Fruit and Tree Nuts Outlook

Dan Commodity Report, Industry News Release, Tree, nut & vine crops

by Agnes Perez and Gustavo Ferreira, USDA Economic Research Service

Lower Supplies Boost Early-Summer Prices for Sweet Cherries and Melons

In late June, USDA’s National Agricultural Statistics Service (NASS) released its first forecast for the 2016 U.S. sweet cherry crop at 318,000 tons, down 6 percent from a year ago. Smaller crops in the two largest producing States—Washington and California— are mostly behind the expected production decline. Reduced supplies have helped boost early-season sweet cherry prices thus far.

Peach harvesting is underway in the top three producing States—California, South Carolina, and Georgia. Domestic shipments through mid-June are up 2 percent from the same time last year, reflecting substantial increases in South Carolina and Georgia. Price gains from reduced California supplies have been mitigated by the large supplies from the Southeast and lower prices for off-season imports this winter. Mid-May hailstorms likely dampened earlier crop prospects in California.

California’s 2016 dried plum (prune) crop is forecast at 45,000 tons, dried basis, down sharply from last year and the smallest on record, if realized. Potential increased carry-in inventories in 2016/17, partly due to sluggish exports in 2015/16, should help alleviate some of the supply impacts of the expected very small production this year.

The June NASS Crop Production report projected the total 2015/16 citrus crop at 8.52 million tons, down 6 percent from 2014/15. While Florida remains the main citrus producing State, its production levels are expected to decline 17 percent this year.

The 2016 U.S. melon season kicked off this spring with lighter supplies compared to last year, mostly on reduced watermelon supplies in most major producing States. Due to the tight early-season supplies, U.S. consumers are seeing some higher melon prices.

This year’s upcoming California almond harvest is forecast to bounce back to the 2.0- billion-pound mark due to increased bearing acreage and improved yields. Uncommitted inventories remain relatively high near the end of the 2015/16 season. Hence, a potential increase in carryin inventories going into 2016/17 and the forecast larger production will likely keep downward pressure on almond grower prices. Meanwhile, while the 2015/16 California pistachio season started out with record-high carryover stocks, the steep drop in production last year has limited the ability of the industry to meet market demand.

Read the full Fruit and Tree Nuts Outlook report.