AN ECONOMIC ASSESSMENT OF CELERY Executive Summary Celery is grown year-round in the United States, with California and Florida producing 90 percent of the total output in 1993. Other states reporting commercial celery production are Michigan, New York, Ohio, and Texas. The total value of the U.S. celery crop was $285 million in 1993. While U.S. celery production has risen about 15 percent between 1970 and 1993, domestic per capita use has been fairly steady. Exports have more than doubled in the past 20 years and accounted for about 14 percent of U.S. production in 1993. Most exports go to Canada. Imports account for only a small share of U.S. consumption, about 2 percent in 1993. Most U.S. celery is sold in the fresh market, but a portion is processed for use in prepared foods such as soups, juices, and convenience dinners. Celery must be harvested within a few days after reaching marketable sizes or its quality deteriorates. Growers schedule plantings so as to have a uniform quantity of celery reaching marketable size each week. The quantity available can vary substantially, however, depending upon the actual amount reaching maturity. Unexpected weather, especially high or low temperatures, can speedup or slowdown the rate at which celery matures. Celery prefers a long, cool growing season, especially cool nights, and an abundant uniform supply of moisture, usually provided by irrigation. The best monthly average growing temperature is 60-70 degrees, and the maximum monthly average is 70-75 degrees. Temperatures above 70-75 degrees, especially in the month preceding harvest, reduces vegetative growth and quality. Average temperatures below 40-55 degrees for several days when plants are young can induce premature seeding (bolting) later as the plants approach marketable size. Because of the temperature requirements, commercial celery production is limited during the winter to California, Florida, and south Texas. Most summer production occurs in the coastal valleys of California, but parts of Michigan, New York, and Ohio also grow commercial summer crops. Celery requires more frequent irrigation than most other vegetable crops because of its shallow root system. Most celery in California is furrow irrigated, although sprinkler irrigation may be used during early growth to insure that transplants become established. Sprinkler irrigation is avoided when the crop approaches market maturity because it increases the hazard of late blight disease. During the growing season, irrigation is applied at 1-3 week intervals, depending on the stage of plant development and the weather. The crop is irrigated more frequently as harvesttime approaches. The natural perils that are most likely to result in yield losses vary from area to area and depend partly on the time of year that the production and harvest activities are occurring. The greatest perils during the winter are freeze damage and excessive moisture. Other natural hazards in celery production are hail, insect and disease damage, and physiological disorders. Celery is a cold hardy plant and light frosts do little or no damage to the mature crop. Hard freezes, however, can cause severe economic losses. A freeze in Florida in late December 1989 damaged or destroyed much of the celery planted at the time. Celery shipments dropped sharply during January, but recovered to normal levels by the end of February. The freeze played a key role in Florida's average yield for the 1989/90 season dropping 13 percent from the year before. Freezing temperatures destroy some celery in Michigan almost every fall, but the economic loss is usually minimal because most of the crop is harvested by the time the first hard freeze occurs. Too much rain causes wet fields that can lead to crop losses from a build up of root-borne disease and physiological disorders. Excessive moisture can also result in poor quality due to over- maturity if wet fields prevent the grower from harvesting. The harvest window for rapidly growing celery extends for only 6-8 days, after which the plants become pithy and marketable yield declines. Contacts in virtually all celery production areas cited market risks as the celery grower's greatest peril. Growers, they report, can manage insect and disease risks by following prudent pest management practices and can generally deal with weather- related losses because usually only part of the season's crop is damaged by natural perils. Historical ad hoc disaster payments for celery provide an indication of high-loss areas and may indicate areas that would face relatively high risk under a FCIC celery policy. Disaster assistance payments for celery totalled $1.2 million between 1988 and 1993. Payments for celery peaked at $363,000 in 1989, and were over $150,000 in each of the years 1990, 1991, and 1993. Ad hoc payments made for celery accounted for far less than 1 percent of the total payments made for specialty crops over the 1988-93 period. Ad hoc disaster payments for celery were scattered over a geographically broad area. Fifteen states received payments in at least one of the 6 years. Michigan collected payments for celery losses in all years. New York collected payments in all years except 1989. California, with about 63 percent of harvested U.S. celery acreage, received only 5 percent of celery disaster payments. In contrast, Michigan, with about 8 percent of U.S. celery acreage, received 73 percent of celery disaster payments. A major issue with celery is the question of how to insure an extended-season crop for which yields, risks, perils, and expected market prices may differ for different parts of the season. Growers with extended seasons may be reluctant to purchase crop insurance which only guarantees season-average yields because the severity of losses during an interval within the season can be concealed by averaging over the season. One method for dealing with this extended-season problem would be to define distinct planting periods for intervals having similar yield expectations and production risks, and establish different premium rates for each period.