COVER. U.S. HORTICULTURAL EXPORTS SCORE 13TH CONSECUTIVE ANNUAL INCREASE

• Horticultural product exports increased for the 13th straight Fiscal Year ending in September 1997
• We'll take a quick look at the overall export picture for last year and for previous years
• Next we'll look more closely at commodities and countries and the outlook for this fiscal year

Note: Unless otherwise noted, fiscal years used

FIGURE 1. U.S. HORTICULTURAL EXPORTS FORECAST TO RISE AGAIN IN FY 1998

• In fiscal year 1997, U.S. horticultural exports reached $10.6, nearly quadrupling since FY 1985; no other broad export sector has experienced such a steady increase
• Reasons for the increase this past year:
• Exports to Canada benefitted from the progressive lowering of duties under the U.S.-Canada Free Trade Agreement
• Sales to European Union countries continued at a record level
• Except for Japan, growth continued steady to key Pacific Rim and Latin American markets
• Sales to Mexico continued to recover
• For 1998, U.S. horticultural product exports are forecast to set another record at $10.8 billion; this forecast has been reduced from $11.2 billion because of the Asian situation
• Reduced exports to Asian countries experiencing currency devaluations should be partially offset by additional exports there and elsewhere resulting from reduced tariff and phytosanitary barriers in line with NAFTA and the Uruguay Round

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

• Looking at the yellow arrowheads on 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% of total U.S. agricultural exports, compared to less than 25% a decade ago
• In world trade, high value products now account for an even higher 45% share of total agricultural trade
• 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 ... 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 have risen from 13% to nearly 20% of all agricultural exports in just 7 years!
• The share of the export market of consumer-ready products increased sharply in FY 1997, due in large part to increased world demand as noted in the previous chart

FIGURE 4. WORLD MARKET SHARE HOLDS STRONG 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 18.2% in 1994
• Although this declined slightly to 17.4% in 1995, the trend has clearly been up
• Market share percentages of the United States' top competitors either fell or remained practically 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's a more detailed look at how exports have become critical to the success of the U.S. horticultural industry
• More than 70% of almonds go 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, continued to be the largest component of U.S. horticultural exports in FY 1997. Surpassing $2 billion this year, this sector represented 20% of all horticultural exports;
• Next were PROCESSED VEGETABLES ($1.6 billion), up 10% from FY1996
• TREE NUTS ($1.3 billion), down 6%
• FRESH VEGETABLES (at $1.1 billion), up 9%
• WINE and BEER ($718 million), up 7%
• JUICES ($684 million), up 3%
• PROCESSED FRUIT ($663 million), down 2%
• ESSENTIAL OILS ($619 million), up 8%; and
• OTHER ($1.9 billion), up 15%

FIGURE 8. CANADA REMAINS THE TOP MARKET FOR HORTICULTURAL PRODUCTS

• At $2.9 billion, CANADA continued to be the top market for U.S. horticultural exports in FY 1997, up from $2.6 billion in FY 1996;
• Note, however, that Canada's share of total U.S. horticultural exports has declined to 27% last year from 31% in FY 1992, as U.S. markets have broadened
• Exports to the EUROPEAN UNION (EU) are $2.2 billion, up less than 1% from FY 1996
• Exports to JAPAN decreased again slightly for the second straight year to $1.8 billion in FY 1997
• Strong growth characterized sales to other Asian countries, led by HONG KONG
• In FY 1997, MEXICO was up 30 % over FY 1996

FIGURE 9. THE TOP 5 GROWTH MARKETS: 1993-1997 (OF MARKETS OVER $100 MILLION IN U.S. HORTICULTURAL EXPORTS)

• The ASIAN REGION had the most countries with the highest percentage increase over 5 years, among the already big U.S. markets with over $100 million in sales
• Exports to BRAZIL, at $138 million, have increased the most dramatically in percentage over the last 5 years
• ASIAN COUNTRIES rounded out the list: the PHILIPPINES ($124 million), KOREA ($275 million), HONG KONG ($641 million), and TAIWAN ($400 million)

Note: much of the Hong Kong merchandise goes into China

FIGURE 10. THE TOP 5 GROWTH MARKETS: 1993-1997 (OF MARKETS UNDER $100 MILLION IN U.S. HORTICULTURAL EXPORTS)

• Exports to INDONESIA were up more than 266% to over $90 million as lower trade barriers and MAP funds help to fuel demand for U.S. fruits and vegetables
• Although exports to ISRAEL were down to $74.1 million in 1997, U.S. exports over the last five years were up over 154%
• Despite economic uncertainty, RUSSIA remained the fourth largest major growth market under $100 million. Exports have risen more than 152% over the last 5 years although exports are down in 1997
• Exports to IRELAND were up 118% over the last 5 years, reaching $36.7 million in 1997
• Exports to PARAGUAY were up 690%, making that country the largest major growth market under $100 million. Paraguay is also the fifth largest South American market for U.S. fruits and vegetables

FIGURE 11. THE TOP 10 HORTICULTURAL EXPORTS IN VALUE IN FY 1997

• ALMONDS were number one again at $880 million, even though down 7% from last year
• At $412 million, APPLES were up 11%. A higher apple crop and increased shipments characterized FY 1997
• WINE at $390 million was up 28%, that commodity's 13th consecutive record-breaking export year
• ORANGES, at $323 million, were up 12%. Japan, Canada, and Hong Kong were the main destinations
• GRAPES rose to $310 million, up 2%. Canada and Hong Kong import most of U.S. grapes
• ORANGE JUICE rose to $303 million, up 11%. Canada, Japan and the EU imported most of U.S. orange juice
• FROZEN FRENCH FRIES at $294 million were up 15% from last year

FIGURE 12. MARKET ACCESS PROGRAM (MAP) STAR PERFORMERS AROUND THE WORLD

• The private sector and FAS conduct Market Access Program (MAP) activities all over the world for over 40 different horticultural commodities
• The countries shown on this map are those countries where we have experienced the most success with expanding sales through MAP in the past few years
• The following charts depict the greatest 5-year percentage gains in value for specific commodities under MAP in selected countries around the world
• The 5-year gain is based on the difference between FY 1993 - FY 1997 and does not represent average growth

FIGURE 13. UNITED KINGDOM: A TRADITIONAL MARKET CONTINUES TO GROW

Turning first to a traditional European market, star performers in the United Kingdom over the last 5 years were:

• STRAWBERRY exports, up over 100% to $7.4 million
• GRAPEFRUIT exports, up 77% to $8.8 million
• FRESH CHERRY exports, sharply increased nearly 200% to $13.4 million
• RAISIN exports up 16% to $42.3 million
• WINE exports up sharply by over 150% to $101.8 million

FIGURE 14. BRAZIL: U.S. HORTICULTURAL EXPORTS CONTINUE TO THRIVE

Star performers over the last 5 years in this burgeoning new Latin American market, now the eighth largest horticultural export market:

• WINE exports rose almost 11-fold to $1.9 million
• WALNUT exports increased nearly 5-fold to $5.8 million
• APPLE exports skyrocketed over 16-fold to $7 million
• PEAR exports were up 13-fold to $8.7 million
• HOP exports rose 61% to $17.5 million

FIGURE 15. JAPAN: U.S. HORT PRODUCTS CONTINUE TO RIDE IMPROVEMENTS FOLLOWING RECENT RECESSION

While the Japanese economy has been experiencing a period of slow growth, and despite yen depreciation against the U.S. dollar, some MAP-supported commodities have been able to rack up percentage gains even with an overall decrease in U.S. hort exports for the past 2 years

Star performers in Japan over the last 5 years:

• BLUEBERRY exports increased a whopping 473% to $1.6 million
• Although off to a bumpy start because certain popular U.S. varieties are still not permitted to be imported, APPLE exports reached nearly a half million dollars
• PISTACHIO exports were up 86% to $4.2 million
• FRUIT JUICE exports were up 614% to $14.6 million
• ALMOND exports increased 113% to $79.6 million

FIGURE 16. PHILIPPINES: COMING "ASIAN MIRACLE" FOR U.S. PRODUCTS

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

Star performers in the Philippines over the last 5 years:

• PISTACHIO exports increased a smashing 6-fold to $.7 million
• FRENCH FRY exports more than tripled to $13.4 million
• APPLE exports were up over 300% to $16 million
• GRAPE exports increased 229% to $16.7 million

FIGURE 17. KOREA: RECENT AGREEMENTS OPEN NEW MARKET FOR U.S.

Star performers in Korea over the last 5 years:

• TART CHERRY exports soared 388% to $216,795
• WALNUT exports were up over 14-fold to $2.8 million
• WINE exports were up 278% to $3.5 million
• KIWIFRUIT exports were up 249% to $2.8 million
• GRAPE JUICE exports increased 18-fold to $14.2 million

FIGURE 18. MORE MAP SUCCESSES

Not all the export successes over the past 5 years show up in the previous charts, which as you remember were by percentage increases in value over a 5-year period

The following chart gives you some idea of some commodities that didn't fit this criterion but still scored major gains:

* FY 1997

FIGURE 19. THE LONG TERM FUTURE FOR U.S. HORTICULTURAL PRODUCTS IS BRIGHT: NEW MARKETS AND MARKET NICHES TO CONQUER

• CHINA - A potential market for many products, particularly in the booming economic centers in the South, especially FRESH FRUITS and even certain high quality VEGETABLES once phytosanitary barriers and high tariffs are overcome
• INDIA - Only products allowed in now are ALMONDS, BULK PISTACHIOS and RAISINS! The sky's the limit if barriers come down!
• JAPAN - Potential for expanded sales as remaining access barriers are overcome (MORE APPLE/STONE FRUIT VARIETIES/STATES; PEPPERS, EGGPLANTS)
• KOREA - Many products continue to face phytosanitary-based import bans (APPLES, STONE FRUIT) and/or high duties, although certain vegetables can enter; 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 MORE STATES) 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 (a decision on FLORIDA CITRUS is pending) 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 (FRESH AND PROCESSED FRUITS AND VEGETABLES)
• GULF COOPERATION COUNCIL (GCC) - Kuwait leads the 6-nation Gulf Cooperation Council in growth (PROCESSED VEGETABLES/FRUIT)
• SOUTH AMERICA - Recent technical agreements with Brazil ensure continued market access for DECIDUOUS FRUITS
• TAIWAN - New opportunities for FRESH VEGETABLES as vegetable farmland shrinks in that country
• WORLDWIDE - The demand for ORGANICS is increasing strongly, especially in Japan and France

Last modified: Tuesday, May 08, 2001