|Agricultural exports across the Pacific |
July 19, 2010: ODA Director Katy Coba spoke to the annual conference of the Association of Pacific Ports, held at Skamania Lodge and hosted by the Port of Umatilla. In the audience were officials from West Coast ports, including representatives from Oregon, California, and Washington, as well as visiting officials from the Pacific Rim.
It truly is a pleasure to be here today. For those of you who have not been to Oregon and been able to enjoy the Columbia River system, you are in for a huge treat.
I'm a fifth generation Oregonian. My family ranch is in Pendleton. I don't think there is more beautiful place in the world. I'm very fortunate. My family still lives there. My brother is now running our ranch. My summers were spent driving a truck. We hauled wheat from the combines where we were harvesting, down to our bins or to the Port of Umatilla, which is my home port. The last couple of years driving a truck, I actually drove an 18-wheeler and hauled grain from our bins directly down the port. That was truly a major part of my life and is still a major part of my family, too.
The other thing you will get while touring Pendleton is a true understanding of at least a part of agriculture in the State of Oregon, and that is wheat. I like to brag about wheat because that is my family's operation. But wheat is also the largest export out of the Port of Portland. So it truly is the backbone of the Columbia River system and the whole port system all the way from Idaho, down Washington, through Oregon, and out of the Port of Portland.
Agriculture in Oregon is much more diverse than just wheat, however. So I have to be true to the rest of the producers in the state. We are an incredibly diverse state when it comes to agricultural production. And we mirror our neighbor to the north, Washington, in terms of the diversity of what we grow. Washington is probably close to double our size in terms of agricultural production. We are as diverse as the State of California, our neighbor to the south. We don't grow quite as much as they do in terms of total production. So we say we have to be extra special in order to compete with California. But in reality, the three western states, because of the diversity of what we grow and the specialty crops nature, we kind of stick together. The Midwest in the United States is all about corn, soybeans, beef, and hogs. Here on the West Coast, it's much more diverse and, I like to say, dynamic.
Agriculture in this region could not survive without ports. As my friends at the Port of Portland have learned, my motto is "it's all about agriculture". Ports could not survive without agriculture. So, we are truly inter-related. Agriculture was the backbone of the creation of the port infrastructure. It's still very much a huge part of the port system today. I'll make the argument that agriculture and food exports are going to become an even larger part of port infrastructure going into the future.
In terms of statistics, the farmgate value in Oregon- that's the value of products coming off the farm and ranch- is about 4.1 billion dollars. When you add processing and transportation and the infrastructure that goes along with that, including about 3,000 jobs at the Port of Portland alone due to agricultural exports, agriculture in the State of Oregon represents 10 percent of our gross state economy. Washington's percentage is probably a little higher as is California's. Agriculture is a steady contributor to Oregon's economy. In the last 25 years, we've had 22 years of steady growth- only three years when agricultural production has actually experienced a decline. So agriculture in Oregon and on the West Coast is alive and well, and definitely growing.
Of what we produce in Oregon, 80 percent leaves our state's borders. So we are truly dependent on markets outside the State of Oregon. Of that 80 percent, half moves into an international market. Our top overseas markets are Japan, Taiwan, and South Korea with an exploding Chinese market that we are all paying attention to.
So even though there is this huge buy local and local food movement, we are critically dependent on consumers outside our state's borders and consumers in foreign countries. So again, the role of ports and the port system in enabling agricultural products to move into those international markets is absolutely critical.
Out of Oregon, exports by industry, computers and electronics are far and away the largest in terms of value. They represent a little over 45 percent of the value of Oregon exports. Agriculture and food products are second. We represent second place in terms of value at about 16.5 percent. In terms of volume, agricultural exports are number one. Wheat is up there along with soda ash and potash, and then a whole incredible variety of the products that we grow here in Oregon. Here's part of the list: wheat, barley, potatoes, onions, apples, pears, peas, lentils, hay, and nursery products all move through our port system on the West Coast.
So we in agriculture are very committed to do everything we can to maintain the viability of a port system because it is so important to us.
I want to talk a little bit about the network. Moving products, particularly from the farm to those ultimate end markets, an efficient transportation network is absolutely critical for us. Clearly it is more than just the ports. It's getting the product from trucks from the farm to the processor or the exporter. It's rail, it's barge, it's air, it's ships, it's all those things. We in Oregon are struggling in terms of budgets, like everyone else, because of the economic turndown. But we are committed to making those investments in infrastructure that are absolutely important to keeping that transportation network working efficiently. Whether it's investments at the port, whether it's investments in our rail system, whether it's investments in our roads and trying to get a new bridge across the Columbia River- which is critical for those of you in this region- in order to continue getting product to market is extremely important.
Looking into the future, there are a couple of things that lead me to believe that agriculture is going to grow more and more in terms of importance to ports, and become a more critical component of ports and exports. The first issue is President Obama's export initiative which he announced earlier this year with the goal of doubling exports from the US into the international market. That is music to our ears in terms of agriculture. Exports will continue to be a critical market for us. With that kind of an initiative, I see the increased investment in the transportation system so we can actually achieve that export initiative.
The second piece, when it comes to food in particular- the world's population currently is a little over six billion. All the experts are saying in the next 30 to 40 years, that population will grow to nine billion. That's an additional three billion people living on the face of the Earth. With the amount of land it will take to house those people, and the fact that a lot of that land will come out of agricultural production, with current technology and our current ability to raise crops and food in the world, we cannot feed a population of nine billion in the next 30 years. So we are going to see this incredible growth in farming and production. It will mean new investments in technology. You will probably see more investment in genetically modified food in order to produce more for a growing population. Add the fact that where we are able to grow the food is not necessarily going to be a place where people are living. So more and more, that transportation network and those exports are going to be absolutely critical. I think you will see more exports coming out of the United States into those growing international markets in order to feed the world.
Take China as an example, it currently holds 20 percent of the world's population with seven percent of the world's farmland. The fact that China has been able to feed its own population for as long as it has is a miracle. But what we are seeing now, with the growth in China, the additional loss of farmland, and the rising economy and affluence of the Chinese middle class, they are wanting products more and more higher end products, products like we produce in Oregon and that come from the West Coast. We talk about it almost daily. The big word today is China. That's a huge target for us and one, frankly, that we think we can take advantage of. The Pacific ports network is obviously strategically placed in order to take advantage of that market. Our own Port of Portland and its port networks are focusing on making sure we have ocean carrier service, air service, and all those things that we need to get our products into China. For us, there's huge potential and the place we are going to be in the future.
In terms of the Oregon Department of Agriculture, we spend a lot of time marketing products in international markets as do our partners to the north and south of us. We have affectionately named ourselves COW- California, Oregon, Washington- and we do a lot of joint marketing efforts. Right now we are actively focused, along with our partners in international marketing, on trying to get the Korean Free Trade Agreement ratified through Congress. Free trade agreements for the US are absolutely critical in order for us to compete in an international market. There's a lot of effort on our part- whether it's at the political front or actually being present in markets. We do a lot of joint efforts with the Port of Portland. Having the Port of Umatilla and the Port of Morrow as part of our last trade mission was wonderful. I can see a lot of that in the future as long as you are willing to let us drag you along. It was a great opportunity for all of us.
Let me leave you with some of the challenges I see on the horizon. Again, these are challenges that we are going to have to work together on in order to overcome.
First, environmental issues. You all in the port world are dealing with this on a daily basis and how you can lower your environmental footprint in the work that you do. I think we've all heard the term carbon footprint. Certainly, we in agriculture struggle with that as you in the transportation world do, because it's hard to describe to somebody how shipping products from South America into Oregon could have a smaller carbon footprint than trucking beef from Wallowa County into Portland. In all reality, there are many situations where that is true, but it just does not intuitively make sense to a lot of people. So I think together we need to work on how we tell that message. That's not to say the buy local movement is bad, by any means. Local is very good and it's presented great opportunities for all of us. But at the same time, when you are moving a large quantity of food product to market by ship, your carbon footprint is a lot less than a trucking a container of peaches from Eastern Oregon down into the Willamette Valley.
Those are the kinds of things we must work together on to better tell our story so that people understand just how important maintaining all these markets are for all of us.
The other challenge I think is going to change all of our worlds is climate change. We in agriculture talk about it all the time. For us in this state, and in Washington in particular, water is absolutely critical. Our largest storage mechanism for water that is used in the summer is winter snowfall. The predictions are that winter snowfall and storage will drastically reduce under climate change. Where are we going to store our water and how are we going to continue raising crops with less water? That's another place where genetically modified food comes into play, where we are modifying food crops so they can be raised in more drought-like conditions.
The same is true with transportation and the pressures in terms of climate change. If indeed we are seeing more and more people from Arizona and Southern California move into Oregon, that's going to put a lot of pressure on our farmland and the ability to continue to produce food. It will shift, as well, the whole transportation infrastructure and network.
So there are some challenges on the horizon that we must continue to work together on if we are going to tackle them and be successful in the future. But I'm absolutely convinced that we will be successful. Long into the future. agriculture is going to continue to be just as important to the port system as ports are to agriculture.