Concurrent Session B: Horticultural Outlook B02 Warren Hall, 1:30 to 3:15 PM Moderator: Brad Rickard

Transcription

1 Concurrent Session B: Horticultural Outlook B02 Warren Hall, 1:30 to 3:15 PM Moderator: Brad Rickard

2 Topics and Speakers Brad Rickard, Associate Professor, Dyson School Fruit and Vegetable Situation and Outlook (1:35 to 2:05 PM) Xiaoli Fan, Ph.D. student, Dyson School Wine and Nursery Situation and Outlook (2:05 to 2:35 PM) Rod Hawkes, Senior Extension Associate, Food Industry Management Program, Dyson School Consumer Trends Driving Produce Consumption (2:35 to 3:05 PM) General discussion and evaluation (3:05 to 3:15 PM)

3 Situation and Outlook for Fruits and Vegetables Brad Rickard, Associate Professor Dyson School of Applied Economics and Management January 20, 2016

4 Overview of Fruit Crop Trends in Recent Years In 2013 and 2014, U.S. fruit producers experienced very high prices for many crops. In 2015 we saw a slight fall in prices for many of the key fruit crops including apples, citrus, grapes, and strawberries, with modest price increases for lemons and pears. Overall, we see far less variability in consumer prices for fruit crops, but we did observe a fairly significant decrease in consumer prices for fruit crops in 2015 relative to 2014 (to levels seen in 2013).

5 Average U.S. Producer Fruit Prices

6 Average U.S. Consumer Fruit Prices

7 Situation Report for Apples in NYS and Elsewhere In 2015 we saw a substantial drop (~20%) in apple production in WA due to severe heat wave in August that produced smaller and poorer quality fruit Production in NY and MI was relatively big, and overall returns to apple growers in the east are at least as good as in Processing prices were up 20% in NYS due, in part, to underestimation of total crop size by processors Although plantings and production continue to increase since the mid-2000s, prices and returns continue to be relatively strong. Driven by expansion into export markets from WA, higher valued varieties, and stronger efforts by marketers to receive better fruit prices from retailers

8 Apple Production and Yields in NYS Consumer Fruit Prices

9 Average U.S. Producer Prices for Apples

10 Outlook for Fruit markets in 2016? In 2016 industry experts agree that we are likely to observe a substantial increase in apple production (notably in WA) Labor availability continues to be the most important consideration for producers, but related to this is the concern about a (phased) increase in the minimum wage. If labor comprises 40% of the total costs of production, and your labor costs increase from $9/hour to $15/hour (a 66% increase), that is effectively a 25% increase in your total costs (holding constant labor productivity) Hear about renewed interest/pressure among retailers for organic apples (fresh and processed)

11 Stored Apples as of January 1 in Recent Years

12 Vegetable Markets are Most Affected by the CA Drought

13 Overview of Vegetable Crop Trends in Recent Years In 2014, the U.S. produced 129 billion pounds of commercial vegetables and pulses with a value of $19 billion and area harvested of about 6.5 million acres. Despite ongoing drought and water shortages in California during 2014, where about 40 percent of vegetables and pulses are grown, total U.S. output volume rose 5 percent from Some substitution away from waterintensive crops and more imports

14 Slight Increases in Imports of Water-Intensive Crops in

15 Import and Export Projections for Vegetables (Billion $)

16 U.S. Producer Prices for Vegetables

17 U.S. Consumer Prices for Vegetables

18 Key Outlook Issues for F&Vs? (Nationally) Trade Agreements: TPP and TTIP (Regionally) Changes in School Lunch Procurement Incentives

19

20 School Lunch: The Issue There is much interest in expanding markets for locally produced foods and beverages among final consumers and institutional buyers Food serve directors in school districts receive a state reimbursement of $0.06 per lunch (since ~1990s) Should we consider providing an additional incentive to food service directors if they include local foods and beverages in their program (for school lunches)? Do they do some local procurement anyways? What food categories should be the focus? What level of incentive might make economic sense?

21 Potential Sales for Buy NYS Thursday Component Cost share% Total expenditure for NYS Potential expenditure for NYS sourced food if procured once per week Protein ,836,300 21,967,260 Whole grain 15 54,918,150 10,983,630 Fruit 15 54,918,150 10,983,630 Vegetable 25 91,530,250 18,306,050 Dairy 15 54,918,150 10,983,630 Total ,121, ,224,200

22 Some Results

23 Thank you! Questions or Comments? Brad Rickard

24 Motivation to Examine U.S.-EU Trade Source: Foreign Agricultural Service, United States Department of Agriculture Products U.S. Exports to EU (thousand $) % of Total Ag. Exports to EU Edible Tree Nuts 1,732, Soybeans 1,480, Heparin and Its Salts; Other 938, Animal Subsets Wine & Wine Products 470, Soybean Cake & Meal 406, Essential Oils 402, Wheat 316, Animal/Vegetable Fats & Oils 246, Beef & Veal,Fr/Ch/Fz 221, Feed, Ingredient & Fodder 208, Flue-Cured, stm 207, Fruit Juices 199, Sugar & Tropical Products, 194, Misc Fruit, Dried 189, Leather 182, Grain & Feed Misc 181, Flours, Isolates, Concentrate 152, Corn Oil 148, Horses, Purebred Breeding, 145, Live Vegetables, Prepare or 143, Preserve U.S. Total Agricultural Exports to EU-27 10,057, Products U.S. Imports from EU (thousand $) % of Total Ag. Imports from EU Wine & Wine Products 3,454, Essential Oils 1,924, Beer 1,586, Cocoa & Cocoa Products 842, Olive Oil 788, Sugar & Tropical Products 745, Grain & Feed Misc 685, Licensed Cheese Items 630, Pork Fresh, Chill Etc 367, Ot Oilseeds Product Nag 332, Olives, Prepare or Preserve 311, Coffee & Coffee Products 301, Vegetables, Prepare or Preserve 249, Feed, Ingredient & Fodder 245, Sugar & Related Product 235, Horses, Live, NESOI 233, Casein 233, Wheat Products 219, Non-Licensed Cheese 214, Nursery Products Exclude Cut 198, Flowers U.S. Total Agricultural Imports from EU-27 16,720,

25