Toward an Outlook for California Agriculture Relevant to GHG Emissions Mitigation. April 30, Daniel A. Sumner

Similar documents
California Agriculture and Global Challenges: Resources Prices and Prospects 2012 California Ag Summit January 27, 2012

Issues Driving the Outlook for Specialty Crops December 3, 2012

California Agriculture 2001: Trends and Issues

Commodity Market Outlook: Corn, Forage, Wheat & Cattle

Cattle and Beef Markets: Short and Long Run Challenges and Opportunities

Agricultural Commodity Outlook: Grain, Forage & Cattle Markets

Agricultural Commodity Outlook: Grain, Forage & Cattle Markets

Utah Ag Bankers Conference Alfalfa and Dairy Outlook

Outlook for the U.S. Livestock and Poultry Sectors in 2011

Cattle Market Situation and Outlook: 2015 and Beyond

Agriculture Outlook. Rich Pottorff Doane Advisory Services

Outlook for Hog Profits in 2012

Agricultural Outlook: Rebalancing U.S. Agriculture

Profile and Economic Impacts of Agriculture and Natural Resource Industries in the Suwannee River Basin Counties of Florida

AG OUTLOOK 2019: GROWING LOCALLY, SELLING GLOBALLY

Page 1. USDA s Mandatory Farm Programs CBO s January 2019 Baseline

Outlook for Livestock and Poultry. Michael Jewison World Agricultural Outlook Board, USDA

OUTLOOK FOR US AGRICULTURE. Rob Johansson Acting Chief Economist 19 February 2015

Livestock, Poultry, and Dairy: Situation and Outlook

Presentation from the USDA Agricultural Outlook Forum 2017

Beef Outlook. Regional Dealer Event. February 9, Dr. Scott Brown Agricultural Markets and Policy Division of Applied Social Sciences

Macro and Agricultural Economic Outlook FCL 2017 Annual Meeting. Tanner Ehmke, Manager Knowledge Exchange Division

Cattle Market Outlook & Important Profit Factors for Cattle Producers

Outlook for U.S. Retail Food Prices and Inflation in 2009

Outlook for the U.S. Livestock and Poultry Sectors in 2012 Presented By Shayle D. Shagam World Agricultural Outlook Board, USDA

Commodity Market Outlook: Corn, Forage, Wheat & Cattle

10/18/2015. Outline. Commodity Outlook

2018 Farm Bill Update and Agricultural Outlook

Livestock and Dairy Market Outlook

Beef Cattle Market Update

Photo courtesy of Judy Jacobson, Watford City. Cattle Situation and Outlook Ag Lenders Conference

October 14, University of Missouri Extension

2017/18 Corn Outlook

Farm Sector Income & Finances 2016 Outlook. By Ryan Kuhns and Kevin Patrick March 16, 2016

USDA Grains & Oilseeds Outlook

MARKETING CHANNEL MARKETING CHANNEL MARKETING CHANNEL. Marketing Margin: Marketing Margin: Value added by the food and fiber system, 2001

Simply Put, Just too Much! Copyright AgResource Company. All All Rights Reserved.

Soybean, Corn, & Wheat Outlook Middle Tennessee Grain Conference

Soybean, Corn, & Wheat Outlook Middle Tennessee Grain Conference

Global Outlook for Agriculture Trend versus Cycle

Cattle Situation and Outlook

FAPRI agricultural commodity outlook

State of the Ag Economy

Feeds, Price and Vola0lity

Livestock Market Trends

Have You Ever Heard the Phrase

An Agricultural Update

Cattle & Beef Outlook

Blue Diamond Growers Quality Management ASFMRA in California Almonds Outlook 2018 Conference

Agriculture and the Economy: A View from the Chicago Fed

Trade Winds in Agriculture

Potash Outlook. Kevin Stone Natural Resources Canada. TFI Fertilizer Outlook and Technology Conference Fort Lauderdale, Florida November 16, 2016

What Lies Beyond The Horizon For Farm Incomes:

BUYERS VS SUPPLIERS: CHANGING PREFERENCES OF ONE OF THE MAIN GRAIN IMPORTERS

Dairy Outlook and Issues Facing The Dairy Industry

Cattle & Beef Outlook

Where s The Beef??? Ruminating On The Cattle Cycle. Gary Brester

U.S. Global Position (Imports/Exports) Dermot Hayes Iowa State University

Current%Market%Situa1on%

2018 Soybean, Corn, & Wheat Outlook KY and TN Grain Conference

Swine Market Outlook

World Vegetable Oil Themes in 2018/19

OKLAHOMA MARKET REPORT

Beef & Cattle Market Outlook. Glynn Tonsor Dept. of Agricultural Economics Kansas State University

Land Values and Chinese Agriculture

2018 Cotton Market Outlook: At What Price Should I Get Back Into Cotton?

Iowa s Ag Economic Outlook in the

A Primer on Factors Affecting Farmland Values

2018(?) FARM BILL DISCUSSION

colorado.edu/business/brd

Economic Analysis of Farmland Market: An Introduction

OKLAHOMA MARKET REPORT

OKLAHOMA MARKET REPORT

BMO Capital Markets 2014 Farm to Market Conference New York, New York. May 21, 2014

OKLAHOMA MARKET REPORT

OKLAHOMA MARKET REPORT

Economics of Spice Pepper Production in Oklahoma 1

2005 Dairy Products Utilization & Production Trends

OKLAHOMA MARKET REPORT

Economic Outlook March Economic Policy Division

OKLAHOMA MARKET REPORT

Hog Market Outlook & Pricing Methods

OUTLOOK FOR GLOBAL ECONOMIC GROWTH AND TRADE IMPACTING GRAIN MARKETS

Iowa Land Values. Wendong Zhang Assistant Professor of Economics and Extension Economist

OKLAHOMA MARKET REPORT

North Carolina Apple School 2018

OKLAHOMA MARKET REPORT

National Poll Dorset Conference Alexandra Gartmann, CEO and Managing Director Rural Bank and Rural Finance

FARM POLICY IN THE DOWNTURN AND BEYOND

OKLAHOMA MARKET REPORT

Farm Bill Economics and Expectations

Weather, Supply and the Turkish Flour Miller - The Outlook for World Wheat Prices 2018/19

Table 3A Major Destinations for California Agricultural Exports, 2012 and ,2 in alphabetical order

OKLAHOMA MARKET REPORT

J.P. Morgan New York Non-Deal Road Show. New York, New York

Agricultural Trade Office The U.S. Embassy, Seoul

OKLAHOMA MARKET REPORT

OKLAHOMA MARKET REPORT

OKLAHOMA MARKET REPORT

Economic Analysis of Farmland Market: An Introduction

Transcription:

Toward an Outlook for California Agriculture Relevant to GHG Emissions Mitigation April 30, 2013 Daniel A. Sumner University of California Agricultural Issues Center and UC Davis, Agricultural and Resource Economics

First steps to developing a useful set of projections for California agriculture to 2030 Choice of crops and issues determined by the greenhouse gas emissions and potential for mitigation in different parts of California farming. Commodity production is constrained by scarce water, land and other resources Changes in resource availability and prices, commodity prices and shifting costs due to shift in input prices, technologies and resource supplies all determine what is produced, using which practices and how much of the available resources. We will consider first recent trends, current situation and national projections. Along the way, we will evaluate where current and expected drivers are steering California agriculture.

Global markets for farm commodities have exhibited strong long-term demand trends and have several drivers Trends toward larger quantities from growth in demand and growth in supply are well established and expected to continue. Demand for farm commodities has been growing strongly for centuries because of populations and per capita income growth. Continued demand growth derives primarily from increases in income in rapidly growing regions with large populations. At high incomes, income growth matters little to demand for most for food commodities, but animal protein and fruits, nuts and vegetables continues to have significant income responses at higher incomes. Uses that substitute for nonfarm commodities (energy) expand demand and may place a (variable) floor under farm prices as that demand expands more than food demand. Strong demand growth is mostly a good news story. It means that incomes of the world s poor will continue to expand at rapid rates.

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 $ trillions Real Gross Domestic Product (GDP), with projections $100 $90 $80 $70 $60 World Developed economies less USA United States Developing economies $50 $40 $30 $20 $10 $0

Global supply growth derives mainly from: Opening new land area for crop and livestock production, Additions to availability of irrigation water Increased availability (lower prices) of inputs such as improved seed, fertilizer, pesticides and equipment Improvements in management on farms as weaker farmers leave and better farmers manage larger farms Improved handling and reduced losses off the farm New and newly adapted and adopted technology and practices All of these continue to contribute, but, as usual, concerns arise about how much more can be expected Particular concern about R&D contributions and willingness to allow adoption of new technologies and allow development of additional resources.

Figure 1. Acreage of California Crops, 2010-2012 (average total crop acres = 7,348 thousand acres) Lettuce Proc. Tomatoes Other Vegetables Hay Other Tree Nuts Almonds Corn Other Fruits Rice Citrus Wheat Grapes Other Field Crops

Figure 2. Value of California Crops, 2010-2012 (average total crop value = $ 26 Billion) Cotton Other Field Crops Grapes Hay Strawberries Other Tree Nuts Citrus Almonds Other Fruits Other Vegetables Lettuce, All Proc. Tomatoes

Figure 3. Value of California Livestock, Poultry and Dairy (2009-2011 average total livestock and dairy value = $10 Billion) Turkeys Other Livestock Eggs Chickens Cattle and Calves Milk and Cream

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Acres (millions) Annual Acreage of California Tree & Vine and Field Crops plus Processing Tomatoes, 1980-2012 6 5 Field Crops Tree & Vine 4 3 2 1 0

Price Index (100=2002) 260 235 210 185 160 California Crops Price Index, 1998-2012 Corn, Grain Proc. Tomatoes Alfalfa Wheat 135 110 85 60 1998 2000 2002 2004 2006 2008 2010 2012

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Milk (thousand pounds) Head (thousands) Number of California Milk Cows and Milk Production per Cow, 1980-2012 24 23 22 21 20 19 18 17 16 15 Production per Cow Milk Cows and Heifers Calved 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Acres (thousands) Annual Acreage of California Alfalfa Hay and Corn Silage, 1980-2012 1,200 1,000 800 600 Alfalfa Hay Corn, Silage 400 200 0

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Production (million tons) Annual Production of Alfalfa Hay and Corn Silage, 1980-2012 14.0 12.0 10.0 Alfalfa Hay Corn Silage 8.0 6.0 4.0 2.0 0.0

Actual and Prospective Planted acres of Grains and Other Field Crops in California Crops 2013 % Change % Change 1,000 acres 2011 to 2012 2012 to 2013 Corn* 560-3.2-8.2 Oats and Barley* 290 16.7-17.1 Wheat* 700-5.1-6.7 Hay 1,450 9.9-6.5 Rice 550-4.1-2 Sunflower 53 15.5 4.3 Cotton 280-19.5-23.7 *Includes acres used for hay and silage

Ten-year USDA National Baseline Projections, Field Crops Crops 2012 2013 2022 (2020-22/ 2011-13) Corn, Acres (mil.) 96.9 96.0 92 0.96 Production (bil. bu.) 10.7 14.4 15.26 1.20 Price ($/bu.) 7.60 5.40 4.85 0.74 Wheat, Acres (mil.) 55.7 57.5 50 0.90 Production (bil. bu.) 2.27 2.19 2.08 0.96 Price ($/bu.) 8.10 7.20 6.2 0.81 Rice, Acres (mil.) 2.70 2.70 3.2 1.19 Production (mil. cwt) 199 192 250.3 1.29 Price ($/cwt) 15.0 15.2 16.9 1.12

Ten-year USDA National Baseline Projections, Beef, Poultry and Dairy Commodity 2012 2013 2022 (2020-22)/ (2011-13) Beef, Production (bil. lbs.) 25.6 24.5 26.3 1.03 Price ($/cwt) 121 127 129 1.07 Broiler, Production (bil. lbs.) 36.5 36.1 41.7 1.13 Price (cents/lbs.) 51.0 52.9 62.7 1.23 Eggs, Production (bil.dozens) 7.69 7.61 8.10 1.05 Price ($/dozen) 1.00 0.99 1.20 1.20 Milk, Cows (millions) 9.23 9.13 8.91 0.97 Milk per Cow (thou. lbs.) 21.6 21.9 25.8 1.17 Price ($/cwt) 18.6 19.6 20.8 1.06

Ten year USDA National Baseline Projections, Fruits Crops (2020-22)/ 2013 2022 (2011-13) Citrus, fresh and for proc., price index reflects weighted avg. Production (bil. lbs.) 23.1 21.1 0.91 Exports ($ bil.) 1.4 1.5 1.29 Imports ($ mil.) 604 850 1.49 Price Index 113.4 137.4 1.24 Non-citrus, fresh and proc., price index reflects weighted avg. Production (bil. lbs.) 41.0 42.9 1.03 Exports ($ bil.) 3.9 5.3 1.4 Imports ($ bil.) 7.3 10.6 1.46 Price Index 96.5 109.0 1.13 Wine Exports ($ bil.) 1.3 1.9 1.41 Imports ($ bil.) 5.4 8.1 1.53

Ten-year USDA National Baseline Projections, Tree Nuts and Vegetables (2020-22)/ Crops 2013 2022 (2011-13) Tree Nuts, main tree nuts, price index reflects a weighted avg. Production (bil. lbs.) 5.4 6.5 1.20 Exports ($ bil.) 7.0 10.0 1.59 Imports ($ bil.) 2.0 3.1 1.61 Price Index 138.9 145.2 1.06 Vegetables, fresh and for proc., excluding potatoes and pulses Production (bil. lbs.) 83.1 87.9 1.08 Exports ($ bil.) 6.2 8.1 1.31 Imports ($ bil.) 10.8 15.8 1.49

Summary Discussion Prospects for Dairy are Central 1) The dairy industry is large and important for GHG emissions 2) Dairy prospects determine prospects for silage (and to some degree alfalfa) and therefore crop mix using land and water 3) The dairy industry uses almost all silage and much of the alfalfa in the Central Valley (about 1.5 million acres), so if dairy demand changes it affect land use for all crops 4) Current dairy prospects are not favorable...costs of production and processing are no longer low relative to other places and California no longer has a technology edge 5) Only about 15% of output is sold as fluid locally, the rest hinges on competition with other regions that have adopted California systems. 6) California dairy must innovate to compete effectively 7) Moreover, housing two million cows near several million people raises further complications that add to costs

Summary Discussion, Crops 1) The is no reason to expect an end to the long-term shift away from grain and cotton towards trees and vines 2) California rice, grown mostly on land not suited for other crops, has distinct markets, types and quality. 3) Tree nuts are moderate users of water and labor. Exports and domestic demand can still grow from a small share of consumer budget as incomes grow. Technical change continues to improve yields and lower costs. 4) Wineries are again encouraging grape planting (Coastal and in the Central Valley). Long term demand prospects support more acreage. 5) Processing tomatoes remain a successful rotation crop. Drip irrigation lowers water use, raises yields and lowers GHG emissions. Global demand continues to grow and European costs are high. 6) The other important commodities for land use (cattle and calves) or value (ornamentals & fresh produce) are much less important for Greenhouse gas mitigation.

Thank you. www.aic.ucdavis.edu