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January 2012, Volume 18, Number 1

California, US Agriculture

California farm sales were $37 billion in 2010, up from $34 billion in 2009, led by a sharp jump in dairy sales to almost $6 billion. Grapes worth $3.2 billion were the second most valuable commodity. California farm sales and exports rose again in 2011, led by a resurgence of cotton to almost 455,000 acres.

Raisins. Raisin prices reached an all-time high of $1,700 a ton in 2011, more than double the 2002 price. Harvesting raisins has traditionally been the single most labor-intensive activity in North America, requiring about 50,000 workers for the six-week harvest. Harvesting involves cutting bunches of green grapes and laying them on paper trays to dry into raisins in the fields. About 4.5 tons of green grapes dry into a ton of raisins.

Harvesting raisins is a race between sugar and rain. Grapes cannot be harvested until they have 22 to 24 percent sugar. However, the longer growers wait to harvest grapes, the higher the probability the drying raisins could be rained on. In order to collect crop insurance on drying raisins damaged by rain, growers must have their raisins harvested by about September 20.

If growers plant varieties that reach optimal sugar levels sooner, they can cut the canes with bunches of grapes and allow them to dry into raisins while still on the vine. Modified wine-grape harvesters can shake the raisins off the vines and collect them.

Improved technology and rising piece rate wages, about $0.25 per 25-pound tray, stimulated grower interest in replanting vineyards for dried-on-the-vine mechanical harvesting. DOV was used on half of the estimated 355,000-ton raisin harvest in 2011.

Strawberries. California produced 178 million trays of strawberries in 2011 from 37,300 acres, down slightly from 181 million trays in 2010 from 27,600 acres. California produces 85 percent of the US strawberries.

US Agriculture. Farmers had a record year in 2011, with net farm income topping $100 billion. Crop prices were high due to exports and biofuels, which increased the price of farm land. The average price of US farm land doubled between 2000 and 2010, from $1,090 to $2,140 an acre. Between 2006 and 2011, corn prices tripled and soybean prices doubled.

Farm sales were $410 billion, including $204 billion from crops. The value of fruits and nuts was $22 billion and vegetables and melons $21 billion in 2011.

The current farm bill expires in 2012. Farm subsidies are about $18 billion a year, including $5 billion in direct payments to relatively few large farmers. In 2010, the 10 percent of direct-payment recipients that received the largest amounts got 60 percent of the total. Average household income was $87,780 for all farms in 2010, and $201,465 for families living on large farms.

Congress is considering substituting "shallow-loss protection" for direct payments. Subsidized crop insurance currently protects farmers from major losses caused by large drops in prices or damage to crops, with the federal government paying $6 billion a year to cover half of farmers' premiums. The new shallow-loss protection would protect farmers from smaller dips of 10 to 15 percent in their incomes.

The average age of US farmers is almost 60, while the average age of hired farm workers is about 30. Relatively few hired farm workers climb the agricultural ladder from worker to farmer, in part because hired workers with no financial track record find it hard to get bank loans for land and equipment.

The National Agriculture Statistics Service generates about 500 reports a year on the commodities produced by US farmers. NASS's predecessor agencies began producing data on US agriculture in 1863, a year after USDA was created. NASS proposed eliminating some of the data collected on minor crops in November 2011 to save money. An earlier effort to eliminate NASS reports in 1982 resulted in many data-gathering efforts resuming a year later after lobbying by affected commodities.

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