Department of Agricultural and Resource Economics

The California wine industry is growing and changing amidst a global revolution in grape growing, wine production, wine marketing and consumer tastes. California accounted for roughly 90% of the value of U.S. wine production in 2006. U.S. per capita wine consumption and the quality of wine consumed continue to rise. The largest California wineries have long accounted for most California wine shipments and continue to expand with respect to volume and number of labels. While small wineries sell most of their wine directly to end-users, many midsized wineries face challenges in an increasingly crowded marketplace.

The recent phase-out of the soil fumigant methyl bromide (MB) due to its impact on stratospheric ozone pre-sents a huge challenge to strawberry nursery producers. We evaluated the effectiveness of alternative fumigants on soil pests and plant productivity, as well as production costs in California strawberry nurseries. Our trials followed nursery stock through low- and high-elevation phases of runner-plant propagation and a complete cycle of fruit production in coastal fields. Plant yields from the nurseries and fruit yields from Oxnard and Watsonville indicated that nursery plots treated with iodomethane plus chloropicrin, with 1,3-dichloropropene followed by dazomet, and with chloropicrin followed by dazomet produced runner-plant yields that were similar to methyl bromide plus chloropicrin. However, our economic analysis suggests that nursery profitability may nonetheless suffer from the loss of methyl bromide.

Agricultural management has a significant impact on the amount of greenhouse gases emitted by cropped fields. Alternative practices such as winter cover cropping and avoiding overfertilization can decrease the total amount of greenhouse gases that are produced. Policymakers are considering a structure in which parties (such as factories) who exceed their greenhouse-gas emissions cap can pay incentives to encourage farmers to adopt practices that curb greenhouse gases. Based on data from field studies and an ecosystem computer model, we assessed impacts on yields and the total potential for reducing greenhouse-gas emissions of certain alternative practices in California.

Carbon sequestration in agricultural land has been studied over the past few years to determine its potential for ameliorating climate change. Agricultural soils can be efficiently exploited as carbon sinks with a variety of techniques, such as reduced tillage, cover cropping and organic systems with better manure management. However, to fully understand the potential of carbon sequestration in agriculture, the economic costs of switching from conventional to conservation management must be estimated. Since carbon sequestration depends heavily on management, crop and soil type, we conducted a field-level survey of its economic aspects in Yolo County for the 2005 growing season. The survey showed that organic and conservation management can be more profitable for field crops than conventional management in Yolo County. Finally, we demonstrated how to combine the survey data with an agronomic process model to predict the rate of adoption for conservation techniques in response to carbon payments.

Many organophosphate and pyrethroid insecticides currently used by California walnut growers have been linked to negative environmental or human health impacts, increasing the probability of use restrictions and phase-outs. We assessed the acceptability of alternative reduced-risk strategies by comparing their costs to those of pest management programs currently in use among San Joaquin County walnut growers. To do this, we analyzed data from the California Department of Pesticide Regulation’s legally mandated Pesticide Use Reports on actual pesticide applications for 3 years, from 2002 to 2004. While many factors other than cost influence growers’ pest management choices, we found that alternative strategies can be cost-competitive with conventional approaches, depending on the pest pressure and savings due to reductions in secondary pest outbreaks.

Infectious animal diseases are an ever-present threat to intensive livestock production. We analyzed control technology for foot-and-mouth disease (FMD) in a livestock-intensive region of the Central Valley, using a previously developed, numerical, optimal disease-control model. We found that the alternative FMD controls we studied (early detection, herd depopulation and vaccination) can be partially substituted for one another (substitutability) without substantially changing outbreak costs. This information can be used to develop effective and efficient policies to prepare for an FMD outbreak in California.

Many countries apply import barriers for processing tomatoes, but the European Union is the main producer that uses export and production subsidies. We modeled and measured the potential impacts on global markets and the California industry that would result from reductions in trade barriers (such as import tariffs) and subsidies for the European Union’s processing tomato industry. A multi-equation simulation model showed that reducing trade barriers in Europe and elsewhere (including the United States) by 50% would raise the market price for California tomatoes by about 6%, improve net returns to California processing tomato producers by $34 million per year, and improve net returns to California tomato processors by $19 million per year. We also found that a 50% reduction in EU domestic support would improve the net returns of California producers and processors by about $8.5 million per year. Based on these results, we believe that negotiating reductions in subsidies, and especially in global trade barriers, would make economic sense for the California processing tomato industry.

Pierce’s disease of grapevines, caused by a strain of the bacteria Xylella fastidiosa, threatens an industry with a farm value of production exceeding $3 billion per year. The grape industry incurs substantial costs from losses of vines to the disease and efforts to mitigate damage. Additional costs are borne by the public in providing programs that aim to contain the disease and develop longer-term solutions, and by the citrus, nursery and grape industries in complying with those programs. Aggregating the costs of vine losses, industry assessments, compliance costs, and expenditures by government entities, we estimate the cost of Pierce’s disease in California is approximately $104.4 million per year. Of that, $48.3 million funds Pierce’s disease activities undertaken by various government agencies, the nursery and citrus industries and the UC system, and $56.1 million is the cost of lost production and vine replacement borne by grape growers.

The impacts of climate change on agriculture depend on local conditions and crops grown. For instance, warmer winter temperatures in a given area would reduce chill hours, potentially cutting yields for some crops but extending the growing season for others. Using a century of climate data and six decades of acreage data, we established quantitative economic relationships between the evolution of local climate and acreage of 12 important crops in Yolo County. We then used the historical trend in climate change to project future crop acreages in the county. Only marginal changes in acreage in 2050 were projected for tree and vine crops there, in part because chill hours, although lower, remained above critical values. Walnuts were the most vulnerable tree crop, and the projections indicated some cultivars might be marginal in years with particularly warm winters. Processing tomato acreage might increase, due to a longer growing season, and also alfalfa acreage, if water availability and other factors remain constant.

Effective Jan. 1, 2018, the California Department of Pesticide Regulation enacted a regulation regarding the use of pesticides near public K-12 schools and licensed child day care centers, including a provision that bans specific types of applications, including air-blast and air-assist, during weekday school hours (6 a.m. to 6 p.m.) to provide an additional safety margin for pesticide exposure beyond those provided by other regulations. We considered the financial effect on almond growers in nine counties, accounting for four-fifths of total almond production in 2014, if they had been unable to complete a standard spring disease management program on any buffer zone acreage. Results indicated that total annual losses for those counties if such a regulation had been in effect would have been $8.7 million, with per-acre losses ranging from 22% to over 50% of total operating costs, depending on the county. However, using a methodology that took into account historical weather and soil hydrologic group data, we estimated average annual losses in the nine counties among almond growers would have been under $0.2 million because the regulation would have affected the number of sprays completed for relatively few acres in relatively few years.