sweet cherry prices averaged higher than a year ago, due partly to a 33-percent drop in Washington, the largest domestic source. This year's U.S. tart cherry production dropped 35 percent from 1995, with smaller crops in all producing States except Utah. Production declined 42 percent in Michigan where nearly three-fourths of U.S. tart cherries are grown. Low stocks of frozen tart cherries and a small crop helped to boost prices. Large gains in California and New Jersey strawberry production are compensating for smaller outputs in Florida, Washington, Oregon, and Michigan. USDA forecasts 1996 commercial strawberry production in the six major producing States to be up 16 percent from a year ago. Increased supplies, including imports, are forcing fresh prices down. More fresh supplies and lower prices will likely encourage fresh strawberry consumption to increase from 3.76 pounds per person in 1995. Industry sources expect blueberry supplies to be lighter this summer, pushing grower prices up. Cultivated blueberry production will likely decrease in Michigan and other producing States except New Jersey, Washington, and Oregon. Fresh use and processing use of the new blueberry crop will be down this summer. Preliminary indications from the California Kiwifruit Commission suggest a slightly larger kiwifruit crop in 1996 that could weaken prices in 1997. California's kiwifruit production decreased for the third straight year in 1995. Increased imports made up for the decline, maintaining U.S. supplies and holding prices down. Consumption rose from 0.503 pounds per person in 1994 to 0.514 pounds in 1995. Hawaii's banana crop in 1996 decreased for the second straight year due to adverse weather. New acreage is being planted in stages and production is anticipated to increase next year. U.S. fresh banana imports in 1995 were down 1 percent from year-earlier levels, lowering domestic supplies and consumption. Imports during January-May 1996 were virtually unchanged from last year, and if they remain unchanged for the rest of 1996, higher prices could be expected. Limited supplies of stone fruit and pears will also help support banana prices during the remainder of 1996. Imports will likely boost U.S. mango and papaya supplies in 1996. Mango and papaya imports, mainly from Mexico, increased in 1995, pushing U.S. supplies above a year earlier and raising consumption to a new record. Imports and consumption were lower for fresh and canned pineapple, but higher for pineapple juice. The 1995/96 U.S. orange crop was up about 2 percent from 1994/95, and the second largest on record. A large California crop led to an abundant supply of fresh-market oranges. Although the California Valencia crop was up 8 percent, good fruit quality and strong demand raised f.o.b prices. Meanwhile, higher juice yields boosted orange juice supplies despite a slightly smaller Florida crop. Orange juice prices were also above last year's because of reduced carryin stocks and strong domestic demand. The 1995/96 U.S. grapefruit crop was down 5 percent from a year earlier. Florida's crop was 6 percent smaller, accounting for 80 percent of U.S. grapefruit production. California's crop was up 2 percent. Florida grapefruit destined for the processing market declined about 12 percent. Total Florida fresh shipments increased 3 percent in 1995/96, but the growth was in the export market. Florida domestic f.o.b. prices increased for both fresh white and red grapefruit. Total U.S. tree nut production will likely be up in 1996, reflecting expected larger almond and walnut crops in California. Almond production is forecast up 43 percent from 1995's sharply reduced output, likely forcing prices down in 1996/97 and boosting domestic and export demand. Despite increased production, walnut supplies are expected to remain unchanged due to slightly lower beginning stocks. Therefore, walnut prices in 1996/97 are expected to remain good. Pistachio and pecan crops are expected to be about average size, although smaller than in 1995. Hazelnut production is expected to be much lower this year due to alternate-bearing characteristics of this nut. Hawaii's macadamia production will likely continue to trend upward due to the increasing number of bearing trees. For more information, contact Agnes Perez (202) 501-6779. Printed copies of FRUIT AND TREE NUTS Situation and Outlook will be available in about a week. Text of the full report will also be available electronically. For details on electronic access, call (202) 219-0515. ENDOFFILE