California exports take a slight drop

Probably the best news lately is that our single largest export market, Mexico, remains on a more stable economic footing

By ·

As the Agricultural Transportation Coalition prepares to convene in San Francisco for their annual convention next week, comes news that California ag exports are in decline.

According to an analysis by Beacon Economics, California’s exports of manufactured goods in April nudged up a nominal 0.6 percent from $8.44 billion to $8.49 billion, while non-manufactured exports (chiefly raw materials and agricultural products) fell by 3.7 percent from $1.65 billion to $1.59 billion. Re-exports, meanwhile, rose by 5.5 percent from $2.79 billion to $2.95 billion.

At this time last year, Walter Kemmsies, chief economist for transportation engineering company Moffatt & Nichol, told the AgTC that “agriculture was the fastest-growing segment of the next business cycle.”

This projection was not challenged by Beacon, however.

“If anything is remarkable it’s that the April numbers were not worse, ” said Beacon economist, Jock O’Connell, “It’s hardly a secret that Europe is in grave distress, that China’s slowing down, and that major economies like Brazil and India have begun going wobbly.”

Compounding the challenge for the estimated 60,000 California companies that ship goods to customers around world, the crisis of the euro has driven up the value of the dollar, effectively making U.S. products more expensive for foreign buyers.

Beacon Economics’ Founding Partner Christopher Thornberg said that with more uncertainty abroad, foreign capital tends to flow to the U.S., as a safe haven, thereby increasing the value of the dollar and making U.S. exports less competitive on global markets.

“While this trend is not expected to be permanent, the dollar could rise more vis-a-vis the euro until their banking issues are dealt with,” said Thornberg. “This could make it somewhat difficult to maintain the pace of export growth that we’ve enjoyed thus far in the recovery.”

The news is not unrelentingly dismal, however.

“Probably the best news lately is that our single largest export market, Mexico, remains on a more stable economic footing,” O’Connell said, noting that Mexico’s central bank had just last month updated the country’s economic growth outlook for 2012 to a range of 3.25 percent to 4.25 percent.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Exports · Global · Transportation · All Topics
Latest Whitepaper
How Lean is your Lean Quality Program?
Avoid quality program bureaucracy that can sap logistics productivity and increase costs
Download Today!
From the September 2016 Issue
Indecision revolving around three complex supply chain elements—transportation, technology and organizational structure—finds many companies waiting to commit to a strategic path. However, waiting too long will only result in a competitive disadvantage that will be difficult to overcome in today’s fast-paced, global economy.
Time for Asia’s ports to rebuild
Is the freight recession upon us…again?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Supply Chain Best Practices: Visibility to In-Transit Inventory
During this webcast you'll learn on how various organizations have gained instant access to in-transit parcels and given access to this information to stakeholders.
Register Today!
EDITORS' PICKS
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...

Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....