agriculture, water and the california economy urban water institute annual water policy conference...

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 high-productivity irrigated crops

Cropland, pastured3% Other cropland

4%

Cropland, harvested

30%

Forest land5%

Other land6%

Pasture and rangeland

52%

Total agricultural area is 25.37 million acres

California agricultural land use

California 2010 cash receipts and acreage, by commodity grouping

Cash receipts Acreage

Dairy16%

Other livestock10%

Fruits23%Tree nuts

14%

Vegetables and melons

19%

Nursery/greenhouse10%

Grains and cotton

9%

Hay and forage crops19%

Fruits15%

Tree nuts13%Vegetables

and melons9%

Nursery/greenhouse

0.004%

Grains and cotton

38%

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

Value by Commodity Group Value by Destination

Animal Products

10%

Field Crops 16%

Fruits20%Tree Nuts

27%

Vegetables7%

Wine7%

Other products and

mixtures13%

Total CA agricultural export value: $14.7 billion

Canada23%

European Union-27*

18%

China / Hong Kong11%

Japan9%

Mexico6%

South Korea5%

United Arab Emirates, 3%

Taiwan, 2%

India2%

Australia1%

Rest of World 20%

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

0

200

400

600

800

1,000

1,200

1,400

1960 1972 1980 1985 1992 2000 2005

Year

-200

5 in

flatio

n ad

just

ed d

olla

rs p

er a

cre

foot

app

lied

wat

er

Agricultural production value per acre-foot of applied water, California, 2005

Real (2005) value of California crops and livestock, 1967-2010

0

5,000

10,000

15,000

20,000

25,000

1967 1977 1987 1997 2007 2010

Mill

ion

dolla

rs (

2005

=100

)

Field Crops

All Other Crops

Livestock and Poultry

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 Agriculture's share of GDP

%United Kingdom 0.7Germany 0.9United States 1.1Japan 1.5California 1.4France 2.0Australia 2.5Mexico 3.9Brazil 5.9China 10.6India 17.9

California agriculture and economy, 2009

Industry Jobs Value Jobs Valueoutput added added

($ billion) (1,000) ($ billion) (1,000) ($ billion)Agricultural production and processing

Agricultural processing 98.3 197.6 20.5 657.9 64.4Ag-support activities 6.6 187.2 5.2 227.5 8.8Farming 40.9 194.7 16.4 424.2 35.6

Direct Effects Total Effects

147.0 589.8 42.6 1,323.2 112.0

Total California economy 3,223.3 19,857.0 1,874.6

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


($ billion) (1,000) ($ billion) (1,000) ($ billion)

Farming 40.9 194.7 16.4 424.2 35.6Grains and oilseeds 1.3 16.2 0.5 22.7 1.0Vegetables and melons 8.0 29.0 3.6 84.5 7.7Fruit 11.8 48.4 5.5 147.7 12.1Tree nuts 3.7 29.2 1.9 57.8 3.8Greenhouse and nursery 4.0 21.2 2.0 45.1 4.0Other crops 4.0 13.8 1.2 38.7 3.1Beef cattle 1.7 8.6 0.3 16.1 0.9Dairy cattle and milk 4.5 20.6 1.0 40.9 2.8Poultry and eggs 1.3 1.6 0.2 6.9 0.7


Central Valley agriculture and economy, 2009





65.5 293.3 19.3 636.7 46.6

Total Central Valley economy

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



Farming 23.4 108.8 9.4 259.0 19.5Grains and oilseeds 1.2 14.5 0.5 21.3 0.9Vegetables and melons 3.1 7.9 1.4 32.1 2.9Fruit 8.1 26.8 3.7 105.3 8.0Tree nuts 3.5 28.1 1.8 60.2 3.6Greenhouse and nursery 0.7 2.3 0.4 6.5 0.7Other crops 1.0 3.4 0.3 10.3 0.7Beef cattle 1.0 5.2 0.1 10.0 0.5Dairy cattle and milk 3.9 17.4 0.8 35.4 2.1Poultry and eggs 0.5 0.5 0.1 2.7 0.3

Total EffectsDirect Effects

Southern California agriculture and economy, 2009





Total Southern California economy

1,793.1 11,550.5 1,064.6

49.6 157.6 13.1 458.6 41.8

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



Farming 9.2 44.5 3.6 111.4 9.2Vegetables and melons 2.1 9.6 1.0 28.2 2.4Fruit 1.6 9.8 0.7 26.3 1.9Greenhouse and nursery 2.1 12.2 1.1 29.1 2.5Other crops 2.1 6.5 0.6 23.1 1.9Beef cattle 0.4 1.5 0.1 3.8 0.3Dairy cattle and milk 0.4 1.9 0.1 4.5 0.3Poultry and eggs 0.3 0.4 0.0 1.6 0.2


Thank you, Dan Sumneraic.ucdavis.edu

agriculture, water and the california economy urban water institute annual water policy conference...

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