This is another presentation from the July 2011 Agricultural Symposium sponsored by the Federal Reserve Bank of Kansas City. This one focuses upon agribusiness risk in California and was presented by Curt Covington, Bank of the West. California is the single most important agricultural state in this nation, and so I'm using a few statistics from Covington's presentation to remind us of that fact. ---KM
Snapshot of California Agriculture –“The Strengths”
A few additional points from the presentation:
Snapshot of California Agriculture –“The Strengths”
- $ 41 billion farm output in 2009. (CDFA) (Compared to Iowa $24B and Florida $7.6B).
- Top 5 U.S. counties in terms of crop revenue are all in California.
- Comprised of 37 crop segments representing 350 +/-identifiable crops.
- The State leads U.S. in the production of more than 70 different commodities.
- California is the exclusive U.S. producer (99% plus) of at least 12 commodities including, but not limited to: almonds, artichokes, dates, figs, olives, persimmons, pistachios, pomegranates, prunes, raisins and walnuts.
- The State produces 70% to 99% of 11 other crops, including table & wine grapes, peaches/plums/nectarines and fresh market citrus.
- Vast majority of crops are harvested by hand.
- California’s production of fruits, nuts, and vegetables accounted for more than 55% of the nation’s total production
A few additional points from the presentation:
- California receives far fewer subsidies as a proportion of its total production compared to most other states because its main crops are not eligible.
- An outdated and woefully inadequate water storage and distribution system for what is essentially an irrigated desert.
- The growing Dumbbell Risk: agriculture is becoming increasingly polarized in California. There are fewer farmers in the middle. There are 1) Cult Farmers: Small specialty farmers growing on contract for the likes of Whole Foods and Trader Joe’s and there are 2) Institutional Farmers: Grower/Packer/Shipper that alone cannot fill the needs of the chain stores. They form alliances among larger growers, and influence cultural and management practices through rigorous quality control guidelines.