COVID-19-induced market shifts continue to upend many aspects of the food supply chain; from widespread transportation hurdles complicating the movement of inputs and goods, to the lingering pressures of underlying inflation on consumer purchasing behavior.
USDA’s latest Cold Storage Report, released last Monday, reveals the impacts of these factors and others, such as the past year’s drought, on stores of some core food items. The monthly report, provided by USDA’s National Agricultural Statistics Service, shows the end-of-month volume of commodities in longer-term (30+ days) cooled storage throughout the U.S. An important market-moving report, it covers most commodities that require cold transport, ranging from eggs to fruits and vegetables to dairy and meat. The January 2022 report reflects the ending-year stocks for 2021.
Unlike the higher cash receipts received overall for livestock products and most row crops, total fruit and vegetable receipts are expected to drop about 10% each from 2020 or by just over $4 billion across both categories. For vegetables, this is linked to both an average reduction in prices received and lower volume produced from last year.
The November Vegetable and Pulse Outlook found that despite dismal growing conditions in Western states courtesy of severe drought, shipping-point prices for fresh veggies averaged 18% below the 2020 average for the first nine months. On the utilized production side, processing vegetable production dropped 4.6% and dry beans, peas and lentils dropped over 35% with only fresh vegetables up by 3.5%. Lower prices have pushed a modest increase in retail shipments of vegetables, eating into some frozen stocks and leading to the 4% drop in year-over-year cold storage volumes and the five-year (2015-2020) average. As the yield impact of Western drought becomes more and more apparent across vegetable varieties, prices are expected to shift more positively.
Potatoes have been able to buck the price drop trend amongst vegetables. The 2% smaller crop from 2020 (a fourth consecutive annual decline) combined with strong North American and international processing demand lifted U.S. seasonal-average potato prices above $10/cwt for an average 14% price increase between 2020 and 2021. Drought in large potato-producing states like Washington and Idaho, which account for 55% of U.S. production, dropped their potato production rates by 9% and 7%, respectively. Paralleling production declines, potato stocks have dropped 5% from last year and 6% from the five-year (2015-2020) average.
Record prices are expected into 2022 as demand continues to bite in a smaller supply.
Fruit dynamics have been mixed on the price and production front. According to the most recent Fruit and Tree Nuts Outlook, citrus production across the country dropped 6% – with a 28-year low in Texas, equating to a 40% drop between 2020 and 2021. In Arizona, lemon production dropped 55%. Citrus greening disease, attrition in bearing acreage and high temperatures are to blame for these reductions. Oranges faced steep price declines (11%) year-over-year while grapefruit (+42%) and lemon (+52%) prices climbed.
For non-citrus fruits, many, such as apples, peaches, cherries, cranberries, pears and grapes, were forecasted have stronger or stable production from last year, with non- drought areas offsetting regional losses. Prices for some fruits, such as strawberries (-34%) and peaches (-8%), dropped but were somewhat offset by increases in apples (+23%), grapes (+6%) and pears (+7%).
Year-round demand for fresh and frozen fruit continues to increase as consumers focus on healthier lifestyles – especially amid continued viral spread concerns. Like vegetables, the average price outlook across fruits looks strong going into 2022 given supply and demand conditions. Correspondingly, frozen stocks of fruit remain 8% below 2020 levels and a whopping 30% below the five-year (2015-2020) average.
For more information:
Daniel Munch
American Farm Bureau Federation
Tel: +1 202 406-3669
Email: dmunch@fb.org
www.fb.org
