AIC Issues Brief

No. 8, December 1998


Daniel A. Sumner, Heather Benson, David Hart and Nick Kuminoff*

The crucial role of exports in marketing California’s crop and livestock commodities is portrayed more clearly by new data on agricultural shipments to foreign markets. The Agricultural Issues Center, in conjunction with the California Department of Food and Agriculture, has provided a more solid statistical basis for conclusions about the state’s agricultural exports. Our results show that:

  • California’s agricultural exports to foreign markets were worth nearly $7 billion in 1997, up almost $500 million from 1995 but virtually unchanged from 1996.
  • Cotton and almonds were the top exported commodities in all three years.
  • Japan was the single largest foreign market.
  • Exports accounted for between 15% and 50% of California’s leading fruit, nut and vegetable crops, and more than 80% of its cotton.

Although reliable data on overall US agricultural exports are available from federal sources, comparable information is not collected on a state-by-state basis. Data on individual state exports must be interpreted with care, since multi-state or national markets are what matter most. Still, state export data can be important for analyzing California’s potential markets, for helping marketing organizations and government agencies develop strategies, and for understanding foreign economic trends that may affect domestic markets.
In the past, attempts to determine detailed agricultural exports by state relied primarily on (1) multiplying national export data by the state’s share of national production, which yields only rough estimates and (2) shipment data collected at ports, which do not indicate the actual state of origin-and which consistently overestimate California farm exports.

Different commodities, different procedures

The new AIC data focus primarily on 50 California commodities which together account for more than 90% of the state’s farm production (Table 1). We developed a specific procedure for each of those commodities, using a variety of data sources and combining formal operations and informal adjustments depending on the commodity and industry. Industry sources were helpful, either providing explicit export data or guiding us to other sources.
Where California produces more than 90% of a crop’s nationwide output-for example, almonds and walnuts-we used US Department of Agriculture national export figures, with slight adjustments by commodity. For certain other commodities, we used port data in conjunction with Canadian import data. Canada, which is California’s second largest export market, tracks US imports by state of origin. In other cases, we used California’s share of national production in conjunction with monthly national export data, focusing when appropriate on specific time periods, or on specific types or varieties of commodities.
Special characteristics of California crops provided useful guidelines. For example, California produces most navel oranges sold to the fresh market, while Florida specializes in juice. California cotton has longer staple length and California rice tends to be short and medium grain rather than long grain-thus distinguishing these crops from output of the southern states. In these cases, much useful information was provided by major cooperatives in California.
The new procedures result in a specific dollar amount for the yearly export values of each of the 50 crops. Those figures remain approximations, although much more realistic than previous figures.
The estimated export values are for agricultural commodities produced on California farms and ranches, including values added through processing and marketing. They do not include commodities that are produced in other states but processed in California or transshipped through the state. Hence, these data do not necessarily reflect the complete role of exports in California’s agricultural economy.
Next year, the AIC and CDFA will work with our counterparts in other states to extend our approach to them. Perhaps in a few years we will have a consistent method for the reporting of agricultural export data by most major agricultural states.

Agricultural exports

Table 1 shows export values of the 50 crops during 1995-97. In all three years, cotton and almonds were by far the largest exports.
The sizable category of agricultural exports in Table 1 titled “Total Other Products” is composed of:

  1. Highly processed products, such as mixtures (fruits, nuts, vegetables) and other processed foods (for example, candy bars) that are difficult to attribute to a specific commodity.
  2. Animal and plant products marketed in such small quantities that they are not included in the list of 50 leading commodities.

Table 1, in addition to showing that California agricultural exports totalled just under $7 billion in both 1996 and 1997, also indicates that:

  • Fruit and nut crops account for more than half of the total.
  • Wine jumped from sixth to third-ranked export during the three years, with a 79% increase of more than $170 million
  • Other top-ranked commodities with more than 25% export growth were table grapes, milk and cream, and hay. Commodities farther down the list with more than 25% growth in exports were pistachios, peaches/nectarines, plums, carrots, garlic, grape juice, fresh tomatoes, turkey and mushrooms.
  • Commodities with reductions in export value of more than 25% during 1995-97 were cauliflower, grapefruit, wheat, cottonseed oil, kiwi, figs and avocadoes. Cattle and calf exports shrank 22%.

The value of agricultural exports depends on many variables that can change annually, such as world supply and demand, domestic production, price and quality, and currency exchange rates. Thus, even substantial percentage changes in yearly export value may not necessarily reflect lasting market trends.

Farm quantities and values

As part of our analysis, we used standard conversion ratios to estimate the on-farm quantities and values associated with exported commodities. For example, we estimated the farm quantity of exported apples by converting export quantities of dried apples and apple juice to a fresh apple basis, and then adding fresh apple exports. The farm value is the farm-quantity exported multiplied by the statewide average annual price as reported by the California National Agricultural Statistics Service (CA-NASS).
Comparing the on-farm quantity destined for export to total production indicates the importance of export markets to a particular industry. Table 2 shows the exported percentage of the top 15 California crops in 1997. More than 80% of the cotton crop and more than half of the almonds were exported. Less than 10% of California’s output of animal products, including dairy products, beef, chicken, eggs and turkey, went to foreign markets-but these exports were still valued at almost $500 million.

Where ag exports go

Figure 1 shows the foreign destinations of California’s top 30 export commodities.
Asian countries comprise six of California’s top 10 export markets. Some, such as Japan, Taiwan and Hong Kong, import many commodities, particularly fruits, nuts and vegetables. Others such as China and Indonesia import large quantities of a single California commodity-cotton.
With imports of more than $1.3 billion in 1997, Japan was the top foreign market, importing many California agricultural products, including cotton, beef, hay, nuts, rice and various fruits and vegetables. In 1997, Japan imported at least 5% of 16 of the top 20 California export commodities. We know from anecdotal information that Japan is also a major destination for highly processed agricultural products not attributable to specific commodities.
Canada imports mainly fresh fruits and vegetables from California with a 1997 total of $964 million Canada accounted for more than $2 million in sales of each of 25 different fruits, nuts and vegetables.
Countries in the European Union import from California mostly processed horticultural products such as wine, nuts and dried fruit. In 1997 Germany and the United Kingdom each imported approximately $200 million in wine and almonds.
Some California export commodities go mostly to a single market while others have multiple destinations. Japan imports more than half of the state’s hay, beef, rice and lemon exports. More than half of California’s exported lettuce, strawberries, peaches and broccoli arrive in Canada. Cotton, almond, dairy, walnut and prune exports are considerably less concentrated, with at least six countries each receiving at least 5% of California exports.

Firmer information base

Besides providing an overall sharper focus on California’s agricultural exports, our procedures for gathering and evaluating data have:

  • Corrected some commodity totals that previously were misleading-for example, the inflated picture of California beef exports.
  • Provided data on a number of important commodities such as wine that had not been specified in earlier reports.
  • More precisely assessed the actual on-farm value of California agricultural exports.
  • Clarified both the meaning of export data and what they may reasonably be used for.

In an age of global markets and advanced information technology, it seems likely that more credible statistics on California’s agricultural exports will generate benefits in numerous, and possibly unexpected, places.

Table 1: California Agricultural Commodity Export Value, 1995-97 (Ranked in order of 1997 Value)

Table 2: 1997 Share of Production Exported (in order of 1997 export value)

Figure 1: Top 30 1997 Export Markets for California Agricultural Commodities (figures in million $)