Fruit and Tree Nuts Market Outlook - March 2016
ERS anticipates a decline in supplies of several major fruit crops in 2015/16 due to lower production. Declining supplies together with robust demand have supported farm and retail prices, which continue higher this year. The following interactive content is based on the Fruit and Tree Nut Outlook report.
Production forecast down for several major fruit crops, mixed for tree nuts
Production is forecast down for a number of major fruit crops in 2015/16. The U.S. citrus crop is forecast at a little less than 8 million tons, 12 percent lower than the 9 million tons produced in 2014/15. With the exception of tangerines/mandarins, all major citrus crops are forecast lower. Cold, wet conditions and disease in Florida are among the main factors behind the decline in citrus production. Apple and pear supplies are also down following smaller harvests in the fall of 2015.
Similarly, strawberry production in 2016 is projected down 14-15 percent from last year due to rainy and cold weather in Florida as well as a projected drop in California’s strawberry acreage. Reduced early-winter imports from Mexico, a major source of winter strawberries in the United States, have also contributed to the lack of supplies early this year.
U.S. almond output, which accounts for nearly two-thirds of U.S. tree nut production, is forecast down 4 percent from 2014/15, mainly due to lower yields. In contrast, slight increases are forecast for walnut and pecan production, with the walnut harvest potentially the largest on record.
Growers and consumers see strong fruit prices
With tight supplies and robust demand, U.S. growers are likely to see strong prices for most fruits in 2015/16. The grower price index—a measure of the average change over time in prices received by growers— was 135 (2011=100) in January 2016, up from both the January 2015 (123) and 2014 (128) indices. Higher prices for apples, strawberries, pears, grapefruit, and lemons are the primary drivers of the higher fruit price index.
Higher prices paid to growers often translate into higher retail prices. The Consumer Price Index (CPI) for fresh fruit was up 3 percent in January and 5 percent in February (compared to the same months in 2015), and the highest for each month since 1989. Higher retail prices for lemons, Red Delicious apples, strawberries, and Thompson seedless grapes have boosted the CPI during the first 2 months of 2016, according to data from the U.S. Bureau of Labor Statistics.