Transcript Daniel A. Sumner – Agriculture, Water and the California Economy

Agriculture, Water and the
California Economy
Urban Water Institute Annual Water Policy
Conference
San Diego Friday August 24, 2012
Daniel A. Sumner,
University of California Agricultural Issues Center
and Department of Agricultural and Resource
Economics, UC Davis
California has a
variety of climate and
land use zones
• Natural diversity allows
diverse agriculture to
thrive
• A relatively small share
of the total land mass
is suitable for highproductivity irrigated
crops
California agricultural land use
Cropland, pastured
3%
Other cropland
4%
Cropland,
harvested
30%
Pasture and
rangeland
52%
Other land
6%
Forest land
5%
Total agricultural area is 25.37 million acres
California 2010 cash receipts and acreage,
by commodity grouping
Cash receipts
Grains and
cotton
9%
Nursery/green
house
10%
Vegetables and
melons
19%
Tree nuts
14%
Acreage
Dairy
16%
Hay and forage
crops
19%
Other livestock
10%
Grains and
cotton
38%
Fruits
15%
Fruits
23%
Nursery/green
house
0.004%
Vegetables
and melons
9%
Tree nuts
13%
Crop revenue per acre
• Higher where fresh
vegetables, berries,
high-priced wine
grapes and fruits
predominate along the
central and southern
coast
• Lower where field
crops predominate in
the in the Sacramento
Valley and southern
deserts,
Top 20 California Commodities by Value, 2010
The top 20 commodities accounted for $30 billion of $37.5 billion in total sales.
California value of agricultural exports in 2010
Total CA agricultural export value: $14.7 billion
Value by Commodity Group
Wine
7%
Other
products and Animal
Products
mixtures
10%
13%
Vegetables
7%
Tree Nuts
27%
Value by Destination
Australia
Field Crops
1%
16%
India
2%
Rest of World
20%
Canada
23%
Taiwan, 2%
United Arab
Emirates, 3%
Fruits
20%
European
Union-27*
18%
South Korea
5%
Mexico
6%
Japan
9%
China / Hong
Kong
11%
California
precipitation map
California’s water system
is characterized by an
asynchrony of water
availability and demand
in space and time:
• Availability peaks in
winter in the sparsely
populated north
• Demand peaks in
summer in the Central
Valley (ag) and South
Coast (urban)
Agricultural cash receipts per acre-foot of applied water,
California, in year 2005 dollars
Year-2005 inflation adjusted dollars per acre foot applied
water
1,400
1,200
1,000
800
600
400
200
0
1960
1972
1980
1985
1992
2000
2005
Agricultural production value per acre-foot of applied
water, California, 2005
Real (2005) value of California crops and livestock, 1967-2010
25,000
20,000
Field Crops
Million dollars (2005=100)
All Other Crops
Livestock and Poultry
15,000
10,000
5,000
0
1967
1977
1987
1997
2007
2010
Index of California harvested acreage and real crop receipts
Indexed real prices of U.S. corn and wheat, 1866-2011
Index of real prices of California commodities, 1980-2011
Agricultural Production Share of GDP,
2007-2009 average
Country
United Kingdom
Germany
United States
Japan
California
France
Australia
Mexico
Brazil
China
India
Agriculture's
share of GDP
%
0.7
0.9
1.1
1.5
1.4
2.0
2.5
3.9
5.9
10.6
17.9
California agriculture and economy, 2009
Direct Effects
Industry
Jobs
Value
output
added
($ billion)
Agricultural production
and processing
Agricultural processing
Ag-support activities
Farming
Total California economy
Total Effects
Jobs
Value
added
(1,000) ($ billion) (1,000) ($ billion)
147.0
589.8
42.6 1,323.2
98.3
6.6
40.9
197.6
187.2
194.7
20.5
5.2
16.4
3,223.3 19,857.0
1,874.6
657.9
227.5
424.2
112.0
64.4
8.8
35.6
California agriculture is more than farming
and is liked to the rest of the economy
• About 600 thousand direct jobs in production and
processing and about 1.3 million including the
ripple effects.
• About $43 billion in direct GDP and about $112
billion including ripple effects.
• Overall agriculture accounts for about 6% of the
economic activity in California
• Farming itself is more than half of that with fruit
leading the way, but California farming has great
diversity
California farming and economy, 2009
Direct Effects
Total Effects
Industry
Jobs
Value
Jobs
Value
output
added
added
($ billion) (1,000) ($ billion) (1,000) ($ billion)
Farming
Grains and oilseeds
Vegetables and melons
Fruit
Tree nuts
Greenhouse and nursery
Other crops
Beef cattle
Dairy cattle and milk
Poultry and eggs
40.9
1.3
8.0
11.8
3.7
4.0
4.0
1.7
4.5
1.3
194.7
16.2
29.0
48.4
29.2
21.2
13.8
8.6
20.6
1.6
16.4
0.5
3.6
5.5
1.9
2.0
1.2
0.3
1.0
0.2
424.2
22.7
84.5
147.7
57.8
45.1
38.7
16.1
40.9
6.9
35.6
1.0
7.7
12.1
3.8
4.0
3.1
0.9
2.8
0.7
Central Valley agriculture and economy, 2009
Direct Effects
Industry
Jobs
Value
output
added
($ billion)
Agricultural production
and processing
Agricultural processing
Ag-support activities
Farming
Total Central Valley
economy
Total Effects
Jobs
Value
added
(1,000) ($ billion) (1,000) ($ billion)
65.5
293.3
19.3
636.7
46.6
38.0
3.7
23.4
68.7
114.0
108.8
7.0
2.8
9.4
252.8
137.6
259.0
21.6
4.7
19.5
395.5 2,889.9
224.1
Central Valley agriculture is large and
diverse comprising a significant share of
the whole economy
• About 22% of Central Valley jobs are tied to
agricultural production and processing, about 40%
linked to farm processing
• About 9% of GDP is tied directly to agriculture and
this grows to about 21% when we include the ripple
effects.
• Fruit, tree nuts, vegetables and dairy are the big
contributors to farm value added and employment.
Central Valley farming and economy, 2009
Direct Effects
Total Effects
Industry
Jobs
Value
Jobs
Value
output
added
added
($ billion) (1,000) ($ billion) (1,000) ($ billion)
Farming
Grains and oilseeds
Vegetables and melons
Fruit
Tree nuts
Greenhouse and nursery
Other crops
Beef cattle
Dairy cattle and milk
Poultry and eggs
23.4
1.2
3.1
8.1
3.5
0.7
1.0
1.0
3.9
0.5
108.8
14.5
7.9
26.8
28.1
2.3
3.4
5.2
17.4
0.5
9.4
0.5
1.4
3.7
1.8
0.4
0.3
0.1
0.8
0.1
259.0
21.3
32.1
105.3
60.2
6.5
10.3
10.0
35.4
2.7
19.5
0.9
2.9
8.0
3.6
0.7
0.7
0.5
2.1
0.3
Southern California agriculture and economy, 2009
Direct Effects
Industry
Jobs
output
($ billion)
Agricultural production
and processing
Agricultural processing
Ag-support activities
Farming
Total Southern California
economy
Value
added
Total Effects
Jobs Value
added
(1,000) ($ billion) (1,000) ($ billion)
49.6
157.6
13.1
458.6
41.8
39.0
1.1
9.2
79.1
30.8
44.5
8.4
0.9
3.6
297.9
39.6
111.4
30.4
1.7
9.2
1,793.1 11,550.5 1,064.6
Agriculture also contributes significantly to
the Southern California economy
• About 460 thousand jobs and $42 billion in GDP
derived from agricultural production and processing
when ripple effects are included
• Farming in Southern California accounts for about a
quarter of these totals in the region.
• Greenhouse and nursery, fruit and vegetables are
all major contributors.
Southern California farming and economy, 2009
Direct Effects
Total Effects
Industry
Jobs
Value Jobs
Value
output
added
added
($ billion) (1,000) ($ billion) (1,000) ($ billion)
Farming
Vegetables and melons
Fruit
Greenhouse and nursery
Other crops
Beef cattle
Dairy cattle and milk
Poultry and eggs
9.2
2.1
1.6
2.1
2.1
0.4
0.4
0.3
44.5
9.6
9.8
12.2
6.5
1.5
1.9
0.4
3.6
1.0
0.7
1.1
0.6
0.1
0.1
0.0
111.4
28.2
26.3
29.1
23.1
3.8
4.5
1.6
9.2
2.4
1.9
2.5
1.9
0.3
0.3
0.2
Thank you, Dan Sumner
aic.ucdavis.edu