LONG BEACH, OAKLAND: KEY TO EXPORTS

LONG BEACH, OAKLAND: KEY TO EXPORTS

California's agricultural economy, at $20 billion, is No. 1 in United States - a rank it has held for 46 years - and it is increasingly looking overseas. As Ann Veneman, secretary of the state Department of Food and Agriculture, declared in a June speech, "The future of California agriculture is linked to global markets."

The state exports some 32 percent of its farm production. In 1994, California agricultural exports, including fish and timber, totaled some $11.8 billion - more than a 10 percent increase from 1993's $10.7 billion. Top exports include fruits and nuts, wheat, lettuce, strawberries and dairy products. Cotton, especially, was a star for California in 1994, with exports increasing from $670 million to $970 million, a 45 percent rise. Edible fruits and nuts rose from $2.3 billion to $2.5 billion, a 9 percent increase.The top destinations for California's agricultural bounty include Canada, Japan, the European Union, South Korea, Mexico, and Taiwan.

Those markets are served by California's ports, primarily Oakland and Long Beach.

Long Beach has moved ahead of Oakland in moving agricultural products overseas, shipping 25 percent of California's agricultural exports, while Oakland ships 22 percent. But a representative of the Port of Oakland wouldn't be drawn into a war between California's north and south, insisting that "The pie is big enough for both of us."

Bruce Lambert, trade analyst for the Port of Long Beach, said that many factors have helped Long Beach's growth.

"First, we have seen more carriers put attention to developing Long Beach trade - new ships, new piers, etc. The carrier that grew the smallest amount here last year grew by 10 percent. Tosco, Hanjin, Maersk, Sea-Land each has grown more than 10 percent. Some have almost doubled capacity by adding new ships."

Long Beach does some European trade, but "Asia is what wags the tail here," Mr. Lambert said. "Also, now we have an overweight corridor - Oakland has had one for a long time." Many agricultural products, like hay, are very dense, resulting in overweight containers; overweight corridors are designed to allow trucks to handle these products.

The corridor, said Mr. Lambert, "has helped us handle more tonnage from certain shippers who are relatively local, say in Bakersfield. They now have a choice - they ship by rail, then consolidate on trucks."

But Mr. Lambert added that "as a port, we don't do marketing; we market to the ocean carriers. They have the capacity, and they want to fill the ships. They're filling the ships the other way, and the carriers are doing the marketing on the export side, too. The carriers are really pressing the flesh, sending the growers the free hats and so on."

Still, "There's a lot of interest in U.S agricultural exporting, not just

from Japan, but from Taiwan, Korea, and China," said Mr. Lambert.

The yen's strength against the U.S. dollar, a changing diet and more favorable regulations are prompting more agricultural imports by Japan, giving California a boost in the process.

Between the overweight corridor, continued export growth, growth in carrier capacity, and the yen's strength, Mr. Lambert said, "A lot of things are happening at the right time for the port of Long Beach."

While Long Beach is growing, Oakland - a big, traditional export port - is, too.

Seven of Oakland's top 10 export commodities are agricultural. More than 631,000 metric tons of the No. 1 category, fresh and frozen fruits and vegetables, were shipped out of Oakland in 1994, as well as 267,000 tons of raw cotton, the No. 3 commodity, and more than 147,000 tons of edible nuts, which ranks eighth.

"We really feel our primary customers are the ship lines," said a Port of Oakland representative. "We're catering to them to make sure we can provide the best intermodal shipping, via highway, railroad and our port."

Parker Booth, vice president of the Marine Services Division at Salinas, Calif.-based transFRESH Corp., said, "Both the ports (of Oakland and Long Beach) and the carriers are very aggressive. They're investing a lot of money in new equipment."

He added that "In agriculture, the natural growth is down south." High- value agricultural commodities grown in the southern San Joaquin Valley and in Southern California areas like Ventura and Santa Barbara counties might thus tend to ship via Long Beach.

Despite that, Mr. Booth said, Oakland remains a key export port.

For example, in 1994, 400 atmosphere-controlled containers of asparagus were trucked north to Oakland for export. None went out of Los Angeles or Long Beach.

The carriers are increasingly marketing to growers; in addition, the state of California matches overseas buyers with the appropriate grower. The combination has helped drive the growth in agricultural exports moving through the ports.

Jim Zion, manager of the California Export Program for the California Department of Food and Agriculture, said the increase in exports in 1994 can be attributed to "weaker currency, increased demand for fruits and vegetables, increasing incomes in Asia, and GATT and Nafta. As barriers come down, trade moves a lot easier."

California is also marketing successfully as it competes with other states like Texas, as well as with Chile, Australia, New Zealand, the EU, and Brazil.

"We're doing six trade shows a year," Mr. Zion said. "Buyers come to California, and we put buyer and seller together. For example, we've matched Mexican buyers with California dairies. We facilitate - the matchmaking function is a very important one. We go almost up to the point of making the sale."

So which port will carry the bulk of the cargo?

Mr. Zion said that in 1994, "Cotton was a big export market, and a lot of it goes out of Long Beach."

Yet Fresno, a hub of San Joaquin agriculture, is equidistant from Long Beach and Oakland. For growers choosing a port, it's not a question of loyalty to north or south, but as Mr. Zion diplomatically puts it, "It depends on where you are in the valley." Refrigerated containerization has made highly perishable fruits and vegetables a valuable export commodity. Now, new technology - controlled-atmosphere shipping - is bringing fruits and vegetables to faraway markets at lower costs.

With controlled-atmosphere shipping, Parker Booth of transFRESH said, ''Asparagus can now go by ocean freight for just 25 cents in shipping costs per carton, vs. air shipping at $1.50 a carton. Ocean is taking over from air shipping."