NFAPP's Newsletter January 1996

Featured Articles :

"A Bromide for Methyl Bromide", by Timothy J. Richards
Topic: Phytosanitary Regulations

"Legislative Update.....Methyl Bromide", by Pamela Mischen
Topic: Phytosanitary Regulations

"Market Watch.....U.S. Cabbage Update", by Pieter van Ispelen
Topic: The U.S. Cabbage Market

Phytosanitary regulations exist to prevent the entry of potentially hazardous materials into a country that could pose economic and/or environmental losses to that country's indigenous population, environment, plants and animals. Many of our trading partners' phytosanitary standards require fumigation of produce exports prior to shipment. Methyl bromide is the most widely used fumigant because alternative methods that would provide the same measure of protection currently do not exist.

However, the Clean Air Act bans the production and importation of methyl bromide by the year 2001, with no exemption for agriculture. The Montreal Protocol, which is the international standard followed by our trade competitors, exempts agricultural utilization of methyl bromide for quarantine and fumigation purposes. This clearly places U. S. Agricultural interests at a disadvantage in the international market. Currently before Congress, the Miller Bill represents the latest attempt to "level the playing field" by establishing similar standards for U.S. growers and by extending the execution date for methyl bromide to allow for the research and identification of economically viable alternatives.

In an effort to meet the obligations of the Montreal Protocol without placing the farmers of the United StaIn tes at a competitive disadvantage versus foreign growers, Rep. Dan Miller (R-FL) along with twelve other Congressmen representing major fruit and vegetable growing districts proposed H.R. 2230 on August 4, 1995. This bill would "level the playing field" by requiring that regulation of methyl bromide be no more stringent or restrictive than required by the Montreal Protocol.

At a meeting of the Parties of the Montreal Protocol which took place from Nov. 27 - Dec. 7, 1995, it was agreed that a production phase out for industrial nations would be as follows: 25% reduction in 2001, 1 50% reduction in 2005 and a 100% phase out in 2010.

H.R. 2230 was referred to both the House Committees on Agriculture and Commerce. The Ag Committee is expected to take action on the bill this spring.

Of a more immediate nature for methyl bromide users in California is the withdrawal of the compound due to a missing study required for its re-registration. Under California Law, the health and safety effects of methyl bromide must be studied before it can be re-registered. Due to a disagreement on the procedures for one of the required studies, the deadline for the study was missed.

Before a decision is taken on whether or not to maintain the ban, lawmakers must carefully weigh the costs against the benefits of removing methyl bromide from the market. Although quantitative measures of the health and environmental risks attributed to methyl bromide are nearly impossible to calculate, environmental and consumer groups have been effective in alerting the public as to the likely consequences of its continued widespread use. The cost to U.S. agriculture, however, is somewhat more clear.

Without the use of methyl bromide, U.S. growers face the loss of several important markets. Cherries and apples to Japan, stone fruit to Canada, cherries to Mexico, and apples and pears to Columbia are just a few examples that have come to light recently. As the potential for U.S. exports of these commodities grow, the potential loss looms ever larger. In fact, Table 1 shows that a complete loss of just these markets represents a potential cost to the U.S. economy of over $315 million in the year 2001.

Although NFAPP export forecasts provide an estimate of the potential value of losses, they invariably underestimate the true cost. In particular, these estimates do not include losses from growers who have anticipated the methyl bromide ban. Assuming that the ban will be in place, these growers chose not to enter markets that require fumigation due to the unavailability of fumigation facilities, product degradation due to fumigation, and fears of losing their investment in a technology that will be worthless after the ban is in place. For example, until 1989 Mexico allowed the importation of U.S. Northwestern cherries. Beginning in 1990, Mexican phytosanitary regulations regarding cherries required methyl bromide fumigation prior to border entry for containment of the apple maggot and oriental fruit moth. Since this Mexican phytosanitary regulation went into effect, Northwestern growers ceased shipments of cherries to Mexico. Negotiations between the U. S. and Mexico over this issue are in progress, where officials are in disagreement regarding the specific nature of the hazards.

Besides resolving an important issue to U.S. cherry growers, these negotiations are viewed as a test of the dispute resolution mechanism written into the North American Free Trade Agreement (NAFTA). The addition of cherries to the growing list of commodity interests taking issue with various aspects of the NAFTA - a list that now includes Florida winter tomatoes, California avocados, California grapes, and Maine potatoes - however, may begin to tax the patience of growers in general. Successful resolution of this matter is especially important as the U.S. enters negotiations with Chile, and others, for inclusion in a more comprehensive free trade area within the Western hemisphere.

Cabbage Market Update

The U.S. fresh cabbage market is fairly stable at the moment. Total shipments this season (600 million lbs) equal the shipments last year this far into the season. Prices are moderately high and the crops haven't been damaged much by the extreme weather circumstances. In Texas there was still some uncertainty about the effects of a hard freeze. Texas is the biggest supplier at this time of year, although cabbage is shipped all year round. Prices are strong, at $8 - $9 per cwt, considering a low of $5 earlier this season. Texas competes for the eastern market with supply from Florida and New York, and in the west with California shipments. Georgia's fall season is winding down but still receives strong prices. A moderately high price of $7 per cwt was still received in the third week of January, with normal average prices ranging about $5-$6. Georgia has two distinctive marketing periods, being the fall and spring crop. The fall crop comes into play in October and is usually completed in January although some late plantings are stretching out the season a little bit this year. The next crop is marketed from late April until early June. The market over the fall season has been stable without major ups and downs, and prices ranging from $5-$7.

New York is the biggest U.S. producer of cabbage over the whole year. Major harvesting is done in October, but storage possibilities enables the shippers in New York to supply cabbage all year long. Total harvested acres amounted for 13,400 acres in 1995, 900 acres more than 1994 but 200 acres below the 1993 figures. Texas is the second largest producer of cabbage (9,700 harvested acres in 1995; 11,200 in 1994) with California, Georgia and Florida contributing significant production.

Total U.S. harvested acreage has increased slightly from last year ( 74,810 in 1994 to 75,880 in 1995), but is still well below values in the past (in 1992 for example total U.S. harvested acres amounted to 82,150). However, while harvested acres have been decreasing, fresh cabbage production has been trending upward since 1960, reaching a high in 1994 of 25.6 million cwt. This is due to increasing yields over the years. The production in 1995 was down from that high with a total of 24 million cwt, and a yield of 316 cwt per acre, compared to the peak value of 343 cwt per acre in 1994. The average grower price received in 1995 was two dollars higher per cwt than the year before (11.5 compared to 9.34) , but on the same level with the 1993 average price.

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