Vegetables Market Outlook Samuel D. Zapata 08-23-18 Small Acreage Horticulture Conference Weslaco, TX
Vegetable Industry Overview Supply and Demand Challenges and Opportunities
Vegetable Industry Overview
Value of Texas Agricultural Production
RGV Top Commodities All Other, 42.0% Cotton Lint, 25.2% Sorghum, 9.5% Grapefruit, 9.2% Fishing, 6.2% Vegetables, 7.9% Rank by Total Value Total Value ($1000's) Percent of RGV Total Cotton Lint $184,088 25.2% Sorghum $69,144 9.5% Grapefruit $67,341 9.2% Vegetables $57,953 7.9% Fishing $45,297 6.2% RGV Total $731,262 2.8% State Total $26,138,870
Vegetable Acres in Production 1,400,000 1,200,000 29% 1,000,000 24% 800,000 600,000 400,000 200,000 9% 8% 7% 5% 5% 4% 3% 3% 3% 0 U.S.: 4,180,894 acres, 72,045 farms Texas: 124,133 acres, 2,296 farms Source: 2012 Census of Agriculture
Vegetable Farm Size US US TEXAS 8% 4% 5% 8% 4% 5% 9% 5% 6% 18% 18% 65% 23% 65% 57% 0.1 TO 4.9 ACRES 5.0 TO 24.9 ACRES 25.0 TO 99.9 ACRES 100 TO 249 ACRES 250 OR MORE ACRES ~58 ac/farm ~54 ac/farm Source: 2012 Census of Agriculture
Vegetable Farm Ownership 8% 7% US 1% 2% 8% 7% US 1% 2% 7% 4% TEXAS 1% 2% 82% 82% 86% Family Family Corporation Other Partnership Non-Family Corporation Source: 2012 Census of Agriculture
Top Vegetables Grown PEPPERS BROCCOLI CAULIFLOWER SQUASH CABBAGE PUMPKINS CARROTS CUCUMBERS PEAS SPINACH US GARLIC CELERY ASPARAGUS ARTICHOKES SPINACH CABBAGE PEPPERS PUMPKINS CARROTS TEXAS SQUASH ONIONS SWEET POTATOES POTATOES CUCUMBERS POTATOES MELONS BEANS ONIONS LETTUCE BEANS TOMATOES SWEET CORN MELONS Source: USDA NASS
Million Dollars Value of Vegetable Sales 18,000 16,000 16,851 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 U.S. 475 Texas Source: 2012 Census of Agriculture
Crop Value Comparison Commodity Acreage (million) Market Value ($ million) AcreValue ($/ac) Corn 90.17 48,465 538 Soybeans 90.14 41,007 455 wheat 46.01 8,142 177 Cotton 12.61 7,227 573 Sorghum 5.63 1,175 209 Vegetables 2.57 13,838 5,386 Tree Nuts 2.02 9,024 4,477 Citrus 0.71 3,439 4,837 Source: USDA NASS
Crop Value Comparison Commodity Acreage (million) Market Value ($ million) AcreValue ($/ac) Corn 90.17 48,465 538 Soybeans 90.14 41,007 455 wheat 46.01 8,142 177 Cotton 12.61 7,227 573 Sorghum 5.63 1,175 209 Vegetables 2.57 13,838 5,386 Tree Nuts 2.02 9,024 4,477 Citrus 0.71 3,439 4,837 Source: USDA NASS
Crop Value Comparison Commodity Acreage (million) Market Value ($ million) AcreValue ($/ac) Corn 90.17 48,465 538 Soybeans 90.14 41,007 455 wheat 46.01 8,142 177 Cotton 12.61 7,227 573 Sorghum 5.63 1,175 209 Vegetables 2.57 13,838 5,386 Tree Nuts 2.02 9,024 4,477 Citrus 0.71 3,439 4,837 Source: USDA NASS
Supply and Demand
Milliom pounds U.S. Consumption and Production of Fresh Vegetables 65,000 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Produced Consumed Source: USDA-ERS
Factors Affecting the Demand for Vegetables Per capita income Price differentials Change in consumer preferences Seasonality Fresh vs. processed Innovation and convenience
Real Median Household Income
Price ($/cwt) Historical Vegetable Prices 70 60 50 40 30 20 10 0 Dark Green Red & Orange Starchy Other Source: USDA-ERS
Historical Vegetable Prices Commodity 1970 1980 1990 2000 2010 2017 % Change 2010-2017 ------------------------------------------------------- $/cwt --------------------------------------------------- Dark Green 9.0 18.5 19.3 27.0 38.0 48.7 28% Head lettuce 4.8 8.9 11.5 17.3 21.1 36.4 73% Spinach 11.4 24.8 28.2 31.8 42.7 64.5 51% Red & Orange 8.9 18.1 16.8 20.7 29.2 29.2 0% Tomatoes 11.2 20.7 27.4 30.7 48.2 37.3-23% Carrots 5.1 11.3 11.9 13.1 26.6 30.1 13% Starchy 5.3 10.7 11.5 11.9 19.3 19.8 3% Potatoes 8.0 5.3 12.7 10.6-17% Sweet corn 5.3 10.7 15.0 18.5 25.9 29.1 12% Other 9.4 30.0 31.0 41.5 47.7 55.4 16% Brussels sprouts 13.5 21.5 23.1 34.4 45.0 69.9 55% Artichokes 10.3 34.7 29.5 60.3 50.2 70.0 39% Total 9.2 24.5 24.2 31.9 40.2 46.3 15% Source: USDA-ERS
Fresh Vegetables per capita Availability 250 200 150 100 50 0 Dark Green Red & Orange Starchy Legumes Other Source: USDA-ERS
Fresh Vegetable Availability Commodity 1970 1980 1990 2000 2010 2017 % Change 2010-2015 ------------------------------------------------------- pounds/year --------------------------------------------------- Dark Green 23.8 27.9 35.9 41.3 37.1 35.9-3% Head lettuce 22.4 25.6 27.7 23.5 15.9 13.5-18% Spinach 0.3 0.4 0.8 1.4 1.7 1.7 3% Red & Orange 27.0 28.6 42.0 49.6 53.7 55.8 4% Tomatoes 12.1 12.8 15.5 19.0 20.6 20.5 0% Carrots 6.0 6.2 8.3 9.2 7.8 8.8 12% Starchy 69.6 57.6 53.5 56.2 46.1 42.7-8% Potatoes 61.8 51.1 46.7 47.1 36.8 34.1-8% Sweet corn 7.8 6.5 6.7 9.0 9.2 8.6-7% Other 32.4 36.3 43.9 51.5 51.3 50.7-1% Brussels sprouts 0.3 0.3 0.3 0.3 0.3 0.7 60% Artichokes 0.5 0.6 0.8 1.2 1.5 1.4-4% Total 154.4 151.8 176.4 200.7 190.0 186.7-2% Source: USDA-ERS
Fresh vs. Processed
Innovation and convenience
Social Media
Food as social status? In order to gain and hold esteem of men it is not sufficient merely to posses wealth or power. The wealth or power must be put in evidence, for esteem is only awarded on evidence. Thorstein Veblen (1857-1929) 25
Is it possible? 26
Factors Affecting the Supply of Vegetables Competition Trade Weather Input prices Labor
Source: TDA
Global Production Seasons Adapted from NOAA
Million pounds U.S. Net Trade of Fresh Vegetables 15,100 10,100 5,100 100 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015-4,900-9,900-14,900 Exports Imports Net Trade Source: USDA-ERS
Sources of Imported Vegetables to the U.S. 2017 Total value: $8,000 Guatemala, $125 India, $2 Spain, China, $180 $51 Rest of Peru, $329 World, $427 Million Dollars Canada, $1,414 Mexico, $5,472 Source: USDA-FAS
Mexican Fresh Vegetables Exports to U.S., 2017 Selected Vegetables: $5,474 Million Dollars Tomato GH, $1,045.00 Other Vegetables, $1,617.00 Asparagus, $422.00 Squash, $341.00 Cucumber, $270.00 Onion, $303.00 Bell Pepper, $242.00 Roma Tomato, $431.00 Broccoli, $248.00 Chili Pepper, $271.00 Bell Pepper GH, $284.00 Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
Canadian Fresh Vegetables Exports to U.S. 2017 Total Value: $1,414 Million Dollars Bell Peppers GH, $230.00 Other Vegetables, $387.00 Tomato GH, $294.00 Russel Potato, $45.00 Cucumber, $63.00 Peppers, $47.00 Onion, $35.00 Red Skin Potato, $47.00 Potato, $67.00 Carrot, $48.00 Mushrooms, $149.00 Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
Total Availability (%) Share of Imported Fresh Vegetables 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 1980 1990 2000 2010 2017
Drought Conditions
How Thirsty is Your Food?
Fertilizers Use vs. Source: USDA-NASS
Fertilizer Prices 400.0 PPI, base=2003 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 All fertilizers Nitrogen Phosphate Source: USDA-NASS
Challenges and Opportunities
Challenges Labor shortages Food safety Trade
Labor Cost Share
Legal Status of Farmworkers
Temporary Farmworkers (H2-A)
H-2A Wage
Food Safety Cannot control every possible risk Vegetables are very safe Consumers expect zero risk Foodborne outbreaks are very visible
Number of Refusals Fruit and Vegetable Import Refusals 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2002 2004 2006 2008 2010 2012 2014 2016 2018 Source: FDA
Number of Outbreaks Million Pounds Vegetable Related Foodborne Outbreaks 1,500 1,400 46,000 1,300 1,200 1,100 1,000 44,500 43,000 41,500 900 40,000 800 700 38,500 600 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 37,000 Outbreaks Availability Source: USDA-ERS, CDC
Mexico Main Highway Network 2006 Mazatlán Durango Highway: > 140 miles 114 bridges 61 tunnels 2012 Reduce transportation cost: Travel time: >6hrs Saving of $500 -$1,500 per load
Baluarte Bridge
U.S. Population Density, 2010 Nogales, AR Pharr, TX Adapted from Wang et al., 2014
U.S. Imports of Fresh Produce from Mexico
Opportunities Food spending Dietary guidelines
Consumer Expenditures on Food
BRFSS, 1990, 2000, 2010 (*BMI 1990 30, or about 30 lbs. overweight for 5 4 person) 2000 2010 Source: CDC No Data <10% 10% 14% 15% 19% 20% 24% 25% 29% 30%
Dietary Guidelines for America Food Pyramid: 1992 My Plate: 2010 Suggested Actual
Cups Ounces Historical Daily Food Availability 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 Protein Grains 1.9 1.7 1.5 1.3 1.1 0.9 0.7 0.5 Dairy Fruits Vegetables
Changes needed to meet 2015-2020 Dietary Guidelines for Americans (DGA) Food Group Units Recommended Available 2015 % Change Fruits cup/wk 14 5.8 140.1% Vegetables cup/wk 17.5 12.0 45.2% Dark Green cup/wk 1.5 1.1 40.6% Red & Orange cup/wk 5.5 1.6 235.5% Starchy cup/wk 5 4.4 12.4% Legumes cup/wk 1.5 1.6-4.7% Other cup/wk 4 3.3 20.4% Grains oz/cup 42 47.0-10.6% Protein oz/cup 38.5 52.6-26.8% Dairy cup/wk 21 10.6 99.0% Based on USDA-ERS and DGA
Changes needed to meet 2015-2020 Dietary Guidelines for Americans (DGA) Food Group Total Available Total Needed Difference ----------------------- million pounds ------------------- Fruits 80,401 193,075 +112,674 Vegetables 122,216 212,381 +90,165 Dark Green 8,374 11,772 +3,399 Red & Orange 31,523 105,773 +74,251 Starchy 44,033 49,497 +5,463 Legumes 3,066 2,922-144 Other 35,220 42,416 +7,196 Grains 55,754 49,863-5,891 Protein 145,432 106,467-38,965 Dairy 201,407 400,834 +199,427 Based on USDA-ERS and DGA
Thank you! Samuel D. Zapata samuel.zapata@ag.tamu.edu @SZapataD12