Vegetables and Melons

SIC 0161

Industry report:

This entry includes establishments primarily engaged in the production of vegetables and melons in the open, including asparagus, beans, broccoli, cabbage, cantaloupe, cauliflower, celery, sweet corn, cucumber, green peas, lettuce, onions, peppers, squash, and tomatoes.

Industry Snapshot

Of the produce included in this category, onions, tomatoes, and head lettuce led per capita consumption in the early 2010s. Vegetables and fruits (truck farm products) were the second largest food group in the United States by volume and consumption, behind milk and dairy products. California produced about 50 percent of all fresh vegetables in the United States in terms of volume. Florida accounted for roughly 10 percent, Arizona, 7 percent, and Georgia, 5 percent. According to the U.S. Department of Agriculture, the United States produced $10.4 billion worth of fresh vegetables in 2009.

Generally, produce is sold directly to processors, wholesalers, retailers, or consumers by truck farmers. Large truck farms usually specialize in one or two crops for shipment to the rest of the country, while smaller farms may grow a large variety for sale at local farmers' markets, stands, and stores. Smaller farms may also market their produce together through a cooperative in order to negotiate better prices.

Background and Development

Truck farms developed as people moved to cities and could no longer grow their own produce. With the building of railroads and highways and the development of refrigerated transportation, truck farmers were able to ship their produce farther. Trucks and trains could carry out-of-season produce to the north from truck farms in the south.

Truck farmers in the United States have had to contend with periodic scares regarding the safety of fruits and vegetables. Various consumer and environmental groups claimed that too many pesticides, fungicides, and other chemicals were used on crops. Government agencies and industry groups, however, have insisted the food supply is safe and any chemical residue is well within government limits. Domestic growers have also defended their produce from fears about contaminated imports. Because produce is integrated into stores, usually without differentiation between foreign and domestic products, domestic growers have been concerned their produce would be affected by any suspicion about the quality of the imported goods.

In 1992 the Environmental Protection Agency (EPA) issued new rules requiring employers to protect farm workers from pesticide poisoning, although these national rules were still not as strict as those in place in California. The new rules barred employees from going back into freshly sprayed fields, with the quarantine periods ranging from 12 hours to three days, depending on the chemical used. After pesticide concern continued to escalate, President Clinton signed a bill in 1996 that required the EPA to establish safe levels of tolerance for pesticide residue on both fresh and processed fruits and vegetables. The bill also mandated that the EPA register all new and old pesticides. Chemicals that cause "unreasonable adverse effects" were not registered, according to this piece of legislation. The bill also covered imported produce, calling for the rejection of any imports with unregistered pesticide residue or tolerance-excessive residue of any sort.

Tomatoes are one of the most important commodities in this category, and in the 1990s and the first decade of the 2000s, Florida tomato growers competed with Mexico for winter tomato sales. In 1992, Mexican farmers were able to deliver tomatoes to the U.S. border at about half the $9 production cost of a Florida-grown 25-pound box of tomatoes. However, in 1996, after receiving petitions from concerned growers, the United States and Mexico reached an agreement that placed a lower limit on the cost of a 25-pound box. The pact did not restrict the amount of tomatoes the United States imports; instead it ensured price equity. The tomato processing business was very profitable and the industry expanded quickly, resulting in overproduction and excess capacity. Even though processing tomato farmers reduced acreage by 25 percent in 1992, the California yield was about 7.4 million tons of processing tomatoes.

Other developments in the tomato sector included the introduction of genetically altered plants. California, Mexico, and Florida produced the first genetically altered tomato and in 1994, after five years of testing, the United States Food and Drug Administration (USDA) approved this food--the first of its kind--for public consumption. Tomatoes grown by Calgene Inc. were cleared for distribution to the public under the Flavr-Savr brand name. The tomatoes, which are more expensive than tomatoes grown through more traditional means, were created when scientists isolated the gene that causes tomatoes to soften. They then manipulated its genetic make-up to slow down the softening process, allowing more time on the vine for it to ripen. Public interest groups, however, alleged that the altered tomatoes carried a gene that caused the plant to become resistant to antibiotics and charged that the presence of the gene may cause humans to build up the same resistance. Supporters of the process however, argued that health concerns were unfounded and pointed to the superior taste that resulted from the procedure. The controversy over the safety of genetically modified food continued into the first decade of the 2000s and the 2010s.

Tomatoes have also received some positive media attention as a Harvard medical researcher, Edward Giovannucci, announced a preliminary link between tomato consumption and the reduced risk of developing prostate cancer. Tomatoes contain lycopene, a red carotenoid related to beta-carotene, to which Giovannucci attributed this salubrious effect.

The 1996 Farm Bill introduced a new era of market-oriented production that had ramifications on all agricultural sectors. Analysts received the bill favorably because the legislation offered farmers more flexibility and yet protected specialty crop growers from market fluctuations by stabilizing the commodity market. The bill also promoted more sound business practices through the alleviation of surplus production, making U.S. producers more competitive in the twenty-first century. Additional legislation designed to increase the competitiveness of U.S. producers was signed by President Bush in May of 2002. Among other things, the 2002 Farm Bill mandated that vegetables and melons be labeled with their country of origin as of September 2004. The 2008 Farm Bill continued many of the policies enacted in 2002.

Overall per capita vegetable and melon consumption dropped 2 pounds in 2002 to 439 pounds. An increase in canned and frozen vegetable consumption was offset by a decline in fresh vegetables, due in part to higher prices and recessionary economic conditions.

Current Conditions

In 2009, U.S. farmers produced 20.1 million metric tons of vegetables and melons on about 1.7 million acres of harvested land. As the first decade of the twenty-first century drew to a close, tomatoes pulled ahead of head lettuce in terms of value of production. In 2009, U.S. tomatoes were worth $1.31 billion, whereas head lettuce registered a value of production figure of $1.15 billion, according to the USDA. Onions remained in third place with a value of $843.5 million, followed by watermelon ($460.7 million) and romaine lettuce ($614.1 million).

Lettuce and tomatoes were also in the top five in terms of consumption. In 2009, bulb onions had the highest per capita consumption rate (19.6 pounds), followed by tomatoes (18.9 pounds), head lettuce (17.1 pounds), other lettuce (11.2 pounds), bell peppers (9.1 pounds), and sweet corn (9 pounds). The top three melons in 2010 based on pounds consumed per person annually were watermelon (15.6 pounds), cantaloupe (9.3 pounds), and honeydew (1.65 pounds).

Industry Leaders

Top vegetable and melon growers in the early years of the first decade of the 2000s included Grimmway Farms (Holtville, California), with $3.6 million in 2009 revenues. Family-owned Tanimura & Antle Fresh Foods Inc. of Salinas, California, farmed about 30,000 acres in the United States, Mexico, and South America and shipped fresh produce to the United States as well as countries in Asia and Europe. Dole Food Company, headquartered in Westlake Village, California, and reporting more than $7.6 billion in total revenues in the late years of the decade, was also a major player in the industry.

America and the World

The United States remains one of the largest producers and exporters of canned vegetables, although it has increased its imports of fresh vegetables and melons. In the late years of the first decade of the 2000s, imports of fresh vegetables far outweighed exports. In 2009, the United States imported 24.3 million cwt (hundredweight) of fresh vegetables (not including melons) and exported 6.1 million cwt. About 88 percent of the fresh vegetables imported came from Mexico. Other contributing countries included Canada, China, and Peru.

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