CHALLENGES FOR U.S. FRESH ORANGE AND LEMON PRODUCERS
EVOLVING GLOBAL MARKET POSES CHALLENGES FOR U.S. FRESH ORANGE AND LEMON PRODUCERS, SAYS ITC
U.S. producers of fresh oranges and fresh lemons, who have enjoyed a dominant position among world producers, face new challenges both at home and abroad as the global market for fresh oranges and lemons becomes increasingly more competitive, reports the U.S. International Trade Commission (ITC) in its publication Conditions of Competition for Certain Oranges and Lemons in the U.S. Fresh Market.
The ITC, an independent, nonpartisan, factfinding federal agency, examined the competitive conditions of fresh orange and lemon industries of the United States and seven other countries at the request of the U.S. House of Representatives Committee on Ways and Means.
As requested, the ITC report profiles the fresh orange and lemon industries in the United States and seven other countries – Argentina, Australia, Chile, China, Mexico, South Africa, and Spain; compares their strengths and weaknesses; and assesses the prevailing conditions of competition, including production costs, in each of the countries. Highlights of the report follow.
Global production of fresh oranges and lemons has evolved substantially in recent years, experiencing significant shifts in production, consumption, trade, and marketing. Growth in production and consumption was led by developing countries, while output and consumption among traditional developed country suppliers has been stable or declining. Demand for fresh oranges and lemons in developed markets has leveled off with a shift toward processed products, while consumption in developing markets is increasing as incomes rise.
The competitive environment in the global market for fresh oranges and lemons has changed significantly in recent years. Technological advancements in storage and shipping, and trade liberalization, resulted in expanded trade. Historically, the U.S. industry has enjoyed a dominant position among world orange and lemon producers; however, producers in other countries are now able to meet U.S. quality at the same or even lower costs of production. Many new export players increasingly supply high- quality oranges and lemons that compete directly with traditional suppliers. In addition, these countries generally have low domestic consumption of fresh oranges and lemons, so that any increases in production are most likely to be shipped for export.
Although an analysis of input costs of production across countries is a key component to determining industries’ relative strengths and weaknesses, the methodological considerations for international cost comparisons, documented in the economic literature are complex. Cost data for both oranges and lemons compiled by the Commission from varied sources appear to indicate low relative farm-level costs per unit output in Argentina, Mexico, and Australia for both oranges and lemons. Commission data appear to indicate high relative farm-level costs per unit output in the United States, Spain, and Chile for both oranges and lemons.
Conditions of Competition for Certain Oranges and Lemons in the U.S. Fresh Market (Investigation No. 332-469, USITC Publication 3863, July 2006) will be available on the ITC’s Internet site at http://hotdocs.usitc.gov/docs/pubs/332/pub3863.pdf. A CD-ROM of the report may be requested by calling 202-205-1809 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.
ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission’s objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.