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Are California’s Agricultural Exports Drying Up?

Are California’s Agricultural Exports Drying Up?

  • By Maxwell Gove
  • · June 2, 2015

Amid a crippling drought in the Golden State, Californian farmers have faced tough criticism in the wake of their exemption from Governor Jerry Brown’s water usage restrictions. Their opponents claim Californian farms have been using an alarming amount of the state’s diminishing water supplies to support crops that mostly end up overseas.

 

Looking at the data, it’s clear farmers were indeed expanding their export activities up until 2012/2013. But, after several years of growth, declines in 2014 and slow performance during the first two months of 2015 suggested that the jig could be up for farmers. A rapid rebound in March, however, makes things a little more unclear. The rise could be related to port disruptions in Los Angeles and Long Beach or some other production anomaly. Or it could, unfortunately, signal that exports–and therefore, water usage– are indeed increasing at one of California’s most critical moments.

 

In particular, almond growers have come under fire for their expanding production during a time of crisis. Some, however, have suggested that the lack of water is beginning to hit farmers growing almonds, and will likely hit hard. To get a better idea as to what’s been going on, we decided to look into our Trendspotting data for US exports of almonds (under HTS chapters 080211 and 080212).

 

Due to their cyclical nature, agricultural exports can be a bit tricky to analyze. Here’s a chart of total KGs of almonds exported from the US since 2010.

 

US Exports of Almonds (total KGs, by month)

almond_exports

This past season, exports followed their usual pattern of dipping after October (when the trees become dormant), but dropped far lower than usual. In particular, exports in January and February were 15% below their value for the same period the previous year. Broadening our scope to yearly totals in order to avoid off-season variations, we still see that exports for the year 2014 fell from previous years, 7.1% below 2013 and 9.35% below their 2012 peak. Despite a slow start in January and February, exports surged to just under 70 million kilograms — the highest value ever recorded in the month of March. This could, however, simply be an outflux of nuts leaving the United States as port operations returned to normal.

 

Almond farmers aren’t the only ones experiencing backlash however. Similar claims have also been made against producers of crops sold to Asian farmers as animal feed. Approximately 3.3 million tons — worth close to $1 billion — left the US for markets in China, Japan, and South Korea in 2014.

 

Alfalfa farmers have been especially vilified. After growing nearly 35% between 2010 and 2013, alfalfa exports fell by just over 14% last year. Trade got off to a slow start in 2015; totals in January and February were among the lowest since Panjiva began reporting data in 2009. Like almonds, though, the trend quickly reversed, and the numbers for March were among the highest we’ve seen (though still a decline from the same month in 2014 and 2013).

 

US Exports of Alfalfa (metric tons, by month)

alfalfa_exports

So what’s the verdict here? Unfortunately, it may be too early to come to one. There’s definitely a negative trend here, but the more recent data suggests that may have been only a result of the Californian port strikes. So, one of two things is happening. Either exports are drying up, which is bad news for farmers, or exports are indeed increasing, in which case the state will soon dry up instead. Either way, California loses.

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