Vegetables and Melons Outlook - December 2011

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Fresh vegetables: Assuming no repeat of the December freezes of a year earlier, the outlook for fresh vegetables this winter indicates greatly improved supplies and much lower prices. At the same time, demand is expected to continue to slowly improve as consumers cautiously return to away-from-home meals. Assuming no freeze damage this winter, the seasonal price outlook strongly favors prices that are well below those of the freeze-affected highs of a year earlier.
Melons: During the fourth quarter of 2011, the shipping-point price for U.S. cantaloup will average around 17 cents per pound—about one-fourth lower than a year earlier. The U.S. market is transitioning to imported melons, largely from Central America, with the early winter outlook favoring average supplies and lower prices than a year earlier.
Processing vegetables: In the coming year, area of vegetables used for processing is expected to rise modestly for both canning and freezing purposes. Production of processing tomatoes has been little changed over the past 3 years, averaging 12.7 million short tons. With record large export demand supported by strong movement of paste in 2011, tomato processors are expected to contract for about the same area in 2012. However, with energy-based input prices remaining high and continued strength in alternative field crops, it appears likely that growers will be seeking another boost in contract prices from processors in 2012.
Potatoes: Although harvested area boosted fall production 6 percent in 2011, the preliminary farm price for all potatoes during November still averaged 3 percent above a year earlier at $8.26 per cwt. Despite favorable prices and improving foodservice demand, potato growers are likely to reduce acreage slightly in 2012.

Gary Lucier
Lewrene Glaser
Suzanne Thornsbury
Alberto Jerardo
USDA Economic Research Service