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National Food and Agricultural Policy Project Arizona State University AFBF 88th Annual Convention January 6, 2007 NFAPP Mission NFAPP is a charged with the responsibility of providing timely policy and market analysis on the fruit and vegetable sector to Congress and the industry.
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National Food and Agricultural Policy Project Arizona State University AFBF 88th Annual Convention January 6, 2007
NFAPP Mission NFAPP is a charged with the responsibility of providing timely policy and market analysis on the fruit and vegetable sector to Congress and the industry. http://nfapp.poly.asu.edu/
NFAPP Activities • 10-year Baselines • Policy Analyses • Congressional Research Requests • Review Sessions • Policy Papers • Quarterly Newsletter
Almonds Apples Cherries Grapes Oranges Peaches Strawberries Fruit and Nut Models
Vegetable and Melon Models • Lettuce • Mushrooms • Onions • Potatoes • Sweet Corn - Proc. • Tomatoes (Fresh, Proc.) • Watermelon • Bell Pepper • Broccoli • Cantaloupe • Carrots • Cauliflower • Celery • Honey Dew
Fruit Value Forecast • U. S total Value for Fruits and Nuts is expected to grow 17% from 2006 to 2015 to reach 17.8 billion dollars
Vegetable Value Forecast • U.S. Vegetable cash receipts are expected to follow a similar growth as that of fruits (17%) to reach 22.5 billion dollars
Production • While production for major Vegetables has grown at of 52 % per year Fruits has been stable with a percent growth of 4 % per year.
Consumption • Historical Trends Show that Consumption for vegetables has grown 21% while fruits have been growing at a rate of 9%
Commodity Import Share Lettuce1-1.5% Fresh White Onions11-12% Potatoes 6-8% Tomatoes 35-40% Table Grapes 52-58% Apples Fresh 6-9%, Juice 63-80% Oranges Fresh 3-7%, Juice 13-21% Fresh Strawberries 5-8% Range: Fruits 24%, Vegetables 18%
Farm Bill IssuesCurrent Policy Analysis • Flex Acre Provisions • Market Expansion • School lunch program (fruit and vegetable)
Flex Acre Restriction • Commodity program participants allowed to produce any crop except, fruits, vegetables, and wild rice • Traditionally, an argument supported by concerns over equity • Restriction called into question under Brazil’s challenge of the U.S. cotton program • Additional complexity – 2002 Farm Bill brought soybeans and peanuts under the DCP program
Flex Acre - Complexities • Fruit and vegetable crops are commercially produced in every state • Program crops are produced in every state • Program crop producers are enrolled in commodity programs in nearly every state • Traditionally returns in many fruit and vegetable crops have exceeded returns on program crop commodities, though typically more variable
Potential Entry into Fruits & Vegetables • Competing Areas • 219 million acres program crops (2002) • 267 million acres enrolled acres • 10 million acres – all produce • Where and what • Processing vegetables – not likely • Tree fruit, berry (cane-type) – not likely • Fresh vegetables, melons – more likely • Areas with existing production
Select Region • Program Crop Acreage: 4.5 Million Acres • Cotton, winter wheat, sorghum, corn, peanuts • Produce Crop Acreage: 695,210 Acres • 50 produce crops • Lettuce, cantaloupes, tomatoes, carrots, watermelon, sweet corn, potatoes, broccoli, onions, cabbage, cucumbers
Farm Bill Issues Fresh Fruit and Vegetable Snack Program Expand Authorization Health Impacts Long Term Direction
Fresh Fruit and Vegetable Snack Program • 14 States (350 schools) • 4 Indian Communities (SD, AZ, NM, 25 schools) • Permanent funding of $ 9 million/year • FY 07 Expand to CA, AR, GA • Full implementation of FVSP, NFAPP estimates an increase of $1.1 billion farm income
Farm Bill Issues Specialty Crop Competitiveness Market Access Non Tariff Barrier Reduction Phytosanitary
Specialty Crop Competitiveness • Stagnant export growth –lack of access to foreign markets • Subsidized foreign competition • Rapidly increasing production costs • Increasing import competition from growers in nations with minimal regulations • Labor uncertainty