Weather, input costs push fruit, vegetable prices higher

by Ron Sterk
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Just as drought in some regions of the United States and excessive moisture in others have wreaked havoc with some grain crops, many fruit and vegetable crops also have been adversely affected by cool, wet spring and early summer weather. The weather issues will translate to higher prices, especially when coupled with higher energy costs and reduced acreage in some cases as growers opted to plant higher-value grain or oilseed crops.

But it will be a mixed bag overall for fruits and vegetables as some are coming off high prices a year ago while others are rebounding from heavy supplies.

“Higher prices for energy, fertilizer and seed have pushed average prices paid for production inputs used by U.S. vegetable and melon growers up 7% during January-March of 2011, with an 11% increase expected during April-June,” the U.S. Department of Agriculture said in its June 23 Vegetables and Melons Outlook. Input prices rose 1% in 2010.

The department expects prices for processed vegetables to increase in 2011 due to smaller crops, reduced stocks, higher contract prices and higher processing costs, compared with 2010 when heavy stocks pressured prices.

Processing tomato production was forecast at 12.2 million tons, about even with 2010, but wholesale tomato product prices are expected to rise due to a 5% increase in grower contract prices and a 3% drop in

world tomato production.

In the Upper Midwest, where much of the nation’s processing vegetables are grown (except tomatoes), a cold, wet spring resulted in delayed planting, slow emergence and sluggish early growth, according to the U.S.D.A. Processors began raising list prices for many canned and frozen vegetables in April and May “in reaction to increased contract prices (due to competition with field crops), reduced stocks and weather delayed planting,” the U.S.D.A. said.

The cool, wet weather in the Pacific Northwest and northern Plains states also delayed dry bean planting and crop growth. The U.S.D.A. said the “season average dry bean price could equal or exceed $35 per cwt — well above that of 2010-11.”

In its June 30 annual Acreage report, the U.S.D.A. pegged 2011 dry bean area at 1,258,000 acres, down 34% from 2010. Not only did weather delay planting and slow development, but the crop also faced competition from strong prices for corn, soybeans and wheat, most of which were the highest since 2008 when planting

decisions were being made.

Some sweet corn processors in the Pacific Northwest contracted with growers at prices as much as 25% above year-ago levels, but still fell about 10% short of desired acreage as farmers opted to plant field corn or wheat, which were at the highest prices since 2008 around planting time, according to reports in the Capital Press, a newspaper that covers the region.

Additionally, cool, wet weather slowed crop development in the region and will limit double cropping corn after green peas, the reports said.

The new crop concerns come at a time when frozen vegetable stocks are down from what were seen as heavy supplies a year ago. May 31 stocks of all types of frozen vegetables (except potatoes), totaled 1,487 million lbs, down 8% from a year earlier, including sweet corn down 14%, carrots down 4%, green beans down 12% and green peas down 16%.

While not impacted as much by competing crops, fruit crops also have been affected by weather and higher input costs.

In its annual Cherry Production report last week, the U.S.D.A. estimated sweet cherry production in California, the nation’s second largest producer behind Washington, at 85,000 tons, down 12% from 2010, although later reports suggested a much smaller crop due to heavy rains during harvest. Despite smaller crops also in New York, Oregon and Utah, the U.S.D.A. forecast total U.S. 2011 cherry production at 324,830 tons, up 4% from a year ago.

Sweet cherry prices in the Pacific Northwest averaged about $78 per 20-lb box, up from $40.85 a year ago, according to the Capital Press. The cool spring also slowed cherry development, which means there will be limited volume for the key July 4 retail sales period.

Peach production in the three key states of California, Georgia and South Carolina was forecast down 3% from 2010 as a result of cool, wet weather in California and dry conditions in South Carolina and Georgia.

As with vegetables, supplies of all types of frozen fruit on May 31, estimated at 763 million lbs, were down 15% from a year ago, the U.S.D.A. said in its Cold Storage report. Supplies of the top five frozen fruits, which make up about 60% of the total, showed strawberries down 8%, apples down 15%, blueberries down 17%, cherries (sweet and tart) down 48% and peaches down 23% from a year earlier.

Despite weather’s effect on development and harvest timing of many fruits, the U.S.D.A. indicated supplies of most fruits, especially fresh market, would be adequate in 2011. But at the same time, prices paid to growers and paid at retail have been on the increase, due to seasonal shifts and delayed availability due to weather conditions.

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