FRUIT AND TREE NUTS--SUMMARY March 27, 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. The complete text of FRUIT AND TREE NUTS is available 2-3 working days following release of this summary. ----------------------------------------------------------------------------- FRUIT SUPPLIES DOWN; PRICES UP Grower prices for fruit and nuts were up sharply this winter from a year ago. Grower prices will continue to rise seasonally until harvesting begins for late spring and summer crops. Prices will likely remain above a year ago in the spring as supplies remain tight for apples, pears, and strawberries. Stronger retail prices for fresh apples, grapefruit, lemons, and grapes helped raise the January consumer price index above December and last January. Total U.S. orange production is expected to be up 1 percent from last year, with production estimated at 11.7 million short tons for 1995/96. California-Arizona navel orange production is up 17 percent from last year. The Florida orange crop, which is mostly processed, is down about 2 percent from the bumper crop of a year ago. If realized, Florida's 1995/96 crop would be the third largest on record. Florida's orange production was only minimally affected by three freezes this winter. Orange juice production is expected to decline about 2 percent in 1995/96 from the previous year's record. Most of the decline is a result of lower juice yields this year, estimated at 1.48 gallons per box for concentrate (FCOJ), down from 1.50 gallons in 1994/95. Near-term futures prices for FCOJ have been above the previous 2 years for much of this season. With continued pressure of higher orange juice prices, retail prices may start to increase in the coming months. U.S. lemon production is forecast at 1.03 million tons in 1995/96, up 12 percent from last year and 4 percent higher than 1993/94. Average f.o.b. lemon prices this season are below last year in response to the larger crop. Lower prices this year should help the lemon export market. Grapefruit production is expected to fall 9 percent from last year's record, with smaller crops in all States. F.o.b. prices for fresh grapefruit averaged about 3 percent lower from November through February than a year earlier. An abundance of red grapefruit, along with extra large fruit size of the white seedless grapefruit, pressured prices downward this year. The good-sized crop and low prices should help support strong exports in 1995/96. Cool, very wet, and windy weather in the spring of 1995 in the Western States and a very dry summer, particularly in the Eastern States, hampered some noncitrus fruit crop development. Utilized production of noncitrus fruit, including berries, was down 7 percent in 1995 compared with 1994, and down 2 percent from 1993. The winter of 1996 exposed crop growing areas of the United States to various extreme weather conditions. It is still too early, however, to detect the damage to the new 1996 noncitrus crops. Growers are concerned about lower fruit sets and lighter crops in 1996. USDA's preliminary estimate of the 1995 harvest shows total noncitrus crops valued at $6.6 billion, up 6 percent from the previous year. With relatively smaller 1995 crops compared with 1994, season-average grower prices were stronger for a majority of the noncitrus crops, namely apples, California apricots, bananas, sweet cherries, dates, nectarines, olives, papayas, peaches, pears, pineapples, and prunes and plums. U.S. apple production in 1995 was 4 percent smaller than in 1994 but still relatively large compared with previous years. Lighter supplies of generally good quality apples, along with strong domestic and export demand, have supported apple grower prices, estimated to be 29 percent higher in 1995 than the prior year. U.S. grape production declined 2 percent in 1995 from a year ago, and was also down 4 percent from 1993. Reduced production may be attributed to smaller crops in California, the largest grape-producing State, and in New York, Pennsylvania, Missouri, North Carolina, and South Carolina. The value of the 1995 grape crop was estimated to be $1.82 billion, down 3 percent from the prior year, and the lowest in 3 years, reflecting the smaller crop and lower processing prices. Increased fresh-market grape supplies during 1995/96 (July-June) may be attributed to the largest table-variety grape crop since 1992. U.S. peach and pear production declined in 1995 from a year ago. While the fresh-market value of both crops rose in 1995, processing value fell. The fresh-market freestone peach crop value rose as a result of a sharp increase in prices. California's clingstone peach (mostly canned) value declined as a result of a sharp drop in production. Continued strong demand for fresh-market pears helped strengthen their season-average grower prices, while large supplies of Bartlett pears weakened prices paid by processors. U.S. avocado production in 1994/95 increased 23 percent from the 1993/94 crop, with California contributing 89 percent of the total output and Florida 11 percent. About 98 percent of the 1994/95 U.S. avocado output was utilized fresh. The U.S. average grower price for avocados was 22 percent lower than the prior year and the sharp price drop brought the total crop value down 4 percent in 1994/95 from a year earlier. California's 1995/96 avocado crop is expected to be up about 3 percent from a year ago. As of February, seasonal shipments have been up from the same period a year ago. Florida's 1995/96 avocado crop may be slightly smaller than last year. Florida's seasonal avocado shipments are estimated to be down 4 percent from the prior year. The 1995 U.S. strawberry crop was estimated 9 percent below the record crop of 1994. Estimated average grower price for fresh-market strawberries was fractionally above a year ago in 1995, despite lower prices in California, New York, Oregon, Pennsylvania, and Washington--producers of 79 percent of the fresh-market strawberry output in 1995. Prices for processing strawberries averaged 10 percent lower than a year ago due to larger frozen carryover stocks of strawberries from 1994. In 1995, production of cultivated blueberries, cultivated blackberries, boysenberries, loganberries, and raspberries was 5 percent higher than a year ago, while the value of production declined 1 percent to $201.5 million. U.S. cranberry production in 1995 was down 12 percent from a year earlier, but total output was still 5 percent larger than the 1993 crop. Grower prices for the 1995 cranberry crop may average higher as a result of reduced production. Total tree nut production fell sharply in 1995 to the lowest level since 1986. Almond production was off substantially while production of other tree nuts was mostly higher. Grower prices were higher for all tree nut crops which resulted in higher grower cash receipts, except almond receipts which were slightly lower. Imports of fruit and tree nuts from Chile were down in 1995 from a year earlier. Strong European demand for fresh fruit contributed to the decline in supplies shipped to the United States. The North American Free Trade Agreement (NAFTA) has been in effect for over 2 years. While NAFTA is opening trade between the United States and Mexico by removing trade barriers and reducing tariffs, Mexico's devaluation of the peso in December 1994 is having more of an impact on trade between the two countries than NAFTA. U.S. fruit imports from Mexico fluctuate each year, mostly responding to production levels in the United States. Imports of most Mexican fruit into the United States were up in 1995. The level of imports for most of these fruits have shown continual growth throughout the nineties. Fresh fruit, especially limes, mangoes, and grapes, account for the majority of fruit products imported. Almost all of the U.S. fruit exports to Mexico are fresh noncitrus fruit, of which apples make up the largest share. The volume of all U.S. noncitrus exports to Mexico declined in 1995. Printed copies of the Fruit and Tree Nuts Situation and Outlook will be available in about 1 week. For further information, contact Susan Pollack (202) 219-0505. Text of the full report will also be available electronically. For details, call (202) 219-0515. END-END-END