FRUIT AND TREE NUTS--SUMMARY March 25, 1997 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(FTS-279) will be available 2-3 working days following release of this summary. ------------------------------------------------------------------------------ FRUIT AND TREE NUT GROWER PRICES HIGHER THIS WINTER This winter, grower prices for fruit and nuts averaged 3 percent higher because supplies of most noncitrus fruit were lower. Prices, however, began to decline in February and will likely continue to fall until harvest of noncitrus crops begins in late spring and summer. U.S. orange production is expected to increase 7 percent from last season and overtake the previous production record set in 1979/80. California- Arizona navel orange production is up 3 percent. The record-setting Florida orange crop, mostly processed into juice, is forecast 9 percent over last season. Orange juice production in the United States in 1996/97 is expected to increase about 9 percent from last year's record because of increased juice yields as well as the large crop of Florida oranges. Near-term futures prices for frozen concentrated orange juice have been at their lowest since 1993. Retail prices have declined more slowly than futures prices. With pressure from growing juice supplies, retail prices should fall in the coming months. USDA forecasts a record grapefruit crop, 12 percent higher than last year. Slow movement early in the season compared with previous years has kept f.o.b. and retail prices above last year. With the greater emphasis on citrus in the market during spring, grapefruit shipments should increase and prices decline. Utilized production of noncitrus fruit, including berries, decreased in 1996 by 2 percent from the year before, and was the lowest since 1991. Cool, damp weather in the Pacific Northwest, dry weather in Michigan, and freezes in some areas, hampered crop development in 1996. In the winter of 1997, flooding in California and Washington exposed trees to extreme growing conditions. It is too early, however, to detect the damage to the new 1997 noncitrus and nut crops. The farm value of the U.S. 1996 noncitrus fruit crops was $7.2 billion, up 6 percent from 1995. With smaller crops, the preliminary season-average grower prices were up for a majority of the noncitrus crops. U.S. apple production reached 5.2 million short tons in 1996, up slightly from 1995 but 8 percent less than 1994's record crop. Washington State produced its second largest crop on record. Grower prices for apples were up 4 percent in 1996. With the slightly larger crop and higher prices, the value of the apple crop is projected to be $1.8 billion, up 4 percent from a year ago. U.S. grape production was down 6 percent in 1996 from the year before with declines in California and Washington. Increased demand by wineries resulted in the largest quantity of raisin-variety grapes being diverted from raisin use for wine crush since 1992. U.S. grape grower prices for fresh use increased 17 percent in 1996 and 16 percent for all processing uses. U.S. peach and pear utilized production declined in 1996. Untimely cold weather destroyed over 90 percent of peach crops in South Carolina and Georgia, and lowered pear crops in Washington and Oregon. Smaller peach and pear crops helped push up the fresh market and processing value of both crops in 1996. U.S. avocado production rose 9 percent in 1995/96 from a year ago. California's crop rose 10 percent, but Florida's crop fell 5 percent. The increased production brought grower prices down by 9 percent over the same period. The grower price for Florida avocados fell 3 percent; for California, 10 percent. In 1996/97, Florida's crop is expected to be about 18 percent higher than the previous season, and the California Avocado Commission estimates a 3- percent increase in the State's production. The 1996 strawberry crop was up 2 percent from the previous year with a record amount going to the fresh market. The large supply in the fresh market lowered average fresh strawberry prices by 7 percent from 1995. Despite lower production of processing strawberries, the average 1996 processed price fell 22 percent due to record beginning stocks. Total tree nut production rose 3 percent in 1996, with production up for almonds and macadamia nuts, but down for pistachios, pecans, walnuts, and hazelnuts. Grower prices were lower for all tree nuts, except macadamia nuts and pistachios, which resulted in lower grower cash receipts. Imports of fruit from Chile totaled $440 million in 1996, up 34 percent from a year ago. Tighter supplies of Chilean grapes along with new markets for Chilean winter fruit in other countries, helped boost prices. The value of total U.S. fruit and tree nut imports from Mexico in 1996 was $626.5 million, up less than 1 percent from 1995. From 1993 to 1996, the value rose 59 percent. In 1996, imports of Mexican grapes were 14 percent of the total fruit and tree nut import value. Other important products were mangoes, strawberries, orange juice, pecans, and fresh citrus (mainly limes). The value of U.S. fruit and tree nut exports to Mexico increased 16 percent to $124.9 million in 1996 as economic conditions in Mexico improved. The U. S. wine industry is seeing sharply higher producer and retail prices in 1997, mostly due to tight inventories and high domestic and export demand for quality wines. The strong market for U.S. wines is forecast to continue for several years as world wine supplies are sharply lower than 10 years ago. Printed copies of the Fruit and Tree Nuts Situation and Outlook report will be available in about 2 weeks. This issue contains a special article "The U.S. Wine Situation and Outlook for 1997." For more information contact Susan Pollack (202) 219-0505. The text of the report will also be available electronically. For details, call (202) 219-0515. END_OF_FILE