California Ag Outlook: 2012

Article written by Vernon Crowder, Rabobank
When asked about the outlook for the ag and food sector in California, the answer is dependent upon the forecast for global growth, interest rates, the value of the U.S. dollar, and of course, weather.

Global Growth
Most forecasts of global growth project it to decline from 4 percent last year to 3.3 percent in 2012. Many of the European economies are slowing significantly and some will go through a "second dip." Economic growth in the U.S. is expected to improve, although at a moderate rate. Asian economic growth will moderate, but remain much higher than the global average. Hence, total ag and food exports may slow slightly, but domestic consumption should continue to improve, unless shortages of some products push their prices too high.
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The Governor’s 2012 Budget Proposal

The California Constitution requires the Governor to submit a budget proposal for the next fiscal year by January 10, but this year the budget was released five days early due to someone inadvertently posting the document to the Department of Finance website. So, the annual budget battle began with little fanfare in a hastily assembled press conference attended by Capitol reporters on January 5, 2012.
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Brown’s Proposed Use of Cap-and-Trade Proceeds Draws Warnings of Legal Challenge

There might be more money in the first year of California’s cap-and-trade program than expected. Governor Brown’s 2012-2013 budget includes $1 billion in revenue from the state’s cap-and-trade program, ramping up this year as part of California’s 2006 climate legislation, known as AB 32.
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CLFP Engaged in GHG Revenue Allocation Proceeding at CPUC

CLFP is party to the Greenhouse Gas (GHG) Revenue Proceeding (R11-03-012) at the CA Public Utilities Commission. This proceeding will determine what amount, if any, of the funds generated from the sale of electric utility allocations will be returned to the ratepayers to offset electricity cost increases resulting from AB 32.
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Commercial canning in California began in 1858 in San Francisco. By 1862, the pack of fruits and vegetables reached 5,400 cases or approximately 130,000 containers (about 54 tons of raw product). In 2011, California’s processed fruits and vegetables reached 18 million tons, or the equivalent of 45 billion containers.