Agriculture, Water and the California Economy

1. 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

2. 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

3. California agricultural land use

4. California 2010 cash receipts and acreage, by commodity grouping Cash receipts Acreage

5. 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,

6. Top 20 California Commodities by Value, 2010 The top 20 commodities accounted for $30 billion of $37.5 billion in total sales.

7. California value of agricultural exports in 2010 Total CA agricultural export value: $14.7 billion Value by Commodity Group Value by Destination

8. 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)

9. Agricultural cash receipts per acre-foot of applied water, California, in year 2005 dollars

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

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

12. Index of California harvested acreage and real crop receipts

13. Indexed real prices of U.S. corn and wheat, 1866-2011

14. Index of real prices of California commodities, 1980-2011

15. Agricultural Production Share of GDP, 2007-2009 average

16. California agriculture and economy, 2009

17. 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

18. California farming and economy, 2009

19. Central Valley agriculture and economy, 2009

20. 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.

21. Central Valley farming and economy, 2009

22. Southern California agriculture and economy, 2009

23. 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.

24. Southern California farming and economy, 2009

25. Thank you, Dan Sumner aic.ucdavis.edu