Horticultural Market Outlook

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Horticultural Market Outlook
Fruits and Vegetables
Tim Woods Jim Mansfield Agricultural Economics
University of Kentucky
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Source USDA - Kentucky Agriculture Statistics
Service
3
Source USDA Kentucky Agriculture Statistics
Service
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(No Transcript)
5
2002 Nursery Stock Acres (thousand)

21
8
26
1
4
5
11
38
18
1
6
1
7
8
4
36

• lt 10,000 Acres
• 10,000 30,000 acres
• gt 30,000 acres

Source USDA 2002 Census of Agriculture
6
2002 Floriculture Production in Sq Ft (million)

13
14
33
2
6
7
10
11
25
2
5
2
11
9
4
320

• lt 10 Million Sq Ft
• 10 30 Million Sq Ft
• gt 30 Million Sq Ft

Source USDA 2002 Census of Agriculture
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Green Industry

• Nationwide, total grower receipts for bedding
  plants have doubled in last decade
• KY nursery/greenhouse growers -
• 79 million cash receipts in 2005
• Floriculture Industry leads in sales growth, up
  3 million to 43 total

Sources USDA/ERS Floriculture and Nursery
Crops Situation and Outlook Yearbook, June 2005
Sep. 2005 USDA/Kentucky Agriculture Statistics
Service
Agricultural Economics
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Value of KY Wholesale Greenhouse Nursery Sales,
1993-2005
Source USDA/ERS Floriculture and Nursery Crops
Situation and Outlook Yearbook, May 2004.
Includes Christmas trees, vegetable plants..
Agricultural Economics
9
2002 Produce Acres (thousand)

60
79
44
11
49
12
51
43
86
29
55
28
48
300
21
1,122

• lt 30,000 Acres
• lt 100,000 acres
• gt 100,000 acres

Source USDA 2002 Census of Agriculture
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2002 Produce Acreage (thousand acres)

0
0
543
230
35
281
2
6
33
238
275
6
2
246
12
36
5
101
14
60
44
79
2
0
83
45
13
11
50
37
10
12
51
4,105
40
43
86
106
29
197
76
55
48
28
300
21
351
1,122
50,000 to 100,000 acres 100,00 to
499,000 acres gt 500,000 acres
Source USDA Census of Agriculture 2002
11
1992-2002 Produce Acreage Changes (thousand
acres)

0
0
105
-9
-4
-92
1
-1
-28
-25
-50
-1
0
-13
-5
-2
2
0
-2
-11
0
2
-30
-12
3
-9
-6
-7
-5
17
0
-9
-5
0
823
5
5
34
0
11
-7
-24
-11
-2
45
-2
-57
-69
1 to 10,000 acres gain 11,00 to
45,000 acres gain gt 100,000 acres gain
Source USDA Census of Agriculture 1992 2002
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2002 Value of Farm Direct Marketing (million
dollars)

18
14
37
4
14
10
16
11
17
5
8
7
8
9
4
12

• lt 10 Million Dollars
• 10 30 Million Dollars
• gt 30 Million Dollars

Source USDA 2002 Census of Agriculture
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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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Fruits and Vegetables Kentucky Gross Farm
Sales, 2006

• 2006 Produce Sales Estimate
• 28 million
• 107 community farmers markets
• 6.5 million, 1800 vendors
• 78 Farm Bureau CRMs _at_ 120,000 Another 9
  million
• 4 produce auctions
• Another 2 million
• 2 Co-ops
• Another 500,000
• Niche processed products (berries, grapes, HB
  391), wholesale not through co-ops
  (grower-shipper), other direct sales
  (restaurants, CSA, etc) Another 8-10 million

Source NASS Ag Census, USDA_KY Ag Statistics
Service
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
others Source July 2005 USDA/ERS Vegetables
and Melons Situation and Outlook Yearbook (Table
1)
Agricultural Economics
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Fresh Market Romaine Lettuce?

• 110 increase in per capita consump. 94-2004
• California Company inquires about KY sources
• 95 of US Romaine is grown in CA AZ
• Freight costs from W. Coast are significant
• Possible contracts with salad processors?
• NC growers contract romaine for a Dole Co. Salad
  plant _at_ .25 / lb

Agricultural Economics
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Fresh Market Romaine Lettuce?

• NC NJ breakeven cost est. 6.15 7.00/ crt
• NC yields 30,000 lbs/ac_at_ .25 lb (9.50/crt)
• 7,500 gross - 5,000 cost 2,500 return to
  land, management machinery
• 5 yrs of CA F.O.B. prices rarely below 5.00
• Freight 4.50 in Aug Sept 2006

Agricultural Economics
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Fresh Market Romaine Lettuce?

• Production on 2-row irrigated beds, 26,200 plnts
• Specialized equipment needed
• Stainless steel 3 pt harvest conveyor 72,000
• Accurate transplanter (mechanical 500 model)
• Vacuum coolerBig bucks!...lease?

Agricultural Economics
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Organic Produce?

• Broader interest in organic food
• 20 annual growth for last 10 years (14 B 2005)
• Organic food sales channels
• 47 Conventional Supermarkets
• 44 Natural Food Stores
• 9 Direct Marketed
• Fresh produce accounts for 42 of all organic
  food sales
• 1/3 of organic produce sold under contract
• Trend towards larger growers direct to retailer
  sales

Sources Dimitri Greene, 2002 USDA
ERS-Oberholtzer, Dimitri Greene, 2005 Organic
Trade Asoc., 2004 Tondel Woods, 2006 S
Agricultural Economics
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Organic Produce?
Agricultural Economics
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2006 KY Fruit Season

• Good demand and prices for small fruit
• 500 commercial berry acres
• Blueberry acres planted, double to 120 ac
• Apple acreage reduced to less than 1,000 ac
• Peach acreage up 20 to 600 acres
• More wine grape acres reach full-bearing
  potential 410 acres

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1993 Wineries - 558
Alaska
26
1
2
1
1
6
35
6
6
31
2
16
2
5
7
7
4
10
1
6
6
336
7
3
2
5
2
2
1
3
13
Hawaii -- 1
50
3
20-49
10-19
1-9
Source US Census Bureau, County Business Patterns
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2004 Wineries 1,413
Alaska -1
1
109
5
12
12
2
16
87
3
22
1
85
2
5
6

33
4
18
25
21
6
19
1
27
2
5
28
9
749
5
5
12
15
5
6
13
5
2
2
1
4
3
29
Hawaii -- 3
50
14
20-49
10-19
1-9
Source US Census Bureau, County Business Patterns
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(No Transcript)
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Range of Grape Prices Paid By Regional Wineries,
2005/ton 86 wineries surveyed
Estimated KY Breakeven Price Per Ton
650-1050 Source Ernst Woods, 2005 Regional
Wine Grape Price Survey