HORTICULTURAL PRODUCT EXPORTS increased for the twelfth straight year in FY 1996. This presentation will give you a quick look at the overall export picture for last year and for previous years, as well as a closer look at several commodities and countries, including those with growth potential. The report concludes with a quick look at Market Access Promotion Program star performers

Unless otherwise noted, years are fiscal.

FIGURE 1--U.S. HORTICULTURAL EXPORTS FORECAST TO RISE AGAIN IN 1997 Exports of U.S. horticultural products reached a record $10.0 billion in FY 1996; exports rose 4 percent over last year, and have more than tripled over the past 11 years

Bigger sales of nuts and wine to the European Union, which returned to second place as a U.S. export market, helped offset slightly reduced sales to Canada, Japan, and Mexico. A slowing in the growth rate this past year was due to:

• A larger vegetable crop in Japan, reducing demand for imports, and for a few commodities, a weaker yen versus the U.S. dollar
• Lower U.S. vegetable prices combined with inelastic demand in Canada
• Only a partial recovery in exports to Mexico since the peso crisis of December 1994
• Temporary shutdowns of several Latin American markets because of phytosanitary problems

And a point to ponder: are we seeing the effects of sharply reduced Market Access Program funding?

The outlook for FY 97 is for U.S. horticultural exports to expand to $10.6 billion, assuming:

• Sales to Mexico continue their current pace of recovery
• Exports to Canada benefit from the progressive lowering of duties
• No additional significant appreciation in the dollar against the Japanese yen will occur
• Growth continues steady to key Pacific Rim and Latin American markets

FIGURE 2--HIGH VALUE PRODUCTS HAVE LED U.S. EXPORT GAINS

Looking at this chart, you can see how the high value products horticultural, livestock, poultry, dairy, and other consumer products have seen the greatest increases over the past 12 years

• These high value products now account for about 40 percent of total U.S. agricultural exports compared to less than a quarter a decade ago
• The bulk and intermediate products have increased, but not as fast
• Nearly every time we show this chart, people are surprised by the shifts that have occurred in the composition of U.S. agricultural exports over the past decade! Especially horticultural products!

FIGURE 3--HORTICULTURAL PRODUCTS AND OTHER CONSUMER FOODS PLAY AN IMPORTANT ROLE IN TOTAL U.S. EXPORTS

• In FY 1997, the consumer-ready category, into which most horticultural exports fall, experienced sharp gains
• Horticultural exports rose from 13% to nearly 20% of all agricultural exports in just 7 years!
• The share of the export market of consumer-ready products is expected to increase sharply in FY 1997, due in large part to increased world demand

FIGURE 4--WORLD MARKET SHARE SOARS FOR U.S. FRUITS, NUTS, AND VEGETABLES

• The world market share for U.S. products grew from 12.8% in 1986, to an all-time high of 18.8% in 1994
• Market share percentages of the United States' top competitors either fell or remained flat for the same period

FIGURE 5--U.S. FRUIT AND VEGETABLE EXPORTS ARE RISING AT A FASTER PACE THAN PRODUCTION

• The structure of the U.S. horticultural industry is changing
• Exports are becoming more and more important to horticultural producers' overall sales
• From 1984 through 1996, U.S. fruit, nuts, and vegetable PRODUCTION rose 64%, while EXPORTS jumped 269%
• Moreover, during the same period, fruit, nuts, and vegetable exports as a percentage of production increased from 17% to 38%

FIGURE 6--IMPORTANCE OF EXPORTS FOR SELECTED U.S. HORTICULTURAL PRODUCTS

Here is a more detailed look at how exports have become critical to the success of the U.S. horticultural industry

• More than 70 percent of almonds goes into export, while high percentages for many other fruits, vegetables and nuts are also shipped
• If this trend continues as expected, exports will become even more important to U.S. producers of these and other products

FIGURE 7-- FRESH FRUITS LEAD THE WAY

• FRESH FRUITS, including citrus, continue to be the largest component of U.S. horticultural exports in FY 1996. At almost $2 billion, this sector represented over 20% of all horticultural exports;
• Next were PROCESSED VEGETABLES ($1.4 billion), up 1%
• TREE NUTS ($1.4 billion), up 24%
• PROCESSED FRUIT ($684 million), up 1%
• WINE and BEER ($674 million), up 8%
• JUICES ($665 million), up 5%
• FRESH VEGETABLES (at $979 million), down 14%
• MISCELLANEOUS ($2.2 billion), up 6%

FIGURE 8--CANADA REMAINS THE TOP MARKET FOR HORTICULTURAL PRODUCTS

• At $2.6 billion, CANADA continued to be the top market for U.S. horticultural exports in FY 1996, although down just slightly from FY 1995, due to the lower unit value vegetable sales
• Exports to the EUROPEAN UNION (EU) were 2.0 billion, up 12% from FY 1995. In value terms, the EU regained its place as the second largest market
• Exports to JAPAN decreased slightly to $1.8 billion in FY 1996, pushing that country to third
• MEXICO fell just a fraction, but showed recovery after the sharp drop caused by the December 1994 peso devaluation and related economic problems. Additional recovery is expected in FY 1997
• The recent entrant into the top ten, BRAZIL, moved from tenth to eighth place. Horticultural exports to Brazil increased 13% in FY 1996; the Phillippines made its first appearance on the chart

FIGURE 9--THE TOP 5 GROWTH MARKETS: 1992-1996 (OF MARKETS OVER $100 MILLION IN U.S. HORTICULTURAL EXPORTS)

• ASIA again ranked as our top growth region among the already big U.S. markets
• JAPAN led the way, although overall imports were down slightly from the previous year
• Exports to BRAZIL, at $134 million, have increased the most dramatically in percentage over the last five years
• Other ASIAN TIGERS, Hong Kong ($534 million), Taiwan ($353 million), and Korea ($230 million), rounded out the list

Note: much of the Hong Kong merchandise goes into China

FIGURE 10--THE TOP 5 GROWTH MARKETS: 1992-1996 (OF MARKETS UNDER $100 MILLION IN U.S. HORTICULTURAL EXPORTS)

• Exports to the PHILIPPINES have increased more than 90 percent in the last five years, as trade barriers slowly come down
• Despite economic uncertainty, horticultural exports to RUSSIA continue to boom. In the past 5 years, exports have risen 780%
• Again, Asia ranked high as exports to MALAYSIA and INDONESIA continued to set records
• Exports to the DOMINICAN REPUBLIC have made that country a small but important market

FIGURE 11--THE TOP 10 HORTICULTURAL EXPORTS IN VALUE IN FY 1996

• ALMONDS were number one again at $855 million, up 18% from last year
• APPLES at $371 million, were down 8%. A lower apple crop and higher prices slowed shipments in FY 1996
• WINE at $305 million was up 41 percent, the twelfth consecutive record-breaking year, and leaped from eighth to third (includes $17 million nongrape wines)
• TABLE GRAPES at $303 million, were up 21% from last year, moving that commodity from sixth place to fourth
• ORANGES at $277 million, were down 11%. Japan and Canada, the main destinations, accounted for most of the decrease
• ORANGE JUICE remained unchanged at $275 million. Canada, Japan and the EU import most of U.S. orange juice

FIGURE 12--FASTEST GROWING COMMODITIES - ALMONDS CRACKLE

Looking at five-year growth by value shows how quickly exports have grown over the past five years!

ALMONDS, WINE, AND FRENCH FRIES have led the horticultural sector in overall growth, followed by ORANGE JUICE and GRAPES

Looking at five-year trends (FY 1992 to FY 1996) reveals some long term gainers:

Market Access Program (MAP) Star Performers Around the World

• Market Access Program (MAP) activities all over the world for over 30 different horticultural commodities

• Not all the export successes over the past five years show up in the following charts; to give you an idea of what we had to skip!

The following charts depict the greatest percentage gains for the biggest value commodities among MAP products in selected countries

FIGURE 13. BRAZIL: TOTAL U.S. HORTICULTURAL EXPORTS CONTINUE TO RISE

Star performers over the last five years in this burgeoning new Latin American market, now the eighth largest horticultural export market:

• PEAR exports were up over 8-fold $8.9 million
• APPLE exports have risen over 27-fold to $5.8 million
• WALNUT exports were up 8-fold to $4.4 million
• STONE FRUIT exports have skyrocketed over 22-fold to $4.2 million
• GRAPE exports have risen over 10-fold to $2.8 million
• PISTACHIO exports have grown over 8-fold to $1.9 million

FIGURE 14. JAPAN: U.S. HORTICULTURAL PRODUCTS SUCCESSFULLY BATTLE RECESSION

Last year Japan slipped to third place, due to

• RECESSION,
• LOWER VEGETABLE DEMAND, and for a few products,
• YEN DEPRECIATION against the dollar,

switching places with a resurgent European Union; but if longer term trends resume, Japan could still overtake Canada to become the top U.S. horticultural export market by century's end

Star performers in Japan over the last five years:

• FRENCH FRY exports have increased 50% to $136.8 million
• ALMOND exports have increased almost 150% to $94.2 million
• STRAWBERRY exports were up almost nearly 60% to $46.4 million
• RAISIN exports have increased 22% to $39.9 million
• WALNUT exports have boomed 145% to $37.1 million

FIGURE 15. INDONESIA: BRIGHT NEW MARKET FOR U.S. HORTICULTURAL PRODUCTS

TARIFF CUTS, INCREASED INCOMES, BETTER SHIPPING ROUTES, and RECENT MAP PROMOTIONS have all combined to make Indonesia one of the fastest growing markets for U.S. horticultural products

Star performers in Indonesia over the last five years:

• APPLE exports have zoomed 325% to $33.6 million
• GRAPE exports were up over 70% to $7.1 million
• FRENCH FRY exports have soared 300% to $5.8 million
• FRESH CITRUS exports have gone up 140% to $2.0 million

Note that these figures are probably understated, since some exports to Indonesia are routed through Singapore

FIGURE 16. KOREA: RECENT AGREEMENTS OPEN NEW MARKET FOR U.S.

Star performers in Korea over the last five years:

• FRENCH FRY exports were up over 60% to $17.0 million
• ORANGE exports were up over 13-fold to $13.9 million
• WINE exports have increased 530% to $2.9 million
• WALNUT exports have soared almost 11-fold to $2.13 million
• PISTACHIO exports have tripled 200% to $1.95 million

FIGURE 17. RUSSIA: A SLEEPING GIANT WAKES UP TO U.S. PRODUCTS

Star performers in Russia over the last five years:

• APPLE exports have increased to $7.3 million after entering the Russian market just four years ago
• FRESH VEGETABLE exports have increased from essentially nothing to $5.2 million
• PEAR exports have increased from nothing to $1.9 million
• ORANGE exports have increased from essentially nothing to $1.7 million
• GRAPE exports have increased from nothing to nearly $450,000 million

Many of these exports are heading to the Russian Far East cities of Vladivostok and Khabarovsk

FIGURE 18. PHILIPPINES: COMING "ASIAN MIRACLE" FOR U.S. PRODUCTS

The Philippines has begun to import additional U.S. horticultural products in good quantities

Star performers in the Philippines over the last five years:

• GRAPE exports have increased 140% to $15.2 million
• APPLE exports were up 100% to $11.5 million
• FRENCH FRY exports have doubled to $10.5 million
• CANNED FRUIT exports have increased 90% to $7.0 million
• ORANGE exports have risen 160% to $3.9 million
• WINE exports have increased a smashing 275% to $1.4 million

FIGURE 19. THAILAND: ANOTHER NEW MARKET BECKONS FOR U.S. HORTICULTURAL PRODUCTS

Star performers in Thailand over the last five years:

• FRENCH FRY exports have gone up 320% to $4.2 million
• WINE exports have risen over 10-fold to $4.1 million
• GRAPE exports have jumped a full 380% to $3.6 million
• STONE FRUIT exports have zoomed 140% to nearly $680,000
• ALMOND exports have risen almost nearly 13-fold to $725,000

FIGURE 20. UNITED KINGDOM: A TRADITIONAL MARKET CONTINUES TO GROW
Star performers in the United Kingdom over the last five years:

• WINE exports have gone sharply by 130% to $79.4 million
• ALMOND exports have risen over 100% to $53.2 million
• PRUNE exports have increased 25% to $11.3 million
• FRESH CHERRY exports have gone up 11% to $9.8 million
• GRAPE exports have risen over 16-fold to $12.2 million

FIGURE 21. ISRAEL: U.S. PRODUCTS INCREASINGLY COMPLEMENT THE MEDITERRANEAN DIET

Star performers in Israel over the last five years:

• ALMOND exports have risen 65% to $11.2 million
• WALNUT exports have gone up 30% to $8.8 million
• PEAR exports have increased from nothing to $3.5 million
• PRUNE exports have increased 100% to $2.17 million
• GRAPEFRUIT JUICE exports have soared 225% to $1.7 million

FIGURE 22. MALAYSIA: A STRONG, STEADILY GROWING MARKET FOR U.S. HORTICULTURAL PRODUCTS

Star performers in Malaysia over the last five years:

• APPLE exports have risen 73% to $11.1 million
• ORANGE exports were up 50% to $8.9 million
• GRAPE exports have nearly doubled to $9.6 million
• ALMOND exports have risen 340% to $4.0 million
• PISTACHIO exports have gone from nothing to nearly $1 million

FIGURE 23. THE LONG TERM FUTURE FOR U.S. HORTICULTURAL PRODUCTS IS BRIGHT: NEW MARKETS AND MARKET NICHES TO CONQUER

• CHINA - Potential market for many products, particularly in the booming economic centers in the South, especially FRESH FRUITS, once phytosanitary barriers and high tariffs are overcome
• INDIA - The only products that can enter freely now are ALMONDS, PISTACHIOS (bulk only) and RAISINS! The sky's the limit if barriers come down!
• JAPAN - Potential for expanded sales as remaining access barriers are overcome (MORE APPLE VARIETIES/STATES, TOMATOES, PEPPERS, EGGPLANTS)
• KOREA - Many products continue to face phytosanitary-based import bans (APPLES, STONE FRUIT) and/or high duties; virtually no U.S. products available outside Seoul area
• AUSTRALIA - Excellent market potential for a range of U.S. fruits (TABLE GRAPES. STONE FRUIT, FLORIDA CITRUS, CHERRIES FROM WIDER AREA) once phytosanitary-based import bans are overcome
• MEXICO - NAFTA helping to improve access, but several high potential export commodities remain banned or restricted (CHERRIES, STONE FRUIT, APPLES, FLORIDA CITRUS)
• SE ASIA - Excellent prospects as Malaysia, Indonesia, and the Philippines grow into full-size tigers, joining the ranks of Singapore (FRESH and PROCESSED FRUITS AND VEGETABLES)
• VIETNAM - Only recently opened to U.S. products (APPLES, GRAPES, CITRUS), OTHER HORTICULTURAL PRODUCTS to follow
• THAILAND - Excellent further potential, particularly once high import duties are reduced. Recent phytosanitary agreement opened a new market for U.S. CITRUS. Tariffs on TREE NUTS and RAISINS were cut sharply in 1996 in response to USDA/industry initiative
• RUSSIA, EASTERN EUROPE - Already an important growth region, particularly the Russian Far East. Eastern Europe has good potential for future economic growth and market development
• GULF COOPERATION COUNCIL (GCC) - Kuwait leads the 6-nation Gulf Cooperation Council in growth (CANNED VEGETABLES, FRUIT)
• SOUTH AMERICA - Recent technical agreements with Brazil ensure continued market access for DECIDUOUS FRUITS.
• Access barriers remain in Argentina and Chile for most FRESH FRUITS. Future free trade agreements could expand access

Last modified: Tuesday, May 08, 2001