A new report analyzing international air cargo transport trends outlines several reasons to expect growth in California airborne agricultural exports. At the same time, authors of the report caution that rising fuel costs and world terrorism have the potential to ground some export flights.
California airborne food export trade was 24.5 percent higher in 2006 than it had been 10 years earlier, despite recent declines. Updating a larger 2005 study, the report tracks the types and values of the state’s airborne agricultural exports from 1996 through 2006. Records show that export values grew from $396 million in 1996 to a high of $669 million in 2004, before falling back to $644 million in 2005 and to $579 million in 2006.
The report is titled, “The Role of Air Cargo in California’s Agricultural Export Trade: A 2007 Update” and is available on the Web site of the Center for Agricultural Business (CAB). The work was completed through a study led by Dr. Bert Mason, professor and chair of Fresno State’s Agricultural Economics Department. Co-author is Jock O’Connell, a Sacramento-based international trade consultant.
“One purpose of this study was to draw attention to the unique role of air cargo in reaching lucrative and expanding overseas markets that would be otherwise inaccessible to specialty crop growers in this state,” Mason stated.
For growers of certain high-value specialty crops such as cherries, strawberries, asparagus and organically-produced perishables, the ability to ship to distant markets by air is immensely important, if not indispensable, O’Connell said. In 2006 for example, 77.6 percent of California’s $60 million in fresh cherry exports traveled by air.
Seeds for growing fruits, vegetables and flowers ranked at the top of the value list, with air exports totaling $114.3 million. Other important airborne exports in 2006 included wine (valued at $21.8 million), various food preparations ($41.6 million), purebred breeding animals ($38.3 million), and bovine semen ($18.5 million).
The principal destinations of California’s airborne agricultural export trade are in the Far East, with Japan ranking as the single largest market over the last three years, the authors found. South Korea, China, and Taiwan are all currently number among the top ten overseas markets. The second and third largest customers are the United Kingdom and Australia. A more limited airborne agricultural export trade is conducted with Continental Europe and Latin America.
Progress in negotiating new air transport agreements with key U.S. trading partners should open new and more convenient air routes from California to a larger number of overseas markets, the authors said. Other positive trends include the following:
Worldwide demand has expanded dramatically for high-quality and typically high value-added food products grown and processed under conditions conducive to wholesomeness and food safety.
A new generation of medium-sized, long-range aircraft featuring fuel efficient engines (typified by the Boeing 787 “Dreamliner”) will begin to enter service in 2008. By 2020, it is expected that airlines will be offering non-stop or direct international flights between an increasing number of so-called “second-tier” airports here and abroad.
The increasing reliance on huge mega-ships to carry vast numbers of freight containers is limiting the ability of ocean-carriers to reach many of the new, geographically dispersed markets emerging in developing countries, often in interior regions far from the nearest major seaport.
Current and potential exporters should guard their optimism in the face of challenges that could be difficult to overcome, the authors also note. For example:
Until very recently, jet fuel prices had been rising precipitously, a serious development for all transportation industries but especially so for one in which fuel costs represent a disproportionately large share of operating expenses.
Ground access to California’s principal international air cargo gateways – Los Angeles
International (LAX) and San Francisco International (SFO) – is becoming increasingly problematic for all exporters, but especially for shippers of perishable products.
Should terrorists succeed in planting an explosive device in the cargo hold of a passenger airliner anywhere in the world, the U.S. Congress may act to either ban third-party freight from passenger aircraft or require such onerous inspection procedures as to make shipping perishable produce aboard passenger aircraft no longer viable.
The complete 25-page report on airborne trade contains additional projections, trends and values of air-exported products over the last 10 years, and analysis of key issues affecting airborne trade. To view the report, click here.
Funding for this project was made available by the Governor’s “Buy California Initiative,” the California Department of Food and Agriculture and the U.S. Department of Agriculture, through the California State University Agricultural Research Initiative (ARI) Program.
Related link: CAB – http://www.cati.csufresno.edu/cab
(Release by Steve Olson, California Agricultural Technology Institute)