Horticulture OutlookFall 2005

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• Horticulture Outlook-Fall 2005

Agricultural Economics
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Fruits and Vegetables Kentucky Gross Farm
Sales, 2005

• 94 community farmers markets
• 7-8 million, 1500 vendors
• 67 Farm Bureau CRMs _at_ 120,000 Another 8
  million
• Niche processed products (berries, grapes, HB
  391), wholesale not through co-ops
  (grower-shipper), other on-farm and direct sales
  (restaurants, CSA, U-pick, etc.) Another 7-11
  million
• 4 produce auctions
• 2 million produce sales
• 4 Co-ops
• 3-3.5 million

Source NASS Ag Census, UK Estimates
Agricultural Economics
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Percent Change in U.S. Per Capita Use of Selected
Fresh Produce Crops, 1994-2004
Others include eggplant, garlic, squash,
spinach, okra, pumpkins, greens, and some
specialties Source July 2005 USDA/ERS
Vegetables and Melons Situation and Outlook
Yearbook (Table 1)
Agricultural Economics
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2005 Per Capita Use Projections

• ERS forecasts minimal use gains in Ky. mainline
  vegetable crops
• Diversifying product lines is critical for
  commercial produce sales growth

Source USDA/ERS Preliminary Use Estimates for
2004-05
Agricultural Economics
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Fresh Potato Deal

• Lowest acreage since 1866
• Acreage reduction due to bid-buydown program,
  mainly in ID ND, by United Potato Growers of
  America
• Less supply resulted in higher prices
• Fresh potato use off 6 since 1994 all potato
  use is only down 2--less low-carb effect than
  expected
• Opportunities for Kentucky growers could arise
  from higher transportation costs possible
  contract availability for chipping potatoes (low
  margin)
• Sweetpotatoes also present local wholesale,
  direct marketing opportunity through fall
  winter months

Source Aug. 2005 USDA/ERS Vegetables and Melons
Situation and Outlook
Agricultural Economics
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Kentucky Produce Marketing Channels
Percent selling at least 10 of their produce
into given market channel
Source Ernst Woods, 2001-05 KY Produce
Marketing Practices Surveys Direct markets
include on-farm and off-farm retail, direct to
restaurant/grocer, and CSA
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U.S. Sweet Corn Shipping Point Prices 1995-2004
and 2005
Source USDA/ERS, UK Estimates
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U.S. Tomato f.o.b. Shipping Point Prices
Source USDA/ERS, UK Estimates
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Ky. Peppers Compare
Source USDA/AMS, UK analysis. Terminal markets
are spot markets, usually reflecting at least two
markups over producer prices.
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Cantaloupe Auction Prices
Source UK New Crop Opportunities Center
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National Fall Broccoli Outlook

• USDA ERS and NASS projected third-quarter
  broccoli prices declining 17 in 2005
• Lower than expected actual September prices
  indicate actual decline closer to 20
• 2005 California fall broccoli acreage is up 4
  (totaling 31,600 acres)
• USDA projects broccoli prices 15 lower than 2004
  for 4th quarter
• Transportation costs could play in favor of
  Eastern shippers

Source ERS-Vegetables and Melons Outlook (August
18, 2005) NASS-Agricultural Prices (Broccoli
f.o.b. prices /cwt.)
Agricultural Economics
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Broccoli Shipping Point Prices
Source ERS-Vegetables and Melons Outlook (Oct.
20, 2005) NASS-Agricultural Prices (Broccoli
f.o.b. prices /cwt.)
Agricultural Economics
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2005 KY Fruit Season

• 400 commercial berry acres
• Good small fruit quality
• Additional blueberry and grape acreage added to
  full-bearing potential
• Dry year affected tree fruit size, quality
• Continued interest in value-added fruit products

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2005 KY Fruit Econ Research

• SARE sponsored on-farm research documents 2-yr.
  establishment costs (preplant, planting, season
  after planting) for blueberries on marginal land
• pH 6.0 2230 (conventional)
• pH 5.0 2630 (sust./organic)
• Properly managed berry plantings are one of most
  profitable produce crops

• Update of winegrape establishment costs using
  current planting population recommendations
• Suggests improved economic viability for
  wholesale production of winegrapes for sale to
  area wineries
• Regional prices persist at profitable levels
  winegrape price survey will be updated to reflect
  this seasons

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Approximate Grape Prices Paid By Regional
Wineries, 2003/ton 110 wineries surveyed
Estimated KY Breakeven Price Per Ton
650-1050 Source Ernst Woods, Regional Wine
Grape Price Survey, www.uky.edu/Ag/NewCrops
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2005 KY Produce Markets Summary

• Record sales at 94 farmers markets
• Certified Roadside Markets increase
• Auction produce sales are projected to increase
  from about 1.5 to 2 million
• Shipping point prices in Kys season stronger
  than average across entire fresh vegetable sector
• Independent grower-shippers continue to capture
  additional marketing opportunities
• Co-op sales volume decreases
• On-farm and roadside markets continue to
  capitalize on consumer interest in locally
  produced foodanother strong fall festival season

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Produce Buyers Survey

• Surveyed 52 regional produce buyers
• Asked to identify consumer and industry trends
• Identified Ky. crops with high expansion
  potential
• Grape tomatoes
• Packaged salads and other fresh cut items
• Seedless watermelons
• Bell peppers (red, orange, yellow)
• Strawberries
• Cantaloupe
• Ethnic oriented products
• Watermelon
• Romaine Lettuce and other salad greens
• Vine Ripe Tomatoes
• Chile/Hot/Specialty Peppers

Source Woods Ernst, 2004
Agricultural Economics
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Emerging Ky. Produce Markets

• Ethnic markets Hispanic, Asian, E. European
• Value-added products from produce (HB 391,
  small-scale branding/processing)
• Farm branding at state parks, other restaurants
• Requires producers to develop relationship with
  chef and deliver consistently high quality
  products
• Many new producers participate in State Parks
  program in 2005good starting market of
  200,000 statewide door opened for direct meat
  sales
• New produce auctions Lincoln County, Bath County
  (Aug 2004), Mason County (2005)
• Success will demand grower base and larger volume
  wholesale buyers
• Wholesale deals with chain stores, restaurants,
  groceries, farmers market vendors

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Green Industry

• Nationwide, total grower receipts for bedding
  plants have doubled in last decade
• ERS estimates KY nursery/greenhouse growers to
  reach 77 million cash receipts in 2004 (record
  receipts)
• Larger greenhouse expansion, nursery production
  lead increase

Source USDA/ERS Floriculture and Nursery Crops
Situation and Outlook Yearbook, June 2005 Sep.
2005
Agricultural Economics
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Value of KY Wholesale Greenhouse Nursery Sales,
1993-2003
Source USDA/ERS Floriculture and Nursery Crops
Situation and Outlook Yearbook, May 2004.
Includes Christmas trees, vegetable plants..
Agricultural Economics
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Nursery Products Buyers Survey

• Regional nursery products survey reported
  increased quantities demanded of maple, magnolia,
  and oak, as well as larger container sizes for
  all trees
• Expected increases in larger BB (1 ½-3) and
  10-15 gallon containers
• Product quality is cited as most important
  characteristic of purchase

Source 2004 Nursery Products Buyers Survey.
Andrea Basham, Tim Woods, Matt Ernst UK AEC-EXT
2005-03
Agricultural Economics
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Nursery Products Buyers Survey
Source 2004 Nursery Products Buyers Survey.
Andrea Basham, Tim Woods, Matt Ernst UK AEC-EXT
2005-03
Agricultural Economics
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Nursery Products Buyers Survey
Source 2004 Nursery Products Buyers Survey.
Andrea Basham, Tim Woods, Matt Ernst UK AEC-EXT
2005-03
Agricultural Economics
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Developing New Crop Opportunities Upcoming
Training Sessions

• 900 am 330 pm
• November 10 Laurel County
• November 11 Franklin County
• December 13 Princeton
• Training focuses on marketing and how to help the
  client match with an enterprise that suits their
  strengths real-life case studies new marketing
  education materials and resources

Agricultural Economics