Supply chain disruption cost California farms $2.1 billion in stalled exports

Supply chain disruption cost California farms $2.1 billion in stalled exports

Supply chain disruption cost California farms $2.1 billion in stalled exports

Already staggered by the drought, California’s farmers are losing overseas sales as the COVID-19 pandemic has produced a devastating shortage in shipping containers.

A study led by UC Davis agricultural economist Colin Carter said California’s farm belt lost $2.1 billion in exports during a five-month stretch this year because of what he called “containergeddon.”

In a study released Wednesday by UC’s Giannini Foundation of Agricultural Economics, Carter and two researchers from the University of Connecticut said the supply-chain mess snarling world commerce cost the state’s growers 17% of their export sales from May to September.

They said California nut-tree farmers lost the most business, about $520 million, followed by the wine industry at $250 million and rice growers at $120 million. Carter said in an interview that the export sales are gone, not merely delayed.

“The tree nut market — that’s very seasonal,” he said. “There’s a big demand at Christmastime, and we’ve lost that.”

He said the losses exceed the financial harm done to the farm economy during the 2018 U.S.-China trade war. Exports matter a lot to California farmers. Of the $49 billion they were paid for their crops in 2019, nearly $22 billion came from exports, according to the Department of Food & Agriculture.

The lost exports come as farmers struggle through a drought that has choked off water supplies to many growers. The California Rice Commission estimated that rice farmers fallowed about 20% of their fields this year — leaving thousands of acres idle across the Sacramento Valley.

“I know they’re having trouble exporting,” said Fritz Durst, a Yolo County rice farmer who idled half of his land this year.

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