2006 Vegetable and Ornamental Outlooks

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2006 Vegetable and Ornamental Outlooks
Agribusiness Economic Outlook Conference December
6, 2005 Wen-fei Uva Department of Applied
Economics and Management Cornell University
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VegetableOutlook
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2004 New York Vegetable Production

• Despite less than optimal growing conditions,
• The value of NY vegetable production increased
  about 3 to 392m, up from 381m in 2003.
• Higher prices for snap beans, eggplant, pumpkins,
  spinach and squash.
• If carrots, melons and broccoli were included in
  the survey, the value could top 400 million
• Total acreage 168,000 acres, decreased about 3
  from 2003.
• Sweet corn remains the highest value vegetable
  crop grown in NY (60 million), despite a decline
  of nearly 10,000 acres.

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2005 New York Vegetable Production

• The hot and dry summer weather in 2005 had
  various effects on crops
• Crops matured 10 to 14 days earlier than normal
  because of the heat.
• Growers who did not have irrigation suffered.
• Heat-loving crops (tomatoes, peppers, squash and
  sweet corn) with irrigation had good quality.
• While cool season crops like peas and snap beans
  did poorly.
• Mother nature threw a curve ball in the fall.
• On average, this year saw less disease, but more
  insect problems.

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Industry Outlook
Rising fuel costs, flavor and nutritional value
are three of todays hottest topics in the
produce supply chain.

• Growers are finding renewed interests from
  regional buyers in purchasing regional/locally
  grown produce.
• More supermarkets are promoting locally grown
  produce
• From Wegmans to Bi-Lo

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Industry Outlook
Growth of Alternative Food Outlets -
A typical American made 69 trips to a grocery
store in 2004, down from 72 in 2003. For the
first time, traditional grocery store did not
have a 100 percent penetration among U.S.
consumers. The main beneficiaries are
supercetners and dollar stores Convenience
stores are increasing their fresh produce
offerings
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Industry Outlook

• Produce for Better Health -----

In spite of on-going efforts to fight obesity,
obesity grew in all states but one between
2001-02 and 2003-04. Obesity in general, and
childhood obesity in particular, is a top issues
for many. - Produce plays an important role. 9
out of 10 Americans know about the food pyramid,
less than ¼ say it influences how they eat My
Pyramid 5 A Day The Color Way by the Produce
for Better Health Foundation Promotion by
McDonalds, Sesame Workshop and Wal-Mart
C is still for cookie, but it is also for
carrot, citrus and corn!
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Industry Outlook

• Nutritional Labeling -----

Restaurants, particularly fast-food outlets, are
trying to attract health conscious consumers.
. McDonalds printed nutrition information on
tray liners in its U.S. restaurants. Subway on
its napkins. Legislature debates on require
restaurants with more than 20 outlets to print
nutritional data on menus A logistical
disaster?? Ruby Tuesdays experience
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Industry Outlook

• Men Keep Their Forks in Steaks, But Women Prefer
  Produce -----

3 out of 4 primary grocery shoppers say they are
buying more nutritious food now than they did
three years ago. - Women are much more likely
than men to choose fruits and vegetables as their
favorite foods..
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• 2006 Empire State Fruit and Vegetable Expo
• - The Becker Forum

WITH CUSTOMERS IN THE DRIVERS SEAT, WHAT ROAD
WILL YOUR BUSINESS FOLLOW? MONDAY, FEBRUARY
13 HOLIDAY INN - GRAND BALLROOM Syracuse New York
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Ornamental Outlook
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2004 New York Floriculture Production

• Overall value of commercial sales of floriculture
  production increased 7 to 209 million in 2004.
• New York again ranked 5th in production value
• There were 837 floriculture growers in the state
  a decrease for the 7th consecutive year.
• Bedding plant is still the largest crop category
• But largest increases are seen in potted
  flowering plants and foliage plants.

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Industry Outlook
Growth in Professional Landscape Service
Growing at a rate of 13 annually for the last 5
years. The sale of new and existing homes is the
main driver Usually people hire landscapers in
the 2 to 3 years after the initial purchase to
install, update or maintain their lawn and
landscape.
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Industry Outlook
Do-It-Yourself Lawn and Gardening Activities
Fell 4 in 2004 - The 2nd consecutive year that
nationwide sales of consumer lawn and garden
products have stayed at about the same level. In
2004, 55 of households purchased lawn and garden
products at home centers. 44 made purchase at
mass merchandisers, and garden centers fell to
third place (42).
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Industry Outlook
Branding and Promotion
Growers are providing promotional material
supports to their buyers with retailer logos and
prices Plant labels, banners, signs, kiosks and
advertising materials can be produced
in-house Large nurseries, such as Monrovia
Growers, are leading the trend.
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Industry Outlook

• Big Box Challenges
• Home Depot and Kmart switched to a pay-by-scan
  program.
• Shift a large portion of inventory loss risk to
  grower vendors
• Many growers have merchandising forces in the
  stores to spruce up displays and replace
  shop-worn plants
• Hoping that additional sales from correct
  merchandising will pay for the labor
• With the new system, grower vendors also enjoy a
  certain degree of exclusivity in their plant
  category.

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Industry Outlook

• Global Production
• Many U.S. companies have set up off-shore
  production sites
• Fischer USA expanded into China Eastfields
  started with 12 acres in 2003, and an additional
  12 acres of greenhouse construction was completed
  in 09/2005
• In the last two years more than 1,000 growers
  were quarantined for a strain of Ralstonia on
  USDAs Bioterrorism Select Agents and Toxins
  List.
• USDA developed a certification program for
  offshore farms a phytosanitary certificate.

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