USDA : Agricultural outlook, full report, 08.22.02
USDA U.S. Department of Agriculture - August 23, 2002
AGRICULTURAL OUTLOOK August 22, 2002
September 2002, ERS-AO-294
Approved by the World Agricultural Outlook Board -----------
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AGRICULTURAL OUTLOOK is published ten times a year by the
Economic Research Service, U.S. Department of Agriculture,
Washington, DC 20036-5831. Please note that this release
contains only the text of AGRICULTURAL OUTLOOK -tables and
graphics are not included.
CONTENTS
BRIEFS
Livestock, Dairy, & Poultry: Pork Production to Reach Record
Levels in 2002 & 2003
Specialty Crops: Demand Strong for Tree Nuts
Specialty crops: U.S. Sugar Policy Under the 2002 Farm Act
COMMODITY SPOTLIGHT
Rising Prices & Strong Competition Confront U.S. Soybean
Exports
Cabbage Heads Higher
WORLD AGRICULTURE & TRADE
The Ongoing Reform of Land Tenure Policies in China
Trade Among Unequal Partners: Changing EU Trade Arrangements
with
Developing Countries
RESEARCH & TECHNOLOGY
Genetically Engineered Crops: U.S. Adoption & Impacts
Does Off-Farm Work Hinder "Smart" Farming?
IN THIS ISSUE
Pork Production Up, Farrowings Down
U.S. hog producers are expected to respond to higher feed costs
by reducing the number of sows farrowing in 2003. Pigs per
litter are expected to increase slightly, as less productive
sows are eliminated from the breeding herd. USDA forecasts 2002
pork production at 19.8 billion pounds, and 2003 production at
19.85 billion pounds. Both quantities exceed all previous U.S.
production levels. Contact: Mildred Haley (202) 694-5176;
mhaley@ers.usda.gov
Tree Nut Crops: Production Up, Prices Down
Strong demand for tree nuts, especially in export markets, has
been driving up shipments this season. Supply is also strong,
the result of large crops and large beginning stocks, and the
net effect is lower grower prices. Overall revenue is expected
to be high despite expected lower prices, because of the large
volume of tree nut crops being moved. Contact: Susan L. Pollack
(202) 694-5251; pollack@ers.usda.gov
U.S. Sugar Policy Under the 2002 Farm Act
by: Stephen Haley and Nydia Suarez
The 2002 Farm Act reauthorized the sugar price support loan
program, and introduced measures to make the program work more
effectively for producers. A key change in the 2002 Act
requires that USDA operate the sugar loan program at no cost to
the Federal government. To accomplish this, the Act includes
measures to discourage forfeiture of sugar to the government by
processors who offered it as collateral for nonrecourse loans
under the sugar program. Among the Act's cost-reducing
provisions is the authority for USDA to impose flexible
marketing allotments for sugar (supply control). Contact:
Stephen Haley (202) 694-5247;
shaley@ers.usda.gov
Rising Prices & Strong Competition Confront U.S. Soybean
Exports
The U.S. soybean crop for 2002 is forecast at 2,628 million
bushels, well below last year's record 2,891 million. The
forecast reflects both a decline in plantings and a slip in
expected yield. Crop rotations, improved net returns for corn
(with lower costs for nitrogen fertilizer), and economic and
weather conditions in western states encouraged greater
planting of corn and the lowest U.S. soybean area since 1998.
Soybean yields were curbed by summer drought and high
temperatures, and by an acreage shift from higher yielding to
lower yielding states. Lower soybean supplies will promote a
hard retreat in U.S. soybean exports. Higher U.S. prices will
erode the ability to compete with likely aggressive export
campaigns by Brazil and Argentina. Contact: Mark Ash (202) 694-
5289; mash@ers.usda.gov
Cabbage Heads Higher
The French word for cabbage is incorporated into a term of
endearment: "mon petit chou" ("my little cabbage"). This
vegetable has recently become a little more endearing to
Americans, a turnaround from a steady decline in use between
the 1920s and the 1990s as Americans looked elsewhere for
variety and convenience in their food. In the past decade,
fresh-cut products, new recipes, and a growing body of
nutritional research have lent new support to cabbage demand.
Total cabbage consumption rose to 10.3 pounds per person in the
early 2000s, but is still 57 percent below the 1920s. Contact:
Gary Lucier (202) 694-5253; glucier@ers.usda.gov
The Ongoing Reform of Land Tenure Policies in China
The combined forces of economic transition, rapid economic
growth, and increased integration into the world economy are
propelling substantial changes in rural China. How farmers
respond to changing economic opportunities and challenges
depends critically on the choices they are able to make about
use of land and other resources-choices that depend in turn on
land tenure patterns. With 9 percent of the world's arable land
and 40 percent of the world's farmers, China's land is scarce
relative to its labor. Control over land in China reflects a
complex and changing distribution of authority among the
national government, local governments, and households, with
potential implications for efficiency, equity, and
environmental quality. Contact: Bryan Lohmar (202) 694-5226;
blohmar@ers.usda.gov
Changing EU Trade Arrangements with Developing Countries
The European Union (EU), more than other members of the World
Trade Organization (WTO), has used exceptions to international
trading rules to provide nonreciprocal trading preferences to
selected developing countries. Some of these arrangements have
been challenged under WTO procedures as discriminatory and not
in compliance with trade rules. To achieve compatibility, the
EU proposes to convert the arrangements into reciprocal free
trade areas, which for developing countries could result in new
trade competition and economic challenges, without clear
advantages. The EU, on the other hand, would gain strong
advantages for its agricultural and other exports to some
developing countries at the expense of exports from the U.S.
and other countries. Many elements of the EU's current and
proposed free trade area arrangements remain controversial and
untested in the WTO. Contact: Gene Hasha (202) 694-5168;
ghasha@ers.usda.gov
Genetically Engineered Crops: U.S. Adoption & Impacts
Since the introduction of genetically engineered (GE) crops in
1996, U.S. farmers have rapidly adopted some varieties,
notwithstanding conflicting claims about economic and
environmental impacts and consumer acceptance. Soybeans and
cotton with herbicide-tolerant traits have been the most
widely and rapidly adopted GE crops in the U.S., followed by
insect-resistant cotton and corn. Analyses by USDA's Economic
Research Service and others indicate economic benefits to many
farmers adopting first-generation GE crops. Not all benefits of
GE crop adoption are reflected in standard measures of net
returns. Contact: Jorge Fernandez-Cornejo (202) 694-5537;
jorgef@ers.usda.gov
Does Off-Farm Work Hinder "Smart" Farming?
As off-farm income takes on greater importance to farm
households, less time is available for farm management. Smart
farming (e.g., soil testing, integrated pest management, and
precision farming) typically substitutes management for
capital, and management is time-intensive. The value of
management time and effort does not typically enter into
calculations of economic returns to alternative production
technologies or farming systems. The result could be misleading
in understanding the benefits of technology adoption,
particularly if farm households, like most of their nonfarm
counterparts, are willing to forfeit some financial return from
farming to gain convenience. Contact: Katherine R. Smith (202)
694-5500; ksmith@ers.usda.gov
BRIEFS
Livestock, Dairy, & Poultry
Pork Production Up, Farrowings Down
U.S. hog producers are expected to respond to higher feed costs
by reducing the number of sows that farrow in 2003. Sow
farrowings in 2003 are expected to decline about 1 percent from
2002. Pigs per litter are expected to increase slightly, as
less productive sows are eliminated from the breeding herd. The
pig crop is expected to be down about 1 percent next year, with
slaughter to increase just slightly. Average dressed weights
will be lower, with the higher cost of gain.
USDA produces a Quarterly Hogs and Pigs report. This
information, combined with pork production figures for the
first half of 2002, indicates record quantities of U.S. pork
products, both this year and in 2003. USDA forecasts 2002 pork
production at 19.8 billion pounds and 2003 production at 19.85
billion pounds. Both quantities exceed all previous U.S.
production levels.
Total red meat and poultry production is expected to be about
85.3 billion pounds this year, but may decline slightly in
2003. This year's large meat production, combined with an 8-9
percent decline in exports and a 3-4 percent increase in
imports, will create an abundant supply of meat for domestic
consumption.
Hog Prices to Average in the Mid-$30s
This Year, & in 2003
Prices of 51-52-percent lean hogs (liveweight equivalent) ended
the second quarter on a high note, averaging $35 per
hundredweight (cwt). Seasonally lower slaughter in June and
higher demand for pork products, particularly since mid-June,
have increased hog prices. With demand expected to remain
comparatively strong through the summer months, prices are
expected to average $35-$37 per cwt in the third quarter.
Because of the seasonally heavy slaughter, prices are expected
to decline into the high-$20s per cwt in the fourth quarter of
2002, while first-quarter 2003 prices are expected to average
around $34 per cwt. Second-quarter 2003 hog prices are expected
to rise again, and average around $37 per cwt.
Retail pork prices are expected to average about $2.68 a pound
this year and decline slightly in 2003. The difference between
prices received by the producer, the wholesaler, and the
retailer indicates the total price spread. The spread has
averaged about $1.86 a pound since 1999, but in the
second quarter of 2002 the total spread was $2.06. Over the
last 3 years, the wholesale-retail price spread has accounted
for 80 percent of the total spread. So far in 2002, the
wholesale-retail price spread accounts for about 82 percent of
the total. The total price spread is expected to narrow back
toward the 3-year average next year, pointing to lower retail
prices.
The U.S. is expected to export almost 6 percent less pork in
2002 than in 2001. Lower demand for U.S. pork products can be
attributed generally to muted consumer demand, resulting from
slower than anticipated economic growth in foreign markets.
Specifically, there are several foreign markets where weakness
has either already been noted or is likely to become apparent
in the near future.
Japan Imposes
Safeguard Again
Japan--the largest foreign market for U.S pork products--
imported 4 percent less pork in the first 5 months of 2002 than
for the same period last year. Moreover, the Safeguard was
triggered at the end of June--after data for the first quarter
of Japan's April-March fiscal year became available. The
Safeguard is a World Trade Organization-sanctioned restriction
that protects domestic markets from surges in imported
products. The imposition of the Safeguard raises the minimum
price at which foreign pork can be imported into Japan by 25
percent, making imported pork products less attractive to
Japanese consumers than domestically produced pork products.
The higher minimum import price resulting from the Safeguard
was imposed on August 1, and will remain in place until March
31, 2003.
While Safeguard imposition typically lowers demand for all
imported pork, frozen products tend to decline the most. Since
fresh pork tends to have larger margins and limited shelf life,
demand for imported fresh pork has not declined as dramatically
as has demand for frozen pork under past Safeguard scenarios.
And, since fresh products comprise more than half of U.S.
exports to Japan, the Safeguard has impacted U.S. pork exports
to a lesser degree than to a country such as Denmark--whose
exports to Japan are nearly all frozen.
Compared with demand patterns under past Safeguard scenarios,
Japanese demand for imported pork appears to have changed under
the Safeguard that was imposed from August 2001-March 2002.
Total August 2001-March 2002 pork imports increased compared
with the same period in 2000-2001, when no Safeguard was in
place. Under the most recent Safeguard, Japan imported more
pork products (fresh and frozen), despite higher prices.
Consumer fears of bovine spongiform encephalopathy (BSE) was
one likely factor in continuation of Japanese consumer demand
for higher priced imported pork under the August 2001-March
2002 Safeguard. Intense competition for market share among
international exporting companies is another likely factor.
Prospects for Other
Countries Mixed
Export totals for the first 5 months of 2002 to Mexico and
Canada--the second and third largest foreign markets for U.S.
pork--show a mixed picture. Exports to Mexico declined
slightly, likely resulting from the relatively high U.S. dollar
exchange rate, and continued economic uncertainty in Mexico.
Canada has imported 7 percent more U.S. pork so far this year,
to meet demand for selected pork cuts that the domestic
Canadian pork industry is unable to meet, or to fill
"shortages" created by Canada's aggressive pork export
industry.
Russia's declining demand for U.S. pork products continued
through May. So far this year, U.S. exports to Russia are 62
percent lower than for the same period last year. U.S. pork
products continue to have difficulty competing with lower
priced pork products from Brazil and China.
For South Korea, 2002 was to have been the year of re-entry
into international pork markets--Japan in particular--after
foot-and-mouth disease (FMD) infected the Korean herd in the
spring of 2000. In anticipation of resuming the lucrative loin
trade to Japan, the Korean pork industry accumulated
significant stocks of pork this year. U.S. exports to Korea had
increased 75 percent over the same period last year. Korean
traders imported lower priced U.S. cuts in order to accumulate
stocks of Korean products for export to Japan. But, the
reappearance of FMD in May has postponed Korean loin exports to
Japan. Large Korean pork stocks will likely slow Korean demand
for U.S. pork products for the remainder of 2002.
U.S. Pork Imports
Increase
So far through May 2002, the U.S. has imported 17 percent more
pork than over the same period last year. About 80 percent of
U.S. imports are from Canada, representing the continuing
integration of the U.S. and Canadian pork and food service
industries. Denmark accounts for about 13 percent of U.S.
imports. The American appetite for pork ribs is the primary
factor driving Danish exports to the U.S.
Despite concerns about low fourth-quarter 2002 prices, and
uncertainty surrounding requirements for Country of Origin
Labeling contained in the 2002 Farm Act, the U.S. continued to
import large numbers of live Canadian hogs. In the first 5
months of 2002, imports were 18 percent higher than for the
same period last year. So far this year, nearly 64 percent of
live Canadian imports have been feeder pigs destined largely
for finishing in the Corn Belt States. The U.S. is expected to
import 6.2 million hogs from Canada this year, 17 percent more
than in 2001.
Mildred Haley (202) 694-5176 mhaley@ers.usda.gov
Leland W. Southard (202) 694-5817 southard@ers.usda.gov
For the latest data and analysis on hogs and pigs, see the hogs
briefing room on the ERS website at
www.ers.usda.gov/briefing/hogs/
BRIEFS
Specialty Crops
Demand Strong for Tree Nuts
Strong demand, especially from export markets, has been driving
up tree nut shipments this season. Supply is also strong this
season because of large crops and large beginning stocks. The
net effect is lower grower prices. Overall revenue is expected
to be high, despite expected lower prices, because of the large
volume of tree nut crops being moved.
High almond shipments provide almond growers with good returns.
Almonds dominate nut production in the U.S. The near-record
crop in 2001/02 has provided ample supply for marketing. While
lower than the previous season, beginning stocks were still
very large, pushing total available supplies above the record
crop in 1999/2000.
Domestic demand has been very strong so far this year (August
through May), about 15 percent over last season, which could
help drive domestic consumption to its highest level yet.
Americans consume more almonds than any other tree nut,
including those used in candy and baked goods, yet the average
person consumes less than a pound a year. Fortunately for the
industry, other regions of the world have a stronger preference
for almonds. Europeans, the major customers U.S. almonds, use
much of their nut imports to make paste.
Strong demand for almonds in Europe has helped fuel a rapidly
expanding U.S. almond industry. Virtually the entire U.S.
almond crop comes from
California, which has an ideal environment for the trees.
Foreign nut demand has driven this expansion, and bearing acres
reached 525,000 in 2001. Acreage is likely to increase slightly
for the 2002/03 crop, although the rate of growth is slowing
after several years of continuous expansion. In July, USDA's
National Agricultural Statistics Service (NASS) forecast the
new almond crop at a record 980 million pounds. As the 2001/02
season winds down, dwindled supplies put the industry in a good
position to handle next year's expected record crop. The
industry expects grower prices to improve despite the forecast,
and the coming season, which got underway in early August, will
likely see stable or even increasing prices as strong demand is
expected to continue.
No big surprises expected for walnut crop. Almost all of the
commercial walnut industry is concentrated in California's San
Joaquin Valley. The good weather that boosted California's
almond crop was also a plus to the walnut crop. Because this
season was a record crop for walnuts, the trees will likely
produce a smaller crop in 2002/03. Acreage has remained
relatively stable over the past few years, and no major changes
are expected in the near future.
2001/02 walnut crop movement was about 4 percent above the
previous year through June (on an inshell equivalent basis).
Domestic movement, which accounted for 58 percent of total
shipments through May, was 3 percent higher than last season.
Exports have been stronger so far this season, increasing 6
percent over 2000/01. Most walnuts are exported shelled, and
are destined primarily for Japan, Germany, Israel, and Spain.
Walnut prices for the 2001/02 season averaged $1,120 per ton.
The expected smaller crop this coming harvest should increase
grower prices. As a result, total revenue should continue
higher as it has the past 3 years.
Pistachio shipments strong. Finishing out the California tree
nuts, the 2002/03 pistachio crop is expected to be larger than
the present crop in the market, following the general alternate-
year-bearing trend of tree nuts. Pistachio production is on the
opposite cycle of the other tree nuts, and 2001 was the "off
cycle" year for the crop. The 2001 crop was 34 percent below
last year's record crop, but still 31 percent above the similar
low cycle 2 years ago. A forecast of the new season crop will
be available at the end of August.
Pistachio nut shipments were higher for September 2001-May 2002
than during the same period last year. Despite the smaller 2001
crop, exports were higher. Shipments of inshell pistachios
increased 41 percent, with large increases in quantity going to
the European Union. The major markets are Germany, France, Hong
Kong, and Canada. Large beginning stocks for this year's crop
likely contributed to the larger shipments. Strong demand has
driven down inventory below last year's level, with stocks of
loose kernel and artificially opened pistachios nearly
depleted. As a result, growers are in good position to demand
higher prices once the new crop harvest begins. Low inventory
should help moderate price-depressing effects of a larger crop.
Pecan markets hurt by slowed economy. The 2001/02 pecan crop
suffered from the domestic economic slowdown this year. Unlike
many of the other tree nuts, much of the pecan crop is not
stored before marketing. Rather, inventory is held by
processors who purchase the pecans to make cookies, ice cream,
pies, and similar goods. As a result, much of the crop is sold
shortly after harvest. With the pecan harvest beginning in
September, the 2001/02 crop was hurt by the economic downturn
that occurred after September 11. Growers were receiving good
returns at the beginning of harvest, but demand fell once the
economic effects of the tragedy reached the food industries.
Because close to 90 percent of the crop is sold to the baking,
candy, and ice cream industries, and nearly all the nuts are in
the market at the same time, prices fell. As a result, the per
pound price dropped to 68.7 cents, the lowest in 5 years. The
value of the crop in 2001 fell 9 percent from the previous
year.
In response to declining revenues, pecan farmers reduced their
inputs to cut costs. The industry is expecting a much smaller
crop this year because of the reduced input use, drought
conditions through most of the pecan-growing States, and the
alternate-bearing cycle of the trees. A smaller crop generally
would be good news to growers, because prices would be expected
to rise. However, pecan inventories held by processors are
reported to be high as the season is ending, and the new
harvest is just a few months away. As a result, processors will
be unwilling to pay high prices for the new crop. Those pecans
going to fresh market, such as the gift industry, should be
able to get good prices.
Fewer hazelnuts expected this season. Following the largest
crop on record, the incoming hazelnut crop is expected to
return to normal levels for an off year. Producing such a large
crop last year placed a heavy burden on the trees and could
push this year's production down to around 20,000 tons,
according to industry sources. This significantly lower crop
should boost grower prices, which fell to $700 a ton in 2001,
the lowest level since 1993. However, low prices helped move
the crop and bring total revenue above last year's level.
Hazelnut shipments have been strong, leaving very little
inventory at the end of the season. While domestic shipments
were above a year ago, they were 18 percent below 2 years ago.
Fortunately for the industry, export demand has been growing.
At the end of April, over 24,000 tons of hazelnuts had been
exported compared with only about 3,000 tons sold domestically.
The major international markets for U.S. hazelnuts are Hong
Kong, China, and Germany. Almost all of the shipments are
inshell nuts. Kernels account for a very small proportion of
sales.
Susan L. Pollack (202) 694-5251 pollack@ers.usda.gov
For more info, visit the ERS fruit and tree nuts briefing room
at www.ers.usda.gov/Briefing/FruitAndTreeNuts/
BRIEFS
Specialty Crops
U.S. Sugar Policy Under the 2002 Farm Act
The 2002 Farm Act--the Farm Security and Rural Investment Act
of 2002--reauthorized the sugar price support loan program and
introduced measures to make the program work more effectively
for producers and processors, and to lessen the cost of the
program to the U.S. government.
The Sugar Loan
Program
The 2002 Farm Act reauthorized the U.S. Department of
Agriculture (USDA) to make loans available to processors of
domestically grown sugarcane at the rate of 18 cents per pound
and to processors of domestically grown sugar beets at 22.9
cents per pound for refined sugar. As before, loans are made
for a maximum term of 9 months and must be liquidated along
with interest charges by the end of the fiscal year. Processors
are required to provide payments to producers in proportion to
the amount of the loan value accounted for by the sugar beets
and sugarcane the producers deliver. USDA retains the authority
to establish minimum producer payment amounts.
Other sugar loan provisions in the 2002 Act include the
following:
* Sugar loans must be nonrecourse, meaning that when the loan
matures, the USDA must accept sugar pledged as collateral as
payment in full in lieu of cash repayment of the loan, at the
discretion of the processor.
* A new provision allows processors to obtain loans for "in-
process" sugar
and syrups at 80 percent of the loan rate. "In-process" sugar
and syrups must be converted into raw cane or refined beet
sugar at no cost to the Commodity Credit Corporation (CCC)
before being eligible for forfeiture.
* The Act eliminates penalties that, under prior legislation,
had been charged to processors who forfeited sugar to the CCC.
* The Act eliminates the requirement that sugar processors
notify USDA of their intention to forfeit sugar under loan.
Also eliminated are government assessments on sugar marketing
by processors.
Operation of the program at no cost to the government. A key
change in the 2002 Farm Act requires that USDA operate the U.S.
sugar loan program at no cost to the Federal Government, to the
maximum extent possible. Specifically, USDA must avoid
forfeiture of sugar to the CCC. To discourage loan forfeiture,
the sugar price at the time of loan repayment must be high
enough to cover the loan principal plus interest and marketing
expenses.
The 2002 Farm Act gives USDA authority to accept bids from
sugarcane and sugar beet processors to obtain raw cane sugar or
refined beet sugar in CCC inventory in exchange for reducing
production. This is one way to control expected excess (or
"price-depressing") supplies of sugar. The 2002 Farm Act
specifies that this authority is in addition to any authority
the CCC may have under other laws.
Marketing allotments. Another way to guarantee that the sugar
loan program operates at no cost to the Federal government is
the requirement in the 2002 Farm Act that USDA establish
flexible marketing allotments for sugar (supply control). The
overall quantity of sugar to be allotted for a crop year is
determined by subtracting the sum of 1.532 million short tons
raw value (STRV), plus carry-in stocks of sugar (including CCC
inventory), from USDA's estimate of sugar consumption and
reasonable carryover stocks at
the end of the crop year. USDA must adjust allotment quantities
to avoid forfeiture of sugar to the CCC.
The overall allotment quantity is divided between refined beet
sugar (at 54.35 percent of overall quantity) and raw cane sugar
(at 45.65 percent). For cane sugar, Hawaii and Puerto Rico are
jointly allotted 325,000 STRV. For the mainland cane sugar
producing states (Florida, Louisiana, and Texas), allocations
are assigned based on past marketings of sugar, the ability to
market sugar in the current year, and past processing levels.
Beet sugar processors are assigned allotments based on their
sugar production for the 1998-2000 crop years. The 2002 Farm
Act provides for a number of contingencies that could require
reassignment of allotments during the crop year.
USDA's authority to operate sugar marketing allotments is
suspended if import levels of sugar for human consumption, not
including Re-Export Program quantities, are estimated to exceed
1.532 million STRV (such that the overall allotment quantity
would have to be reduced). The marketing allotments would
remain suspended, until imports have been restricted,
eliminated, or otherwise reduced to or below the 1.532 million
STRV level.
Flexible marketing allotments are likely to provide more
effective price support throughout the marketing year. When
allotments are on, processors who have expanded marketings in
excess of the rate of growth in domestic sugar demand will have
to postpone the sale of some sugar, and either store it at
their own expense or sell it for uses other than domestic food
use. The cost of storing excess production is thus shifted from
the Government to the industry. (However, the 2002 Farm Act
requires that the CCC establish a sugar storage facility loan
program to assist processors who want to construct or upgrade
storage and handling facilities.)
Trade Measures
In addition to the sugar loan program, U.S. sugar policy is
implemented
through a tariff-rate quota (TRQ) system, which is continued
under the 2002 Farm Act. The TRQ is a two-tiered tariff for
which the tariff rate charged depends on the volume of imports.
A lower (in-quota) tariff is charged on imports within the
quota volume, and a higher (over-quota) tariff is charged on
imports in excess of the quota volume. Each year, the Secretary
of Agriculture announces the quantity of sugar that may be
imported at the in-quota rate. Any quantity above that level
would be imported at a higher tariff rate. The raw cane sugar
TRQ is allocated to 40 countries. The 2002 Farm Act specifies
that on June 1 of each year, the U.S. Trade Representative,
along with USDA, must calculate the used and unused portions of
the TRQ for each quota-holding country, and reallocate unused
quota to qualified quota holders.
The U.S. also operates the Refined Sugar and Sugar-Containing
Products Re-Export Programs to allow U.S. refiners to compete
in global refined and sugar-containing product markets. The
programs establish a license against which a company can import
sugar at world prices for refining and sale to replace sugar
that has been exported either as refined sugar or in sugar-
containing products. The 2002 Farm Act specifies that all
refined sugars derived from either sugar beets or sugarcane are
substitutable under these programs.
Stephen Haley (202) 694-5247 shaley@ers.usda.gov Nydia Suarez
(202) 694-5259 nrsuarez@ers.usda.gov
For additional research and information on sugar and
sweeteners, see the sugar and sweeteners briefing room on the
ERS website at: www.ers.usda.gov/briefing/sugar/
COMMODITY SPOTLIGHT
Rising Prices & Strong Competition Confront U.S. Soybean
Exports
The U.S. soybean crop for 2002 is forecast at 2,628 million
bushels, well below last year's record of 2,891 million
bushels. The smaller expected crop reflects both a drop in
plantings and a drop in expected yield. Crop rotations and
improved net returns for corn (because of lower costs for
nitrogen fertilizer) created market anticipations earlier this
year for much higher corn acreage and the lowest U.S. soybean
area since 1998.
While corn planting advanced well in the upper Midwest, delays
were acute in the Ohio River Valley. When the optimal planting
dates for corn had passed, farmers in Indiana and Ohio planted
more acres to soybeans than indicated by the March intentions,
because late planting carries a greater risk to corn yields
than to soybean yields. Fewer acres planted to cotton also
raised soybean area in Mississippi and Louisiana. However,
these additional soybean plantings were partially offset by
economic and weather conditions in states farther west,
encouraging farmers to expand their corn acreage at the expense
of soybeans. Overall, actual soybean plantings for the nation
dropped from 74.1 million acres in 2001 to 73 million acres
this year.
Throughout the summer, drought and high temperatures worsened
crop conditions in the heart of the soybean belt. Yields were
also curbed by an acreage shift between higher-yielding and
lower-yielding states. Average U.S. soybean yield this year is
forecast at 36.5 bushels per acre, down from 39.6 last year.
Soybean plantings in the high yield states of Illinois, Iowa,
Nebraska, and Minnesota are down by a combined 1 million acres,
while acreage increased in some states with below-average
yields (particularly North Dakota, Mississippi, and Louisiana).
U.S. Exports Forecast Lower
Despite interruptions in trade this year with China over its
regulation of biotech crop imports, the overall strength of
U.S. soybean export demand
endured through 2001/02. Soybean exports rose to a record 1,060
million bushels, which contributed to surprisingly slim
carryover stocks of 195 million bushels. For the upcoming
marketing year, the brunt of the supply shortfall will be borne
by a hard retreat in U.S. soybean exports. Higher prices will
erode the ability to keep up with a likely aggressive export
campaign by Brazil and Argentina. U.S. soybean exports are
forecast plunging to 820 million bushels in 2002/03, which
would be the lowest volume in 4 years.
Foreign oilseed production is projected to rise 2 percent in
2002/03 to 237.9 million metric tons (mmt), partly offsetting a
9-percent decline in U.S. output to 82 mmt. World oilseed
supplies should shrink as larger soybean harvests for Brazil
and Argentina in 2002/03 may only partly compensate for
reductions elsewhere. In a repeat of similar circumstances from
a year ago, Brazilian farmers are getting favorable returns on
their latest soybean harvest (as well as forward sales for the
next crop) and are likely to sharply expand plantings again in
2002/03. Argentina's continuing financial crisis is favoring
planting proportionately more oilseeds than wheat and feed
grains in 2002/03 because oilseeds can be grown with lower
input costs.
In addition, Brazil and Argentina together carried over about
3.5 mmt more soybean stocks into 2002/03 than the previous
year. Producers in both countries held back marketing of
soybeans as they anticipated even higher farm prices following
currency depreciations. That temporary deferment supported U.S.
exports in 2001/02, but should intensify the competition for
sales early in 2002/03. As tight supplies sparked a recovery in
China's soybean imports last summer, South American exporters,
with their large stock buildup, will compete strongly with U.S.
suppliers for that and other markets this fall.
Soybean demand by the European Union (EU), the world's largest
import market and U.S. buyer, will likely slow in 2002/03.
Larger European oilseed harvests this year should curtail EU
soybean meal consumption. A record-large EU wheat supply will
expand its use in livestock feeds. Wheat has higher protein
than corn, so feeding more wheat would also curb soybean meal
demand, as less is needed as a protein supplement in feeds.
This slowdown may occur in spite of a recent strengthening of
the euro to near parity with the dollar (which increases the
purchasing power of foreign importers). In addition, a recovery
of Canada's domestic soybean harvest from last year's drought
would cut its import needs from the U.S.
The anticipated decline in U.S. soybean supplies is seen paring
2002/03 ending domestic stocks to a scant 155 million bushels.
The 2002/03 forecast U.S. average farm price is $5.15-$6.05 per
bushel, compared with the 2001/02 average of $4.35. A much
higher market price and a lower national soybean loan rate
($5.00 per bushel) enacted in the Farm Security and Rural
Investment Act of 2002 may eliminate any marketing loan gains
this year, which were approximately $3.5 billion for the 2001
soybean crop.
Domestic soybean crushing is expected to decrease next season
to 1,680 million bushels. Weaker export prospects, particularly
for soybean meal, and higher soybean costs will temper
processing demand. Soybean meal exports are forecast at 6.75
million tons, down sharply from 7.65 million in the current
season.
Growth in domestic soybean meal consumption is likely to
moderate next year as well, because of a slow expansion of
livestock numbers. The U.S. feed outlook has dimmed because a
large accumulation of frozen meat stocks has pressured prices
for both hogs and poultry, the primary consumers of soybean
meal. Domestic disappearance of soybean meal for 2002/03 is
forecast up to 33.5 million tons from 33.2 million in 2001/02.
Yet, a comparatively stronger market for soybean oil should
produce surplus soybean meal supplies and limit any increase in
value. Soybean meal prices for 2002/03 are expected to average
$170-$200 per ton compared with the 2001/02 average of $166.50
per ton.
Demand Strong for Vegetable Oil
Disappointing foreign harvests of palm oil and oilseeds other
than soybeans are tightening the global market for vegetable
oil relative to the protein feed market. Even with a modest
increase in soybean oil output, large U.S. carryover stocks
will sustain steady demand through 2002/03. U.S. soybean oil
exports will be competitive with an expected robust pace of
South American shipments. So, in a year that portends to have a
brisk rate for foreign vegetable oil imports, U.S. soybean oil
exports may remain relatively high, edging up to a forecast
2,500 million pounds.
Domestic soybean oil consumption in 2002/03, like the previous
year, will be supported by negligible supply increases for
competing vegetable oils. USDA projects 2002/03 domestic
disappearance of soybean oil to rise 2 percent to 17,200
million pounds.
Increased oil use will not be limited to just the edible
applications; biodiesel consumption may also begin to expand.
In April, Minnesota passed a law mandating that all diesel fuel
sold in the state contain a 2-percent biodiesel blend by June
2005. When this law becomes fully implemented, analysts
estimate that Minnesota alone may require 120 million pounds of
soybean oil annually for biodiesel. Although other fats and
recycled oils can be substituted in biodiesel production,
initially soybean oil may be the primary material. Other states
and the federal government are considering similar legislation.
Increased soybean oil use in 2002/03 is expected to cut season-
ending oil stocks to 1,990 million pounds. Prices of soybean
oil in 2002/03 would strengthen within the forecast average of
18.5-21.5 cents per pound, compared with the 2001/02 average of
16 cents.
Macroeconomic Policies & Biotech Shape World Trade
On January 7, China announced new details of its import
policies for biotech products that were first issued in 2001.
Beginning March 20, 2002, every import shipment of biotech
products must have a safety certificate from the Chinese
Ministry of Agriculture before it can be sold. Requirements for
the certificate include proper product labeling and a statement
from the originating country's government indicating that the
shipment poses no harm to humans, animals, or the environment.
The labeling requirement applies to biotech oilseeds as well as
their processed derivatives such as soybean meal, soybean oil,
rapeseed meal, and rapeseed oil. Upon arrival, imports are
quarantined while inspections are conducted to verify the
presence of any genetically engineered material, diseases, and
impurities.
Shortly after the January announcement, exports of U.S.
soybeans surged as Chinese processors rushed to secure delivery
before March 20. Because of the complex and still unclear
administration of the new policies, China later agreed to ease
implementation of the regulations on biotech crop imports. On a
transitional basis through December 20, China is providing
interim safety certificates to importers within 30 days of
receipt of required documents. Soybean imports resumed in June
after many exporters had acquired the interim certificates, but
the earlier lapse in obtaining certificates closed the pipeline
of foreign shipments for April and May. The shutdown cut
China's 2001/02 imports of soybeans to 10.5 mmt from 13.3 mmt
the previous year and exhausted stocks held at ports and
processing mills.
Despite expectations of higher trade, China's imports of
soybean oil were also subdued this year. Both China and Taiwan
officially joined the World Trade Organization on December 11,
2001. China's accession agreement stipulated that its 2002
tariff-rate quota on soybean oil increase to
2.518 mmt and the within-quota tariff fall from 13 percent to 9
percent. China had originally announced it would issue its
vegetable oil import licenses by March 5, but administrative
delays prevented distribution until early April. Also, since
prices for palm oil imports were generally
cheaper, China's importers nearly filled the 2002 palm oil
tariff-rate quota (2.4 mmt) first. Consequently, soybean oil
imports increased minimally to just 375,000 tons.
Unlike 2001/02, China will not head into the new marketing year
with a large cushion of oilseed stocks. These stocks allowed
China to maintain consumption this year during the stoppage of
soybean imports, but stocks have now been reduced to mere
pipeline supplies that are used as fast as they can arrive.
Minimal increases in domestic crops of soybeans, peanuts, and
sunflowerseed are expected this fall, but will not likely ease
the tight oilseed supply situation next year.
The most likely sources for meeting China's mounting domestic
needs will be imports of soybeans, soybean oil, and palm oil.
China would be a potentially good market for imports of rapeseed
next season, but production shortfalls among the major foreign
suppliers will raise prices and curtail imports. Soybean imports
by China are projected to rise to 14 mmt in 2002/03 from 10.5
mmt in 2001/02. Domestic crushing will still provide most of the
protein meal required, but China's vegetable oil deficit could
double soybean oil imports to 0.8 mmt and modestly raise palm
oil purchases to a record 2.2 mmt in 2002/03.
While China generally favored palm oil imports last season,
India purchased a large volume of soybean oil because of a
comparatively lower import duty. India is expected to import a
record large 2 mmt of soybean oil in 2002/03 because poor
monsoon rains will substantially reduce its domestic oilseed
harvests. Another reason for expected strong gains in soybean
oil imports by both India and China is that thinning supplies of
palm oil are likely to slow exports by the major Southeast Asian
producers.
Robust soybean demand in the rest of the world helped take up
the slack left this year by China's import stoppage. However, in
2002/03, China should reclaim its role as the world's fastest
growing soybean market. EU oilseed harvests fell by 0.3 mmt in
2001, so a shortfall of vegetable oils increased the
profitability of soybean crushing last season. Domestic oilseed
harvests are better this year, so EU soybean imports in 2002/03
should moderate. In Japan, higher costs of importing rapeseed
and a ban on feeding meat and bone meal promoted consumption of
soybean meal, a factor expected to continue into 2002/03. A very
dry summer in Canada last year cut soybean production by more
than 40 percent and sharply raised imports of soybeans and
soybean meal. But, a recovery in this year's Canadian soybean
crop should limit import needs in 2002/03.
Argentine farmers in 2002 reaped a bumper soybean harvest, 1.7
mmt larger than last year's, in spite of the many weather and
financial obstacles. Even so, a standoff between suppliers and
the government curtailed exports to a modest increase in
2001/02.
Argentina's default in December 2001 on its large public debt
forced currency devaluation in January. The peso had been pegged
at a one-to-one rate to the U.S. dollar since 1991. But in
February, the currency was allowed to freely float and has
subsequently depreciated to around 3.6 pesos per dollar. By
itself, such a large devaluation should benefit agricultural
exports in the long run. However, oilseed exports temporarily
ceased because of disputes over the government's reluctance to
repay about $600 mill ion of value-added taxes owed to
agricultural exporters. With international grain companies
compelled to finance their own trade, tighter controls on the
dollar exchange slowed foreign sales. The government also
converted all current dollar-denominated debts in the country
(except farm debts) to pesos at a rate of one peso per dollar.
Most significantly, the government raised export taxes to 23.5
percent for oilseeds and 20 percent for oilseed products.
Argentina had imposed export taxes on agricultural pro ducts in
the 1980s, but mostly abandoned them by 1991, retaining only a
modest 3.5-percent tax on oilseeds.
Although the domestic soybean price in Argentina soared
following the
January devaluation, unpredictable policy shifts on export
taxes, value-added tax refunds, and farm debt squelched the
immediate incentives to export. In the current economic climate,
producers lack confidence in the banking system and see their
dollar-based soybeans as a hard asset with the best store of
value. Also, Argentine farmers held on to their crops to protest
high export taxes, fuel costs, and inequitable treatment of farm
debt. They waited to see whether the peso stabilized or if
rising U.S. prices continued. Trucker strikes further
complicated transportation of crops.
To encourage soybean deliveries, Argentine exporters offered
producers the opportunity to deliver sales immediately after
harvest and defer pricing (with no discounts for storage)
through August. Still there was only a modicum of farm sales and
Argentine exporters had little to sell abroad. Thus, the
government was unable to reap tax payments from agricultural
exporters, the leading source of tax revenue for the cash-
strapped treasury. The International Monetary Fund has yet to
restore lending to the country. Having few financial resources,
the Argentine government suspended the promised rebates of
delinquent value-added tax to exporters. This hurt the ability
of processors to expand output and to offer farmers better
prices for their crops.
At the same time, demand from Argentina's largest soybean
customer (China) had stalled. Thus, most of Argentina's
increased 2002/03 supplies will be stocks carried over from the
previous year. Argentine farmers have little cash to pay off
debts or buy new inputs, so when they start planting new crops
this October they should favor planting proportionately more
oilseeds than feed grains. If fewer inputs are applied, lowering
yield potential, the expansion in 2002/03 soybean output may
moderate.
Like Argentina, Brazilian soybean producers also had a record-
large 2001/02 crop that was sold piecemeal. Farmers locked in
relatively high prices last year on a portion of the crop with
forward sales and Brazil's soybean area surged 17 percent.
Brazilian soybean prices slumped earlier this year when the
currency strengthened against the dollar. But, farmers were
capitalized well enough to wait for better post-harvest returns,
which came by August after a substantial depreciation and a
spike in U.S. prices. Low soybean shipments by Argentina and the
resumption of import demand by China also subsequently
accelerated Brazilian sales. Fortunes should turn in favor of
South American soybean exports in 2002/03 as higher U.S. prices,
larger South American supplies, and favorable exchange rates cut
deeply into the U.S. market share for global exports.
Mark Ash (202) 694-5289 mash@ers.usda.gov
For more information see: ERS briefing room on soybeans,
www.ers.usda.gov/briefing/soybeans
COMMODITY SPOTLIGHT
Cabbage Heads Higher
It was the French who inspired the English word "cabbage,"
believed to be derived from caboche, a slang term meaning
"head." Head cabbage has been an important player in U.S.
produce circles for many years. Thomas Jefferson grew 22
varieties of cabbage at his Monticello estate, according to the
1987 volume Blue Corn and Square Tomatoes.
The French also used "mon petit chou" ("my little cabbage") as a
common term of endearment. In recent years, cabbage has recently
become a little more endearing to Americans, gaining 7 percent
in per capita use between 1990-92 and 2000-02. This is a
turnaround from a steady decline between the 1920s and the
1990s, as Americans looked elsewhere for more variety and
convenience in their food. In the past decade, fresh-cut
products, new recipes, and a growing body of nutritional
research have lent new support
to cabbage demand. While total cabbage consumption rose to 10.3
pounds per person in the early 2000s, it is still 57 percent
below the 1920s, when cabbage use averaged 22 pounds.
Cabbage has four distinct end uses:
* food manufacturing including deli-type coleslaw and frozen
eggrolls; * the traditional fresh market; * the sauerkraut
industry; and * the fresh-cut salad industry which uses cabbage
in salad mixes, shredded bagged cabbage, and as the main
ingredient in fresh-cut bagged coleslaw.
According to ERS estimates, processed deli-type coleslaw (40 to
45 percent of use) and fresh head cabbage (around 35 percent)
account for the majority of cabbage disposition. Other major
uses include sauerkraut (12 percent) and various fresh-cut
products (5 to 10 percent). Retail sales of fresh-cut bagged
coleslaw averaged about $70 million in 2000 and 2001--4 percent
of the $2 billion fresh-cut salad retail industry. A small
amount of cabbage is also dehydrated (dried, flakes, or powder)
for use as a flavoring agent in soups and as an ingredient in
other dehydrated foods.
Fresh-market cabbage consumption averaged a fairly steady 8.5
pounds in the 1970s, 1980s, and 1990s. However, the 1990s
witnessed increased use of red cabbage in fresh-cut salad mixes
and popularity of fresh-cut bagged coleslaw, which helped spur
consumption. Sauerkraut use appears to have stabilized at about
1.3 pounds per person over the past decade. Demand for
sauerkraut peaked shortly after World War II and trended
steadily lower before leveling off in the early 1990s.
The U.S. accounts for 4 percent of world cabbage production,
ranking sixth behind China (38 percent of world output), India,
Russia, South Korea, and Japan. U.S. cabbage production is
largely centered in the East and upper Midwest but spreads
across the 50 states, with 82,000 acres and 4,289 farms shipping
to the fresh and processing markets. U.S. head cabbage had an
average farm value of $319 million annually during 1999-2001,
with the fresh market accounting for 97 percent of crop value.
Cabbage Volume Peaks in March
The volume of fresh-market cabbage shipments peaks in March,
spurred by the traditional St. Patrick's Day fare of corned beef
and cabbage. About 14 percent of the domestic crop is marketed
in March, compared with 10 percent for February and December
(the next-highest months). The majority of these winter
shipments come from Texas, Florida, and New York. Volume is
lowest in July at 4 percent of annual shipments.
Depending on the variety and growing conditions, a mature head
of cabbage weighs from 1 to 5 pounds with some even larger,
especially when destined for processing. Most fresh-market
cabbage is hand harvested to minimize damage and maximize yield,
while most cabbage destined for processing is machine harvested
to keep costs down. Because cabbage plants do not mature
uniformly, fresh-market fields are frequently harvested several
times to maximize yield.
Shippers in states such as New York, Pennsylvania, Michigan, and
Wisconsin routinely place late-season cabbage in cold storage
for later marketing--even until the following summer in the case
of New York, the industry leader. If stored under proper
conditions (controlled atmosphere facilities) late-season
cabbage can keep for as long as 6 months.
Annual cabbage shipping-point prices trended higher during the
1990s, after a decade of stagnation in the 1980s. Between 1991
and 2001, nominal f.o.b. shipping point prices nearly doubled.
Higher average fresh cabbage shipping-point prices in the face
of rising production likely results from strong demand. In this
case, much of the additional demand is likely coming from fresh
processing firms that use shredded cabbage in salad mixes.
The portion of the cabbage retail value accounted for by the
shipping-point price has been slowly but steadily declining.
During 1995-99, growers and shippers received about 27 percent
of the retail value-up from 24 percent during 1990-94 and 25
percent during 1985-89 but down from 32 percent during 1980-84.
In 2000, when final cabbage retail prices for the year were
reported, shippers had received 29 percent of the retail value.
New York Heads the Pack
According to the 1997 Census of Agriculture, head cabbage is
produced on 4,289 farms in all 50 states--down 22 percent from
1992. Although the number of farms producing cabbage has
declined, production has been trending higher, and average farm
size has increased, powered by demand for fresh-market cabbage.
Over 1999-2001, total annual cabbage production averaged 19
percent above 1979-81 levels.
During this time, cabbage used for sauerkraut (called "liberty
cabbage" during World War I) declined 19 percent, but production
of fresh-market cabbage rose 27 percent. There is little overlap
between the fresh cabbage and sauerkraut markets since
sauerkraut makers prefer cabbage varieties with white interiors
and high solids content (less water). In any given year, 98
percent of cabbage used for sauerkraut is grown under contract
with processors, with open-market purchases limited to a few
hundred acres. According to the 1997 Census of Manufacturers,
there were seven firms manufacturing sauerkraut with sales over
$100,000--the same number as in 1992. These manufacturers
shipped the equivalent of nearly 10 million gallons of
sauerkraut (in cans, jars, and fresh-market polybags), valued at
$20.5 million, to distributors and retailers in 1997.
New York produces about one-fourth of the nation's head cabbage,
with 79 percent of the crop destined for the fresh market. New
York tops the fresh market with 22 percent of national output
and also produces 39 percent of the nation's sauerkraut--second
only to Wisconsin. According to the Census of Agriculture, there
were 389 New York farms growing cabbage in 1997--28 percent
fewer than in 1992. New York's fresh-market production increased
61 percent over the past decade (1989-1991 to 1999-2001). Output
of cabbage for sauerkraut in New York has also increased, rising
23 percent over the past decade. Consolidation among processors
has led to diminishing production in Michigan, Ohio, and
Washington.
Growers in five New York counties planted cabbage on 1,800 acres
or more, led by Genesee (22 percent of state cabbage area),
Monroe (16 percent), and Niagara (15 percent) counties, which
each plant more than 2,000 acres. New York's fresh-market crop
accounts for 95 percent of the State's $77 million in farm cash
receipts for cabbage (1999-2001). New York's fresh-market
cabbage is shipped year-round with planting beginning in early
April. Harvest begins in August and continues into early
December with market shipments strongest from September through
November and seasonally low in June. A portion of the crop is
placed in cold storage and is marketed into the following
summer.
California is the second-largest producer of head cabbage
(virtually all for the fresh market), with 16 percent of
national output and 18 percent of the fresh-market crop.
California's cabbage acreage and production has been trending
higher since bottoming out in the mid-1970s. With a farm value
of $72 million, cabbage production during 1999-2001 averaged 44
percent above that of 1989-1991 and 125 percent above 1979-1981.
According to the Census of Agriculture, cabbage was produced
commercially on 252 California farms in 1997, up 14 percent from
1992 and 50 percent from 1982. Much of the recent acreage gains
have originated in the Salinas Valley of Monterey County--
sometimes referred to as the salad bowl of America and
headquarters for many of the major fresh-cut salad firms in the
U.S. Monterey County accounts for 30 percent of the State's
cabbage acreage, followed by Ventura County with 25 percent.
California harvests and ships fresh-market cabbage year-round
with volume peaking in January and February and again in
September and October.
Texas is the third largest domestic source of head cabbage,
accounting for 13 percent of the U.S. crop and 15 percent of the
fresh-market crop. Despite periods of extreme irrigation water
shortages in key production areas, fresh-market cabbage acreage
and production has increased 23 percent since 1989-91, but
output remains 7 percent below peaks reached in the 1980s. With
a farm value of $53 million, head cabbage was harvested by 152
farms in 1997--down 14 percent from 1992. Hidalgo (39 percent of
the crop) and Uvalde (17 percent) counties are the two leading
production areas in the Lone Star State. Texas harvests and
ships fresh-market cabbage year-round with volume peaking in
January and February and again in September and October.
With 10 percent of U.S. production, Wisconsin is the fourth-
leading source of head cabbage and is the top producer of
cabbage for sauerkraut (nearly half of national output). Two-
thirds of the State's head cabbage (valued at $4 million) goes
into manufacturing sauerkraut. Although the Badger State's
cabbage production during 1999-2001 has not changed much over
the past decade, it stands 25 percent higher than 1979-81. Fresh-
market production is up 44 percent since 1979-81, while cabbage
for sauerkraut is up 16 percent. Despite a downward trend in
both national supply and demand for sauerkraut, production has
been maintained through industry consolidation. According to the
1997 Census of Agriculture, head cabbage is produced on 142
Wisconsin farms--down 34 percent from 1992. Two-thirds of the
acreage is concentrated in Racine (39 percent) and Outagamie (26
percent) counties. Fresh-market cabbage is shipped July-
November, with volume generally peaking in October. Although
Wisconsin only accounts for 4 percent o f U.S. fresh-market
production, the state provides one-third of national supply in
October.
With 145 farms (1997 Census of Agriculture), Georgia supplies
more than 8 percent of U.S. head cabbage (10 percent of the
fresh-market crop)--placing the state fifth. Production in
Georgia was valued at $21 million in 2001--five times larger
than 1979-81. This reflects both a general increase in national
vegetable production over the past two decades, plus the
relocation and/or expansion of farm operations from other
States. In 1997, about 45 percent of the State's head cabbage
acreage was located in Colquitt County--up from 39 percent in
1992.
Trading Heads
Foreign trade plays a relatively minor role in the U.S. fresh
and processed cabbage industries. In terms of value, the U.S.
has historically been a net exporter of cabbage as steady year-
round supplies from an efficient domestic industry keeps prices
low and limits opportunities for imports. In 2001, exports of
fresh-market cabbage totaled $18 million while imports were
valued at $14 million. For sauerkraut, exports totaled $2.7
million while imports totaled $1.1 million in 2001.
Since at least 1960, the U.S. has exported a steady 3-4 percent
of available fresh-market cabbage supply. While export share has
changed little, fresh import share of consumption has increased
from less than 1 percent in the 1960s and 1970s, to 2 percent in
the 1980s, 3 percent in the 1990s, and nearly 4 percent thus far
in the 21st century. Canada takes 89 percent of U.S. fresh
exports, while fresh imports arrive mostly from Canada (55
percent) and Mexico (44 percent). Fresh imports peak in December
but are also strong out of Canada during the summer and fall.
For sauerkraut, imports have averaged under 2 percent of
consumption over time, with Germany accounting for more than
half the volume. About 3 percent of U.S. sauerkraut supplies are
exported annually, with most shipments to Canada.
Cabbage Is Nutrient-Rich
Cabbage, a cruciferous vegetable, is rich in nutrients. It is a
good source of vitamin C, has some vitamin A, and a fair amount
of thiamin, riboflavin,
potassium, and soluble and insoluble fiber. Fresh-market cabbage
is about 93 percent water, low in calories and sodium, and free
of fat and cholesterol. A 100-gram serving of fresh green
cabbage (about one and a half cups of shredded cabbage) contains
24 calories and more than three-fourths of the recommended daily
allowance (RDA) for vitamin C. A 100-gram serving (just under
one-half cup) of undrained sauerkraut contains 19 calories, has
no fat, provides fiber, and has 25 percent of the RDA for
vitamin C.
According to researchers at the Duke Comprehensive Cancer
Center, cruciferous vegetables like cabbage may be powerful anti-
cancer agents. Cabbage reportedly contains 11 of the 15
identified vegetable-related compounds found to deter cancer.
In addition to various fresh uses (salads, slaws, garnishes),
cabbage can be prepared by boiling, steaming, sautTing, baking,
braising, or stir-frying. Cabbage is frequently used in soups,
stews, eggrolls, casseroles, sweet and sour dishes, and meat
dishes, including the traditional corned beef and cabbage meal.
Shredded cabbage can also be used to replace lettuce in tacos.
At retail, fresh cabbage is traditionally sold from bulk
displays and in a variety of fresh-cut products sold in
polybags. A 1-1/2 pound cabbage yields 6 to 8 cups of shredded
raw cabbage.
Americans consumed 3 billion pounds of cabbage (fresh and
processed) in 2001. About 88 percent of cabbage consumption
occurs in fresh forms with the remainder largely in sauerkraut.
According to the USDA 1994-96 Continuing Survey of Food Intakes
by Individuals, 71 percent of all head cabbage is consumed at
home. While the majority of sauerkraut is consumed at home,
coleslaw accounts for the largest share of cabbage consumed away
from home. Reflecting a wide range of food service uses, about
56 percent of coleslaw is consumed away from home, with fast
food (26 percent of all coleslaw) the single largest source. Per
capita use of fresh-market cabbage was 9.1 pounds in both 2000
and 2001 and coleslaw was the primary dietary source of fresh
cabbage for many consumers.
Before recently stabilizing at 1.3 pounds per person, sauerkraut
consumption had trended lower during the 1980s from an average
of 2.2 pounds in the 1960s and 1970s. This may have reflected
occasional negative publicity regarding red meat consumption
(particularly smoked meats) and a general trend away from salty
foods. The recent stabilization in per capita use may reflect
the inclusion of sauerkraut in a wider array of recipes as
consumers search for more variety in foods. Despite the close
association of sauerkraut with deli sandwiches like the Rueben
and the popularity of the condiment on hot dogs, the USDA
consumer diet survey indicated that sauerkraut is largely
enjoyed at home (79 percent of sauerkraut is consumed at home).
The survey indicated that just 6 percent of sauerkraut came from
fast food places, and 8 percent each from other restaurants and
"miscellaneous" places (such as ball parks, arenas, and street
vendors).
Who Eats Cabbage?
Regional breakdowns for total head cabbage consumption indicate
that consumers in the South (a 16-state region defined by the
Census Bureau) eat proportionately more cabbage than all other
regions. This may reflect preferences along racial lines as 53
percent of non-Hispanic blacks reside in the South and blacks
are the only major racial group (aside from Asians) to consume
proportionately more cabbage. Whites and Hispanics each consumed
less cabbage than their respective proportions of the
population. Looking at just sauerkraut, the survey indicated
that three-fourths of sauerkraut was consumed in the Midwest and
East with consumers in the South and West reporting light
consumption.
Among fresh products, whites and Hispanics consumed
proportionately less fresh whole cabbage, while blacks and
Asians ate a larger share. While non-Hispanic blacks account for
close to 13 percent of the population, they consumed 33 percent
of fresh whole cabbage. For coleslaw, whites dominated
the market, consuming 85 percent of all coleslaw, while all
other identified racial/ethnic groups consumed proportionately
less than their population shares. Similarly, whites consumed 91
percent of all sauerkraut, while Hispanics and Asians consumed
very little.
Sauerkraut and coleslaw appear to be favored most by consumers
with the greatest financial means. Survey households identified
as upper income (income 3.5 times the poverty level) represented
39 percent of the U.S. population but consumed 50 percent of the
coleslaw and 43 percent of sauerkraut. For whole fresh cabbage,
the 19 percent of consumers identified as being lower income
households consumed 20 percent of cabbage, while those in the
upper income group consumed 36 percent. For all cabbage, middle-
income households accounted for the greatest share of use (43
percent) with the lower income group consuming proportionally
less.
Men consume about one-fourth more cabbage (fresh and processed)
per capita than women. This may largely be explained by the
higher caloric intake of men, differences in tastes and
preferences, and perhaps a greater consumption of fast foods. In
proportion to their population shares, both men and women over
the age of 40 are strong consumers of cabbage. With the
exception of coleslaw, men aged 20-39 (16 percent of the
population) favor cabbage, particularly sauerkraut, for which
they account for 30 percent o f the total. Curiously, the survey
indicated that women between the ages of 20 and 39 tend to avoid
cabbage of all types.
Relative to other age groups, people under 20 are very light
cabbage consumers. This age group accounts for nearly 30 percent
of the population, yet consumes just 10 percent of all cabbage.
Part of this may reflect a natural ma
