International Ag issues – Trends in the Local Food Market

Presentation For The

NSAC Far West Chapter Annual Meeting May 23, 2013

William Matthews University of California

Agricultural Issues Center

UC Agricultural Issues Center • AIC Mission: provide broadly-based and

objective information on agricultural issues and their significance for California’s ag economy

• Priorities: International trade, globalization, ag policy, ag. productivity and technology, ag. labor, ag. land issues, commodity markets and agribusiness

• UC based center for 30 years

• http://aic.ucdavis.edu/

Today’s Discussion

• Trends in the local food movement

• Role of California agriculture in global food supply

Number of Articles that Discuss “Local Food Movement” in Text, 2001-2012

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100

200

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400

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Source: NewsBank

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Number of Farmers Markets Listed by State, 2012

Source: USDA AMS

Number of Farmers Markets

Arizona 82 California 827 Hawaii 88 Nevada 38 Utah 37 Total Member States 1,072 Total USA 7,860

Number of Farmers’ Markets Listed by State for 2012

Source: USDA AMS

Direct-to-Consumer Food Marketing* by Region,1997-2007

Source: USDA AMS * Direct marketing is defined as agricultural products sold directly to individuals for human consumption in the U.S. Census of Agriculture, 2007.

Top 10 States, Direct-to-Consumer Food Marketing as Share of Total Agricultural Sales, 2007

Source: USDA AMS

Agricultural Economy of Top 10 Direct-to-Consumer Marketing States, 2012

• Total Cash Receipts = $9.79 billion • Total US Cash Receipts = $390.8 billion

• Share of US Agriculture Production Value = 2.5%

Direct-to-Consumer Food Marketing Sales For 2007

Source: USDA AMS

Direct-to-Consumer Market Value as Share of California Agriculture

2007 Value of Direct-To-Consumer Sales in California $163 million

2007 Value of California Agriculture Cash Receipts $37 billion

Share .004

2012 Value of Direct-To-Consumer Sales in California* $292 million

2012 Value of California Agriculture Cash Receipts $44 billion

Share .006

* Assumes growth rate for direct-to-market sales is equal to growth rate in farmers’ markets in US.

California Agriculture

• In 2012 – California Agriculture Production = $44.1 billion.

– California agriculture =11% of total US value in

agriculture production.

– Next closest state is Iowa at about $32 billion or 8.2% of US Ag. production value.

Source: USDA-Economic Research Service

$0$5

$10$15$20$25$30$35$40$45$50

1960

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Tota

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$bi

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Annual Value of California

Agricultural Production 1960-2012

Top Agricultural Producing States In U.S. 2000-2011

Source: USDA-Economic Research Service

4%

6%

8%

10%

12%

14%

16%

2000

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Shar

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California TexasIowa Nebraska

California’s Agricultural Advantage

Mild Climate Fertile Soils Adequate Precipitation (Rain/Snow)

Source: State of California

Source: California Department of Food and Agriculture

Commodities Produced in California

Crops for which California is the Sole Producer in the US

• Almonds • Pistachios • Walnuts • Figs • Kiwi • Nectarines • Olives

• Clingstone Peaches • Plums • Prunes • Raisins • Dates • Artichokes

Source: USDA-Economic Research Service

Other Crops for Which CA is a Major Producer (70-98%)

• Apricots • Grapes • Lemons • Strawberries • Cotton (Pima)

• Lettuce • Proc. Tomatoes • Spinach • Garlic • Celery • Cauliflower • Broccoli • Avocadoes

Source: USDA-ERS

Fruit and nuts 32%

Vegetable 15% Dairy

16%

Meat and Poultry

10%

Greenhouse Nursery

8%

Field Crops 17%

Other Crops 2%

Share of 2011 California Agricultural Value by Commodity Group

Commodities 2011 Farm Value

(in $billions)

Dairy Products $7.6

Almonds $3.8

Grapes $3.8

Beef $2.5

Strawberries $1.9

Top 5 Commodities by Value for 2011

Annual Value of Top 5 Commodities

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Valu

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AlmondsGrapesBeefStrawberries

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Top-10 Commodities

Principal Commodities

All Agricultural Exports

California Export Values, 1995-2011

Rank Commodity ($mill) % Exported

1 Almonds 2,828 64

2 Dairy and products 1,420 24

3 Wine 1,226 291

4 Walnuts 1,060 63

5 Rice 877 52

Total Agriculture Exports 16,873 25.0

Top-5 California Exports, 2011

Source: Agricultural Issues Center

Animal Products

12%

Field Crops 17%

Fruits 23%

Tree Nuts 32%

Vegetables 7%

Wine 8%

Flowers 1%

2011 California Exports by Category

Canada 18%

European Union-27*

14%

China / Hong Kong 10%

Japan 8%

Mexico 5%

South Korea 5%

India 2%

United Arab Emirates

2%

Turkey 2%

Taiwan 2%

Rest of World 32%

Top Ten Export Destinations for 2011 California Exports

California Agriculture Exports to Asia/Pacific Region

• In 2011 California exports went to 39 different Asia/Pacific countries.

• Total value of exports to region in 2011 was $5.74 billion, or 34% of total exports.

Asia/Pacific Region Exports by Destination Country for 2011

Country 2011 Value

($ million) Share of Total China/Hong Kong 1,722 30% Japan 1,415 25% Korea 781 14% India 360 6% Taiwan 249 4% Australia 248 4% Vietnam 197 3% Indonesia 153 3% Malaysia 148 3% Philippines 132 2% Rest of Region 340 6% Total for Region 5,746 100%

Asia/Pacific Region Exports by Commodity for 2011

Commodity 2011 Value

($ million) Share of Total Almonds 1,067 19% Dairy 603 11% Oranges 482 8% Rice 473 8% Walnuts 400 7% Table Grapes 366 6% Wine 363 6% Beef 349 6% Pistachios 339 6% Cotton 305 5% Other Exports 1,000 17% Total Exports 5,746 100%

2011 California Exports to Asia/Pacific Region by

Category

Animal Products

17%

Field Crops and Flowers

18%

Fruits 25%

Tree Nuts 31%

Vegetables 3%

Wine 6%

US-Asia/Pacific Free Trade Agreements

• US-Australia: Entered into force on January 1, 2005. – U.S. goods exports were $18.9 billion in 2009, up 33

percent from 2004 (US Trade Representative).

• US-Korea: Entered into force on March 15, 2012.

• Trans Pacific Partnership

Australia as Export Destination for California Agriculture

• Australia is consistently a top-15 destination country for California agriculture products.

• In 2011 Australia purchased $248 million in

agricultural exports from California.

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Average Value of California Exports to Australia

Korea as Export Destination for California Agriculture

• Korea was the #6 destination country for California agriculture products in 2011.

• Korea purchased $751 million in agriculture products from California in 2011.

Base tariffs in Korea for selected products

Access improvement by general market access category

Comparison of US Exports to Korea of Commodities that went to 0% Tariff at Start of FTA

Commodities 2011 2012 Percent Change

2011 - 2012 $1,000

Beef- Hides 286,933 312,621 9.00% Almonds 84,314 130,009 54.20% Cherries 1,842 76,382 4047.30% Tomatoes, Processed 12,761 16,215 27.10% Wine 10,511 15,550 47.90% Raisins 10,006 12,199 21.90%

Total 406,367 562,976 38.54%

Trans Pacific Partnership

• Current Trans-Pacific Partnership Agreement (TPSEP) is a free trade agreement among Brunei, Chile, New Zealand, and Singapore (begun in 2005).

• Since 2010, negotiations to significantly expand the TPP to include Australia, Canada, Malaysia, Mexico, Peru, the United States, Vietnam and Japan have taken place. – Focus on Japan

Japan as Export Destination for California Agriculture

• Total California Ag Exports to Japan in 2011 Valued $1.45 billion.

• Japan was the third highest destination

country for California agricultural exports in 2011.

2011 California Agricultural Exports to Japan

Commodity 2011 Value

($ million) Share of Total Rice 292 21% Almonds 135 10% Beef 111 8% Hay 106 7% Wine 100 7% Oranges 93 7% Dairy 86 6% Walnuts 78 6% Raisins 49 3% Lemons 47 3% Other Exports 318 22% Total Exports 1,415 100%

Conclusions • The eat local movement is a growing trend

but remains a small part of overall agricultural production and value.

• California’s strengths are producing and processing large numbers of different commodities efficiently and competing in the global market. This is will continue.

Thank You