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Horticulture Outlook-Fall 2005

Horticulture Outlook-Fall 2005. Agricultural Economics. Fruits and Vegetables: Kentucky Gross Farm Sales, 2005. 94 community farmers markets: $7-8 million, 1500+ vendors 67 Farm Bureau CRMs @ $120,000: Another $8 million

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Horticulture Outlook-Fall 2005

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  1. Horticulture Outlook-Fall 2005 Agricultural Economics

  2. Fruits and Vegetables: Kentucky Gross Farm Sales, 2005 • 94 community farmers markets: $7-8 million, 1500+ vendors • 67 Farm Bureau CRMs @ $120,000: Another $8 million • Niche processed products (berries, grapes, HB 391), wholesale not through co-ops (grower-shipper), other on-farm and direct sales (restaurants, CSA, U-pick, etc.): Another $7-11 million • 4 produce auctions • $2 million produce sales • 4 Co-ops • $3-3.5 million Source: NASS Ag Census, UK Estimates Agricultural Economics

  3. Percent Change in U.S. Per Capita Use of Selected Fresh Produce Crops, 1994-2004 *Others include: eggplant, garlic, squash, spinach, okra, pumpkins, greens, and some specialties Source: July 2005 USDA/ERS Vegetables and Melons Situation and Outlook Yearbook (Table 1) Agricultural Economics

  4. 2005 Per Capita Use Projections • ERS forecasts minimal use gains in Ky. mainline vegetable crops • Diversifying product lines is critical for commercial produce sales growth Source: USDA/ERS Preliminary Use Estimates for 2004-05 Agricultural Economics

  5. Fresh Potato Deal • Lowest acreage since 1866 • Acreage reduction due to bid-buydown program, mainly in ID & ND, by United Potato Growers of America • Less supply resulted in higher prices • Fresh potato use off 6% since 1994; all potato use is only down 2%--less “low-carb effect” than expected • Opportunities for Kentucky growers could arise from higher transportation costs; possible contract availability for chipping potatoes (low margin) • Sweetpotatoes also present local wholesale, direct marketing opportunity through fall & winter months Source: Aug. 2005 USDA/ERS Vegetables and Melons Situation and Outlook Agricultural Economics

  6. Kentucky Produce Marketing Channels Percent selling at least 10% of their produce into given market channel Source: Ernst & Woods, 2001-05 KY Produce Marketing Practices Surveys Direct markets include on-farm and off-farm retail, direct to restaurant/grocer, and CSA

  7. U.S. Sweet Corn Shipping Point Prices 1995-2004 and 2005 Source: USDA/ERS, UK Estimates

  8. U.S. Tomato f.o.b. Shipping Point Prices Source: USDA/ERS, UK Estimates

  9. Ky. Peppers Compare Source: USDA/AMS, UK analysis. Terminal markets are spot markets, usually reflecting at least two markups over producer prices.

  10. Cantaloupe Auction Prices Source: UK New Crop Opportunities Center

  11. National Fall Broccoli Outlook • USDA ERS and NASS projected third-quarter broccoli prices declining 17% in 2005 • Lower than expected actual September prices indicate actual decline closer to 20% • 2005 California fall broccoli acreage is up 4% (totaling 31,600 acres) • USDA projects broccoli prices 15% lower than 2004 for 4th quarter • Transportation costs could play in favor of Eastern shippers Source: ERS-Vegetables and Melons Outlook (August 18, 2005); NASS-Agricultural Prices (Broccoli f.o.b. prices $/cwt.) Agricultural Economics

  12. Broccoli Shipping Point Prices Source: ERS-Vegetables and Melons Outlook (Oct. 20, 2005); NASS-Agricultural Prices (Broccoli f.o.b. prices $/cwt.) Agricultural Economics

  13. 2005 KY Fruit Season • 400+ commercial berry acres • Good small fruit quality • Additional blueberry and grape acreage added to full-bearing potential • Dry year affected tree fruit size, quality • Continued interest in value-added fruit products

  14. 2005 KY Fruit Econ Research • SARE sponsored on-farm research documents 2-yr. establishment costs (preplant, planting, season after planting) for blueberries on marginal land • pH 6.0 = $2230 (conventional) • pH 5.0 = $2630 (sust./organic) • Properly managed berry plantings are one of most profitable produce crops • Update of winegrape establishment costs using current planting population recommendations • Suggests improved economic viability for wholesale production of winegrapes for sale to area wineries • Regional prices persist at profitable levels; winegrape price survey will be updated to reflect this season’s

  15. Approximate Grape Prices Paid By Regional Wineries, 2003$/ton 110 wineries surveyed Estimated KY Breakeven Price Per Ton: $650-1050 Source: Ernst & Woods, Regional Wine Grape Price Survey, www.uky.edu/Ag/NewCrops

  16. 2005 KY Produce Markets Summary • Record sales at 94 farmers’ markets • Certified Roadside Markets increase • Auction produce sales are projected to increase from about $1.5 to $2 million • Shipping point prices in Ky’s season stronger than average across entire fresh vegetable sector • Independent grower-shippers continue to capture additional marketing opportunities • Co-op sales volume decreases • On-farm and roadside markets continue to capitalize on consumer interest in locally produced food—another strong fall festival season

  17. Produce Buyers’ Survey • Surveyed 52 regional produce buyers • Asked to identify consumer and industry trends • Identified Ky. crops with high expansion potential • Grape tomatoes • Packaged salads and other fresh cut items • Seedless watermelons • Bell peppers (red, orange, yellow) • Strawberries • Cantaloupe • Ethnic oriented products • Watermelon • Romaine Lettuce and other salad greens • Vine Ripe Tomatoes • Chile/Hot/Specialty Peppers Source: Woods & Ernst, 2004 Agricultural Economics

  18. Emerging Ky. Produce Markets • Ethnic markets: Hispanic, Asian, E. European • Value-added products from produce (HB 391, small-scale branding/processing) • Farm branding at state parks, other restaurants • Requires producers to develop relationship with chef and deliver consistently high quality products • Many new producers participate in State Parks program in 2005—good “starting” market of $200,000 statewide; door opened for direct meat sales • New produce auctions: Lincoln County, Bath County (Aug 2004), Mason County (2005) • Success will demand grower base and larger volume wholesale buyers • Wholesale deals with chain stores, restaurants, groceries, farmers’ market vendors

  19. Green Industry • Nationwide, total grower receipts for bedding plants have doubled in last decade • ERS estimates KY nursery/greenhouse growers to reach $77 million cash receipts in 2004 (record receipts) • Larger greenhouse expansion, nursery production lead increase Source: USDA/ERS Floriculture and Nursery Crops Situation and Outlook Yearbook, June 2005 & Sep. 2005 Agricultural Economics

  20. Value of KY Wholesale Greenhouse & Nursery Sales, 1993-2003 Source: USDA/ERS Floriculture and Nursery Crops Situation and Outlook Yearbook, May 2004. Includes Christmas trees, vegetable plants.. Agricultural Economics

  21. Nursery Products Buyers Survey • Regional nursery products survey reported increased quantities demanded of maple, magnolia, and oak, as well as larger container sizes for all trees • Expected increases in larger B&B (1 ½-3”) and 10-15 gallon containers • Product quality is cited as most important characteristic of purchase Source: 2004 Nursery Products Buyers Survey. Andrea Basham, Tim Woods, Matt Ernst UK AEC-EXT 2005-03 Agricultural Economics

  22. Nursery Products Buyers Survey Source: 2004 Nursery Products Buyers Survey. Andrea Basham, Tim Woods, Matt Ernst UK AEC-EXT 2005-03 Agricultural Economics

  23. Nursery Products Buyers Survey Source: 2004 Nursery Products Buyers Survey. Andrea Basham, Tim Woods, Matt Ernst UK AEC-EXT 2005-03 Agricultural Economics

  24. Developing New Crop Opportunities Upcoming Training Sessions 9:00 am – 3:30 pm • November 10 — Laurel County • November 11 — Franklin County • December 13 — Princeton Training focuses on marketing and how to help the client match with an enterprise that suits their strengths; real-life case studies; new marketing education materials and resources Agricultural Economics

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