AN ECONOMIC ASSESSMENT OF CAULIFLOWER Executive Summary The U.S. produced an average 7.4 million cwt of cauliflower annually between 1988 and 1993. Eighty-six percent of that total was destined for fresh-market use. The remainder was processed, primarily as frozen product. Cauliflower is produced mainly in California, Arizona, Oregon, and New York. Seventy-eight percent of U.S. production came from California in 1993 and 10 percent from Arizona. Although the USDA reports acreage and production only for six states (those listed above, plus Michigan and Texas), cauliflower is grown throughout the Northeast and Midwest. The Census reported 38 states (including Alaska and Hawaii) having farms with cauliflower sales in 1987, and ad hoc disaster assistance records indicate that payments were made for cauliflower in 39 states. Although grown in America since the 18th century, cauliflower has become an important vegetable only since about 1920. Per capita use of fresh and frozen cauliflower increased from an estimated 1.2 pounds (farm weight equivalent) in 1970 to 2.4 pounds in 1993. Per capita use has declined slightly since the peak per capita consumption of 3.2 pounds was reached in 1988. Month-to-month changes in cauliflower prices are very substantial and create a significant price risk. Even so, cauliflower prices follow a fairly well-defined seasonal pattern. They are typically lowest during May to October, and highest during December. The lowest prices occur during the Summer, when California's production is augmented with cauliflower from the East and Midwest. The Census reported 1,962 farms with 54,581 acres of cauliflower in 1987. This represents a decrease of 666 farms, and an increase of about 4,400 acres, from 1982 levels. A decline in farm numbers and acreages occurred in the East and Midwest, while farm numbers in the West remained virtually unchanged and harvested area in those states increased. Partial data from the 1992 Census indicate that growth in acreage may have slowed or stopped. Off-farm employment does not appear to be a major source of diversification for farms growing the bulk of U.S. cauliflower. However, income from other crops, especially other vegetables, is a major source of revenue, accounting for the bulk of farm receipts. Of the $833 million in market sales reported by the 1987 Census for the six major cauliflower states, $644 million was from the sales of vegetables and melons. The estimated value of U.S. cauliflower production in those states was $188 million in 1987. Cauliflower is a cool-season crop, and produces the best quality heads at temperatures between 58o F and 68o F. Depending on the stage of growth, the cauliflower plant requires 1 to 2 inches of moisture per week. Excessive moisture during the first 2-3 weeks after transplanting increases the incidence of root diseases and may cause cauliflower to "button" (form heads prematurely). Prematurely-formed heads are generally too small to market. They are also usually yellow, because the plant's leaves have typically not yet developed adequately to protect the curd from direct sunlight. Cauliflower is the most sensitive of the cole crops to adverse weather. Mature cauliflower plants can withstand temperatures as low as 25o F for several hours late in the Fall without damage to the curd. However, young plants subject to freezing temperatures often "button," or suffer from "blindness"--that is, they do not develop a head. Warm temperatures can also promote disorders. Cauliflower heads maturing at temperatures above 85o F may suffer from "leafy head," riciness (over-mature florets), discoloration (generally purple or green in color), soft and loose heads, or poor "wrapper leaf" development. Good development of wrapper leaves is needed to assure that the curd maintains its white color. Cauliflower's large leaves lose moisture at a fast rate and irrigation is often needed to prevent water stress and yield losses. Nationally, 92 percent of the cauliflower harvested acreage was irrigated in 1987, with nearly all acreage irrigated in Arizona, California, Oregon, and Texas. Growers in the East and Midwest rely less on irrigation than in the West. For example, Michigan and New York growers irrigated only about 60- to 65-percent of their acreage in 1987. The weather-related perils most likely to result in indemnities under a cauliflower policy include excessive rain, excessive heat, excessive cold, wind, and drought. Growers generally report that they can manage insects by following prudent cultural practices. Various diseases, however, particularly rots, may be difficult to control and can cause substantial yield losses when exacerbated by extreme weather conditions. Ad hoc disaster data can be used to indicate which cauliflower- producing areas received large payments relative to their acreage. The National Agricultural Statistics Service (NASS) does not report cauliflower acreage in Washington and Wisconsin, although those states accounted for an average of 11 to 12 percent of U.S. ad hoc disaster payments made for cauliflower between 1988 and 1993. Similarly, NASS data indicate that Michigan accounted for a relatively large share of payments. In contrast, Arizona and California collected a small share of ad hoc payments relative to their acreage. Insurance issues addressed in this report include the setting of reference prices, estimating "appraised production," moral hazard, defining "areas" under the Non-insured Assistance Program, and the demand for insurance. Our research suggests that the demand for a cauliflower policy would likely be greatest in Texas, Washington, and in production areas in the East, Midwest, and South. Interest would likely be lowest in California, Arizona, and Oregon, where the majority of the crop is grown.