Rip Van Winkle would never sleep given the plethora of issues which daily impact California and Arizona agriculture. Water and economic bottom lines are sleep deprivation issues that can make or break farms and other agribusinesses.
California agricultural leaders gave awakening talks on these issues and others during the 2009 Western Plant Health Association (WPHA) annual meeting in Palm Desert, Calif.
Economist William Matthews painted a positive past and future economic outlook for California crop agriculture.
“The real value of California crop production has gone up steadily,” said Matthews, a post doctoral scholar at the University of California’s (UC) Agricultural Issues Center (AIC).
The AIC is based at the University of California, Davis campus in Davis, Calif. The group’s mission is providing broad-based and objective information on agricultural issues and their significance for California’s farm economy.
Crop production equals 65 percent to 70 percent of California’s agricultural economy, Matthews said. The majority percentage of California crop value comes from fruit, tree nuts and vegetables.
The AIC tracks the top 55 California exported farm products. The overall value of the 55 crops surpassed $10.3 billion in 2007. Many California-grown fresh fruits and vegetables are Canada and Mexico bound.
Mathews noted, “As long as we (California agriculture) can stay competitive and provide a top quality product at a reasonable price, farm exports should continue to grow.”
Grapes were the top California value crop in 2008 ($2.9 billion) followed by almonds ($2.3 billion), lettuce ($1.6 billion), strawberries ($1.5 billion), and tomatoes ($1.2 billion).
California, the No. 1 ag-producing state in the U.S. annually, accounts for 16 percent to 19 percent of all U.S. agricultural value. Texas is a distant second at 6 percent to 7 percent. About 70 percent of California’s agricultural bounty is consumed in the U.S.
For the U.S. as a whole, the farm gate value of agriculture was $350 billion from 1970-2008.
Timber represented about 10 percent of the total.
Matthews shared overall good news about crop health. Related expenses have increased, but at a slower rate than California crop values and net farm income.
“In a sense California producers are getting more value in crop health,” Matthews said. “Almond yields are dramatically increasing so growers are getting more ‘bang for the buck’ when it comes to inputs. Not so much though in grapes, but the grape differential may be based more on wine-grape quality rather than yields.”
Organic production and sales are growing rapidly. Matthews cited a recent USDA environmental impact statement which pegged growing organic food sales at $21 billion in 2008.
Organic is gaining support at the consumer level, Matthews said. From 2001-2005 certified organic vegetable crop acreage increased from about 3.5 percent to 4.8 percent.
“The take-away is organic crops are still a fairly small percentage of the crop acreage, but they’re gaining momentum. Some producers are taking notice.”
Organic agriculture is accruing more financial backing in federal farm programs; $105 million for organic research in the 2008 farm bill compared to $20 million in the 2002 bill.
“Organic agriculture has a place in the market and it looks like it will grow for a little bit,” Matthews said. “But the ability of organic agriculture to supply the food in this country and for exports will be constrained by the price differences.”
Prices for organic food, Matthews says, are about 53 percent higher on average than conventionally-grown crops.
A key to California agriculture’s past and future success is anchored in California educational institutions through agricultural research and other activities.
Chancellor Timothy White, UC Riverside (UCR), said, “Our ag roots at UC Riverside run very deep and very long.” A citrus experiment station – started 102 years ago – marked the university’s problem-solving dedication to the state’s growing citrus industry.
Today the land-grant institution develops new plant varieties resistant to invasive species, and focuses on integrated pest management, environmental factors, and other issues.
White shared the five future strategic areas for UCR’s College of Natural and Agricultural Sciences. The direction partially reflects the current economic squeeze including shortfalls in California state funding.
• The first is sustainable food systems including a new asparagus variety that produces higher yields and improved spear quality. Another is more drought resistant, flood-tolerant rice varieties for Bangladesh and India where farmers can lose up to 4 million tons annually due to unexpected flooding.
• A second focal point is endemic and evasive pest and disease management.
“Every 60 days a new and potentially damaging invasive species enters the California agriculture scene,” White said. Invasive species cause a $3 billion loss to the economy.
Invasive species are examined in UCR’s Insectary and Quarantine Facility; “one of the best in the world,” White said.
• A third area is sustainable natural ecosystems through the creation of an innovative plan to improve water quality for the Los Angeles basin including financial incentives for landowners and private citizens.
• A fourth UCR emphasis will tackle water quality, quantity, and security. White calls the Water Science and Policy Center a link between the science of water and engineering. A high priority will focus on water quality and techniques to cost effectively determine E. coli, salmonella, and animal particles in the U.S. food and water supply.
• The fifth directive deals with healthy families and communities.
Mario Santoyo delved into California’s ongoing natural and regulatory drought. Santoyo, technical adviser for the California Latino Water Coalition, treaded through the causes of California’s water shortfall and urged Gov. Arnold Schwarzenegger to help solve the dilemma.
“If we don’t get this (water) deal done this year while we still have Gov. Schwarzenegger in office, I’m not sure how much hope there is after that … The introduction of the ‘human impact’ has moved the Democrats in a way they’ve never been moved before. I have full faith it will happen.”
Steven Dominguez, Bank of the West senior vice president, Sacramento, Calif., reported the effects of the recession are not over yet.
“This storm isn’t over; we’re probably through the eye of the hurricane, but we still have a ways to go,” Dominguez said.
Agriculture has better weathered the economic recession due to the upswing in commodity prices in 2008. The recession has caused some commodity prices to plunge about 50 percent.
“Hopefully a lot of people listened to their bankers who said the higher prices might not last forever,” Dominguez said. “We might want to be squirrels and put some money away, get our debt load down, and be prepared because things might get worse.”
With staggering national unemployment rates, Dominguez says the actual current unemployment rate is 2 percent higher due to employee salary cuts, in addition to furloughs.
Renee Pinel, WHPA president and chief executive officer, discussed the organization’s 2009 priority issues. Among those is the perception by some that fertilizer is a contributor to climate change. Climate change is a highly-funded issue in Sacramento, Pinel said, with agencies looking for industries to blame for any and all climatic differences.
“As funded agencies look at climate change and begin to run out of industries (to blame) they will look at others,” Pinel said. “Our involvement right now is in fertilizer. For those on the crop protection side, don’t relax because they will eventually come after the crop protection industry as a venue for regulation. Regulators always want to regulate and they’ll be looking for new sources.”