Smaller vegetable and melon area pushes prices higher

by Ron Sterk
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The effect of competition for limited acreage is showing up in many areas of agriculture as the 2008 growing season progresses. The latest indication that record high corn, soybean and wheat prices last fall and earlier this year "took" area from other commodities, including food items, was illustrated in the latest Vegetables and Melons Outlook from the U.S. Department of Agriculture.

Planted area for fall potatoes, when about 90% of all potatoes are grown, was the smallest since 1951. Growers in Idaho, the top potato producing state, reduced area 14%, to the smallest since 1968.

Potato acreage is estimated to be down 8% from a year ago partly due to competition for acreage with sugar beets or wheat in Idaho and corn or wheat in other growing regions, the U.S.D.A. said.

"Reflecting dwindling supplies, reported July prices for fresh-market potatoes averaged the highest on record at $18.61 per cwt," the U.S.D.A. said.

Similar acreage reductions and higher prices were seen in other food crops.

Melon area for harvest was down 8% from 2007 while prices in July averaged 42% above year-ago values. Watermelon area had increased in 2005 through 2007, but this year growers reduced area in each of the major producing states (except California, where area was unchanged), "usually a sign that revenue received during the previous year was insufficient relative to other cropping possibilities," the U.S.D.A. said.

Dry edible bean area also was down 8% from 2007, but due to forecast record large yields, production is expected to drop only 5%, the U.S.D.A. said. Still, prices are expected to average at least 25% about the 2007-08 level. Area for dry peas and lentils is down about 1% and 8%, respectively, but prices are forecast to hold strong due to low carryover stocks and good export demand.

Although corn, wheat and soybean prices are well off their record highs, prices for some other crops still are rising and have yet to reach consumers, which will tend to prolong the effects of high prices on the economy. It also begs for more available land to plant, of which the largest "chunk" is in the Conservation Reserve Program, where farmers are paid not to grow crops.



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