Farms in our sample had an average of $1.4 million in assets and $0.6 million in debts. The average debt-to asset ratio was close to 0.5. This ratio is much higher than the 0.16 debt-to-asset ratio reported by the United States Department of Agriculture for all American agriculture in 2003. When viewing assets and debts as financial inputs necessary to generate revenue, the ratio of financial input to gross sales was highest for vegetables and lowest for orchard crops.This study provides a detailed statistical profile of an important segment of California agriculture, the horticultural crop industry. The information provided is based on a unique survey of growers of horticultural crops, also known as specialty crops, that was conducted during the spring of 2002 at the request of the Risk Management Agency of the United States Department of Agriculture . This report presents data about horticultural industries in California and about the risk management attitudes, approaches, plastic growing bag and needs of farmers producing these commodities. Specialty crops are diverse. These crops can best be defined by exclusion—as all agricultural crops excluding grain crops , oil seeds , cotton, peanuts, and tobacco.
The bulk of specialty crops consist of fruits and nuts, vegetables, and ornamental crops . The industries featured in this study accounted for more than $16 billion of gross farm revenue in 2001. This value was more than 90 percent of the state’s total crop value and 60 percent of total agricultural value produced in California at the farm level. These industries are also important nationally. California accounts for 37 percent of the total value of horticultural crop production in the United States. In the past, these industries have expanded steadily in California, adding more than 300,000 acres between 1992 and 1997 . In the future, California’s horticultural industries are expected to continue to expand in size and importance. For the most part, horticultural growers have not been major recipients of farm program subsidies and have had relatively little government support compared to growers of commodities such as grains, oil seeds, cotton, sugar, and dairy products. Some horticultural crops have been eligible for USDA crop insurance programs and ad hoc disaster assistance, promotion assistance, and miscellaneous support, but the degree of subsidy has been small—typically around 5 percent of total value, compared to 30 to 50 percent and higher for grains, oil seeds, and cotton . Horticultural crops differ from other kinds of crops in their product characteristics, production processes, and market environments and thus in their risk characteristics. The design of public policy for these crops must reflect management of their unique risks.
Knowledge of market variables and grower risk behavior is essential to developing effective risk management tools for horticultural crops. Unfortunately, while studies on traditional crops abound, little research has been done on horticultural crops. The objective of this survey was to generate wide-ranging statistical information that can be used broadly to better understand the horticultural crop industry, its sources of risk, and typical responses to those risks. The statistical profile of California’s horticultural producers presented here is the most exhaustive ever undertaken for this group. It draws on survey data collected from approximately one-third of all horticultural crop producers in the state. This report presents a large volume of information concisely. To do so, we summarize the methodology used to collect and tabulate the data; provide an overview of the seven topics addressed; and discuss the primary results. The discussion is organized by issue and includes a narrative describing the main findings for each topic. Selected figures and tables are included. The narrative is supplemented with a data section in the Appendix, which is organized into three parts. The first provides the response rate for each question in the survey. The second contains data tables organized by commodity category. The tables supplement the information presented in the narrative section with further disaggregated analysis. The last part of the Appendix provides the actual survey instrument.The first stage of the study, the survey of specialty crop growers, involved developing a questionnaire. The questionnaire was developed specifically for specialty crop growers based on the format of a survey instrument used previously , with input from RMA and from researchers who conducted an identical study in Florida, Pennsylvania, and New York. The California Agricultural Statistical Service assisted in formatting the questionnaire to facilitate its implementation. The final version of the survey instrument is presented in Appendix 3. We established the sample frame by defining a minimum number of acres required for a farm to qualify for the study using information from CASS’s database.
To be included in the study, a farm had to have at least five acres of perennial crops or at least two acres of annual specialty crops . This limit was designed to exclude very small farms that were unlikely to be commercial operations. The acreage criterion was applied to CASS’s database, which contains information on more than 60,000 farms in California . A total of 31,864 farms met the acreage limit with the crops selected for the survey. CASS conducted two rounds of mailings and one round of telephone interviews to collect completed surveys. In total, the two survey mailings garnered 7,391 responses. Those mailings were followed by telephone interviews of growers who had not responded by mail, which collected an additional 7,746 responses. In total, 15,137 responses were received . Relatively few farmers answered all 25 survey questions, which required responses in 192 cells. Under some “usability” criteria on the completeness of the DATA COLLECTION AND AGGREGATION answers, some responses were discarded.1 In total, 10,410 observations were entered into an electronic database file that was then transferred to the authors. Our primary analysis used only the horticultural-crop based sample, which consisted of 10,200 observations. Among non-crop categories, aquaculture producers provided the largest number of observations, allowing some statistical analysis of that industry. We provide data tables for aquaculture in Appendix 2 but omitted aquaculture from the narrative analysis. Note that sample size used in our analysis varies depending on the question being analyzed. Survey responses varied in degree of completeness, and valuable information could have been lost if only fully completed responses were used. Thus, to maintain the maximum sample size, different sub-samples were used, depending on the usability and appropriateness of the data provided, in analyzing particular issues. Information on sample size is included in most of the table presentations.Several mountain ranges in California create the dominant Central Valley and smaller coastal valleys where much of the state’s agricultural production is concentrated. The large Central Valley consists of the Sacramento Valley, wholesale grow bags which lies north of the San Francisco Bay Delta, and the San Joaquin Valley, which lies south of the delta. The Central Valley is encircled by the Cascade ranges and Klamath Mountains to the north, the Sierra Nevada Mountains to the east, the coastal ranges to the west, and the Tehachapi Mountains to the south. The coastal ranges also create a long strip of valleys, including, for example, Napa Valley and Salinas Valley. . Climates in the region are affected by the cool currents of the Pacific Ocean and various mountain ranges. Temperatures in coastal regions are relatively mild while inland areas are hotter. Almost all of the state’s rain and snowfall occurs during late fall and winter . The majority of California’s water supply originates in the northern mountain regions of the state. Land for specialty crops is nearly all irrigated via ground water and various district, state, and federal water storage and distribution systems . California has 58 counties. In our analysis, we aggregated the counties into 11 regions with similar geographic and climatic characteristics as shown in Figure 1. The Sacramento Valley and San Joaquin Valley are together referred to as the Central Valley.California’s specialty crops include more than 200 individual crops. To facilitate a manageable analysis, crop aggregation was needed. First, all the commodities were assigned to one of five basic categories: field crops, fruits and nuts, vegetables, ornamental crops, and non-crop commodities. The last category included a small number of apiary and aquaculture farmers, but for category-specific analyses, we considered only aquaculture farmers because there were too few apiary farmers for any statistical analysis.
Fruits/nuts, vegetables, and ornamentals, which were our focus, were then further divided into subcategories of similar types of crops . The third level of classification identified specific crops. Our data analysis used mostly the first two levels of classification. See Table 1 for a detailed description of the classifications. While classification of fruits and nuts into the second level is self-evident, such classification of vegetables needs discussion. A wide variety of vegetables appears in the data and choosing transparent and intuitive yet manageable groups was difficult. Following USDA guidelines, nine botanical classifications of vegetables were aggregated into six groups, guided by climatic growing conditions and by the number of observations available.To highlight the results, we limited our analysis to the three primary crop categories—fruits/nuts, vegetables, and ornamental crops. The basic data set used in this analysis included only specialty crop farmers by excluding respondents whose primary commodity was listed as a non-crop or a field crop. With this exclusion, our basic data set consisted of 10,200 observations. Note, however, that much smaller samples were used in the analysis of many of the issues . In the following discussion we highlight only the major results for each topic. A fuller description of the data used for most charts and figures in this narrative can be found in Appendix 2.As a starting point, we present an overview of our sample and distributions of acreage and farms by region and by crop category. At the end of this section, we compare these distributions of survey respondents to those reported in the 1997 Census of Agriculture to illustrate the representativeness of the farms surveyed. Table A1 presents the share of farms and mean acres per farm by region and by crop category. Standard deviations are provided to give readers some sense of the variation in acreage. The three San Joaquin Valley regions accounted for 47 percent of the sample, the Sacramento Valley added another 13 percent, and the four coastal regions added 33 percent. The Far North, Sierra Nevada, and Desert regions comprised a substantial portion of the state’s land area, but only 7 percent of specialty crop growers in the sample were located in those regions and the average acreage per farm in those regions was below the state average. Fruit/nut growers represented about 86 percent of the sample; therefore, any data analysis on all crops tends to be dominated by the characteristics of fruit and nut farms. As shown in Table A1, mean acres varied considerably across crop categories but much less across regions. The average acreage for vegetable farms was substantially larger than the averages for fruit/nut and ornamental farms. On the other hand, average farm acres across regions were within the narrow range of 100–280 acres . The standard deviations for all acreage distributions reported in Table A1 were relatively high, meaning that the distributions were spread widely. To compare the degree of spread between distributions, the ratio of the standard deviation to the mean was calculated. The CV was seven for the whole sample and much higher in some regions. The South Coast’s CV of 15 was the largest. Of the crop categories, ornamentals had the largest variation in acreage. Table A2 provides the distribution of farms across finer crop classifications for each of the three main crop categories. Observations were classified into a subcategory based on farmers’ responses on their primary crops.3 Some facts stand out. Grape farms and nut farms each comprised more than 30 percent of all fruit/ nut farms, and nurseries comprised 67 percent of all ornamental farms. While almost one-third of vegetable farms grew tomatoes , the rest of the subcategories of vegetables were fairly evenly distributed. Table A3 provides the cumulative distributions by acreage class, which indicated that median per-farm acreage was between 21 and 30 acres for fruits/nuts and about 70 acres for vegetables. The same distributions are provided pictorially in Figure A1. About 40 percent of both fruit/nut and vegetable farms were concentrated around the land classes of 20 acres or less. Such high density of relatively small farms was common in the farm acreage distributions.