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July 15, 2006

A numbers game

Agricultural Commissioner Earl McPhail released the 2005 Ventura County crop report on Thursday, an annual tradition that dates back to 1896. That first crop report more than a century ago was submitted to the state by the County Board of Horticultural Commissioners, and was a mere three paragraphs long. It discussed mostly pests, such as black scale and codlin moths, and described some of the efforts undertaken to combat them -- notably the release of ladybird beetles, indicating that reliance on beneficial insects rather than chemicals has a long history here.

The modern crop report is a much more elaborate affair -- though today's version is not as elaborate as those in the 1950s and 1960s, which provided extravagant detail on the yearlong activities of the ag commissioner office staff, including more than most people could possibly want to know about seed certification and pest inspections -- and it provides an intriguing statistical snapshot of the county's agricultural industry.

One of the great weaknesses of traditional reporting on the annual crop report is a failure to look beyond the limited set of numbers each summary provides. Comparing this year's numbers to those from last year is not particularly instructive, given that natural events can cause big year-to-year differences. But by comparing those for several years, it's possible to identify broad trends and gain added insight into the forces affecting the county's signature industry.

This year's report notes that overall farm revenues fell 12 percent from 2004 to 2005, a drop of $164.3 million. McPhail blamed much of the drop on last year's heavy rains, which made a mess of strawberry and vegetable fields.

Nearly half the decrease, however, can be accounted for by a precipitous drop in revenue for avocados, which earned local growers roughly $70 million less in 2005 than in 2004. The main reason for this is no mystery, but it has nothing to do with rain. It has to do with several days of unseasonably hot weather in 2004 during the brief window of time when avocado trees were blooming and preparing to set the fruit that would become the 2005 crop. Scorching heat and wind simply crisped most of the flowers before they could be pollinated, growers recall.

The results are visible in one of the other numbers included in the crop report. In 2004, avocado growers produced an average of 3.28 tons of fruit per acre. In 2005, they produced less than half as much, 1.54 tons per acre. Instead of 63,095 tons of the pebbly green fruit, for which they were paid $1,976 a ton in 2004, county growers harvested only 29,592 tons, for which they were paid an average of $1,852 a ton.

Here's the bright side of the poor 2005 crop: Last year's paltry production allowed the trees to conserve much of the energy they would otherwise have expended developing fruit. So when perfect conditions accompanied the 2005 bloom, the trees went crazy, producing the staggering amount of fruit avocado growers have been harvesting this year.

It's also worth looking more closely and thoughtfully at the figure representing the total value of the local crop, which the 2005 ag commissioner's report lists as $1.2 billion -- and which the Star's front-page story said represents "the seventh consecutive year" that local farmers earned more than $1 billion.

To perform meaningful comparisons from year to year, it's necessary to adjust the figures for inflation and express them in constant dollars. When you do that with local crop revenues, the otherwise optimistic progression of ever-higher numbers that forms a centerpiece of most reporting on the data evaporates. What's revealed is an industry whose revenues have been at the billion-dollar-a-year level for much longer than seven years, but which have been stagnant since at least 1979.

Using an inflation calculator available from the U.S. Bureau of Labor Statistics, I plugged in the numbers for the past 27 years (thoughtfully provided by the latest Ventura County crop report) and translated them into constant 2000 dollars.

That calculation reveals the 1979 crop value to have been $1.1 billion. In the same inflation-adjusted dollars, this year's value is -- you may have guessed it -- $1.1 billion. Between 1979 and 2005 the annual value fluctuated modestly, from a low of $823 million to a high of $1.3 billion, but has mostly hovered right around the $1 billion mark. The inflation-adjusted 27-year average, in fact, is $1.03 billion.

Here are a couple of graphs I created (using my computer's Excel software) that illustrate the data. The first (View image) has just the adjusted figures.

The second (View image) includes a linear trend line helpfully generated by Excel.

As the trend line illustrates, inflation-adjusted crop revenues have increased a tiny amount since 1979, from just under $1 billion a year to around $1.1 billion. But when you think about how much labor, water and land costs have risen in real dollars during that same time, the reason for the common economic anxiety of local growers becomes clear.


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