Specialty crops overview – 1992 retail prices on fresh fruits and vegetables generally lower than previous year with greatest decrease seen in oranges; provision for 1992 flue-cured and burley tobacco program completed with burley ma

Specialty crops overview – 1992 retail prices on fresh fruits and vegetables generally lower than previous year with greatest decrease seen in oranges; provision for 1992 flue-cured and burley tobacco program completed with burley marketing quota and price support level announcement in February 1992; U.S. sugar consumption continues to rise in 1992 – U.S. Dept. of Agriculture, Economic Research Service Report

Higher prices for apples, pears, and tomatoes boosted overall retail prices for fruit and vegetables this winter, although tomato prices are expected to be seasonally lower during the spring. U.S. sugar consumption continued growing in 1991, although at a slower pace than during the previous 2 years. Marketing quotas for tobacco have been announced for the 1992 season, 54 million pounds lower than in 1991 for burley and 14 million pounds higher for flue-cured. #For the latest update on specialty crops, see tables 20-22.]

Fresh Fruit & Vegetable Retail Prices Lower

The Consumer Price Index (CPI) for all fresh fruits remains slightly lower than a year earlier, but orange prices are much lower while apple prices are higher. The February CPI for fresh oranges was down 20 percent from a year earlier, and for fresh apples was up 9 percent. For all fresh fruit, the CPI was 4 percent lower than the year before. Apples, bananas, and oranges are the major items in the fresh fruit CPI.

California fresh orange prices dropped in 1991/92 following unusually high prices in 1990/91 when cold weather damaged the orange crop. Production recovered in 1991/92, and prices this year are closer to usual seasonal levels. Florida shipped a larger volume of fresh orange earlier this year, helping to hold down fresh prices.

The higher prices for fresh apples are due in part to lower production in the Western states, but primarily to strong export demand. A short 1991 European apple crop combined with greater market access to Pacific Rim countries is boosting U.S. exports. Retail apple prices are expected to continue above a year earlier during the remainder of the spring and summer with continuing strength in export demand.

For bananas, the CPI was 4 percent higher than 12 months earlier. Banana prices are expected to move seasonally higher during the spring. Weekly shipment volume was running about even with a year earlier as of the middle of February.

Retail prices for pears also are expected higher this spring than a year earlier. Pear production in 1991 was down 6 percent from 1990, and stocks as of the beginning of February were 5 percent below a year earlier.

The second-quarter retail price index for all fresh vegetables is expected to be down from a year earlier because of lower potato, lettuce, and tomato prices. Potatoes, lettuce, and tomatoes account for a major share of the overall CPI for fresh vegetables.

Record-large 1991 fall potato production in the Western states has kept retail potato prices low. Western states are a major source of fresh potatoes from storage. Prices are expected to remain below year-earlier levels through the spring as shippers work off record storage stocks.

Tomato prices were relatively high during February and March after excess rain in Mexico caused a gap in supplies. Prices are expected to slip during April and May when Florida begins its seasonally high-volume spring shipments.

F.o.b. prices for head lettuce have been at the minimum levels needed to cover harvesting and packing costs since December. Cooler weather at the end of 1991 diminished whitefly populations in California and Arizona desert areas, limiting damage during the winter. The expected lower output and higher prices for lettuce, due to the whitefly, did not materialize. Instead, regrowth and replanting increased output and helped lower prices.

Tobacco Program Provisions Set

Announcement of the burley marketing quota and price support level in February completed the provisions for the 1992 flue-cured and burley tobacco program. Acreage allotments and supports for five other kinds of tobacco were announced February 28. The basic quota for burley is 670 million pounds, 8 percent below the year before. The basic quota for flue-cured (announced in December 1991) is 892 million pounds, up 14 million from 1991. Support prices for 1992 tobacco will be $1.649 a pound for burley and $1.56 for flue-cured, up 6.5 and 3.2 cents from 1991.

Basic quotas for flue-cured and burley tobacco are the sum of: 1) domestic cigarette manufacturers’ stated purchase intentions during the 1992/93 marketing year; 2) average exports for the three most recent marketing years; and, 3) an adjustment to maintain loan stocks at the larger of 15 percent of the basic quota, or 100 million pounds of flue-cured and 50 million pounds of burley.

Potential tobacco marketings are determined by the effective quotas, which are the basic quota adjusted upward for underquota marketings (unused quota from the previous year) or downward for overquota marketings (tobacco sales in excess of the quota during the previous season). The 1992 effective quotas will be about 830 million pounds for burley (16 million less than a year earlier) and 898 million for flue-cured (up 7 million).

The decrease in the burley quota is due to reduced purchase intentions by manufacturer’s, and adjustments to maintain stocks at 15 percent of the previous year’s marketing quota. The flue-cured quota rose because manufacturer’s purchase intentions increased, the 3-year average of exports increased, and only a small upward adjustment was needed to maintain reserve stocks.

U.S. cigarette consumption declined in 1991 to 510 billion cigarettes, 3 percent less than in 1990. Higher cigarette prices, adverse publicity concerning health hazards of smoking, further restrictions on permissible smoking areas, and declining social acceptance of cigarette smoking all contributed to the decline. Consumers continued to switch to generic and mid-priced brands which can cost up to 50 percent less than full-priced brands.

Sugar Use Continues Up

U.S. sugar consumption continued growing in 1991, although at a slower pace than during the previous 2 years. Estimated consumption in calendar 1991, measured as sugar deliveries for food and beverage use, rose to 8.7 million short tons, raw value, up 0.7 percent from 1990. Based on data for the first three quarters, the largest growth was in the form of sugar used in bakery and cereal products.

Per capita consumption of refined sugar rose to 64.5 pounds, up almost 5 pounds since 1986. The 1986-91 increase follows nearly a decade of decline in per capita use. After peaking at 94.2 pounds in 1977, per capita refined consumption declined to a low of 60 pounds in 1986, as high fructose corn syrup (HFCS) made inroads in the sweetener market. The decline in sugar use halted after 1986 because the opportunities for replacing sugar with HFCS in manufactured food products became more limited after the conversion in the beverage industry was completed.

Since 1986, sugar’s share of total consumption of caloric sweeteners has remained constant at about 46 percent, down from 76 percent in 1977. Among other caloric sweeteners, including edible syrups such as maple and cane, honey, and corn sweeteners (HFCS, glucose, and dextrose), HFCS is the leading sweetener. In 1991, HFCS accounted for 35 percent of total caloric sweetener consumption. #Glenn Zepp (202) 219-0883]

COPYRIGHT 1992 U.S. Department of Agriculture

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