G lANNINI- FOUNDATIO N OF AGRICULTURAL I ^ ^ " ^ 1 1 '| UNIVERSITY OF ECONOMICS UNIVERSITY OF CALIFORNIA A Statistical Profile of Horticultural Crop Farm Industries in California Hyunok Lee and Steven C. Blank (^iannini Foundation Research Report 348 July 2004 ,V University of California Agriculture and Natural Resources THE AUTHORS Hyunok Lee is an associate researcher and Steven C. Blank is a Cooperative Extension specialist in the Department of Agricultural and Resource Economics, University of California, Davis. They are both members of the Giannini Foundation of Agricultural Economics. ACKNOWLEDGMENTS The authors want to recognize the contributions of many who helped us with this study. We thank Roberta Cook and Karen Klonsky for their useful comments during the design of the survey questionnaire and War- ren Johnston for providing useful comments for the earlier version of the manuscript. We thank our collaborators from CASS/NASS (California and National Agricultural Statistics Services) — Martha Leighton, Bob Losa, Dwaine Nelson, Jim Tippett, and Vic Tolomeo — who were responsible for data collection and compilation. We also thank graduate research assistants Hyejung Kang and Yunshik Kim, who helped with charts and tables. Thanks to Gary Beall and Jonathan Barker of the UC Agricultural Issues Center, who provided editorial services. We thank William Murphy, leader of the western regional office of the USDA Risk Management Agency (RMA) for assistance and support. Finally, special thanks to RMAs David Fulk and Virginia Guzman, who coordinated this project, and to Daniel Sumner, who helped with comments and suggestions throughout the process. This research was funded by a partnership agreement with the U.S. Department of Agriculture Risk Manage- ment Agency, Agreement 01-IE-0831-092. The images for the cover of this publication were graciously provided by USDAs Agricultural Research Service Photo Unit and photographers Scott Bauer (horticulture, vegetables), Peggy Greb (produce variety), and Keith Weller (peaches). This publication has been anonymously peer-reviewed for technical accuracy by University of California REVIEWED scientists and other qualified professionals. ©2004 by the Regents of the University of California Division of Natural Resources All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written permission of the publisher and the authors. To simplify information, trade names of products have been used. No endorsement of named or illustrated products is intended, nor is criticism implied of similar products that are not mentioned or illustrated. A Statistical Profile of Horticultural Crop Farm Industries in California TABLE OF CONTENTS Executive Summary 1 Farm Size and Regional Profile 1 Crop Diversification 1 Marketing 2 Yield, Price, and Profit Fluctuations 2 Risk Management 2 Crop Insurance 3 Financial Characteristics 3 Introduction 5 Data Collection and Aggregation 7 Data Collection Procedure 7 California Geography and Regional Aggregation 7 Commodity Aggregation 9 Topics Addressed 1 1 Major Survey Results 13 A. Farm Size and Regional Profile 13 B. Crop Diversification 16 C. Marketing 20 D. Yield, Price, and Profit Fluctuations 23 E. Risk Management 26 F. Crop Insurance 28 G. Financial Characteristics 31 Summary and Implications 37 Summary 37 Implications 37 References 39 Appendix 1: Response Rates 41 Appendix 2: Data Tables 45 Appendix 3: Survey Questionnaire 149 Giannini Foundation Research Report 348 FIGURES 1 . Aggregation of Counties into Eleven Regions 8 Al . Distribution by Acreage Class 16 Bl . Shares of Single-Crop Growers for Fruits/Nuts and Vegetables 1 6 B2. Share of Single-Crop Fruit and Nut Growers by Crop 1 8 CI. Use-Type (Processing/Fresh) Distribution 20 C2. Marketing Channels for Processed Crops 21 Dl . Shares of Farms: Largest Yield, Price, and Profit Fluctuation in Last Five Years 24 El . Mean Ranking of Risk Sources in Order of Importance 27 Fl . Mean Ranking of Reasons for Purchasing Crop Insurance 30 F2. Mean Ranking of Reasons for Not Purchasing Crop Insurance 30 Gl . Distribution of Off-Farm Income Share (Year 2001 ) 32 G2. Distribution of Gross Agricultural Sales 34 G3. Mean of Gross Agricultural Sales ($1 ,000) by Off-Farm Income Share 35 TABLES 1. Commodity Aggregations 9 Al . Distributions of Surveyed Farms by Region and Crop Category 13 A2. Distributions of Farms by Crop Category and by Crop 1 4 A3. C umulative Distribution (Percent) of Farms by Acreage Class 14 A4. Comparison of Specialty-Crop Survey (2002) with Census (1 997) Data 1 5 Bl . Diversification Pattern and Mean Acres 17 B2. Diversification Pattern of Growers Who Diversified within Fruits and Nuts 18 B3. Distribution of Vegetable-Only Farmers by the Number of Different Vegetable Crops Grown 19 B4. Distribution of Organic Farms and Mean Acreage 1 9 CI . Selected Marketing Channels for Processed Fruit and Nut Crops 21 C2. Fresh-Use Crops: Number of Grower/Shippers 22 C3. Marketing Channels for Fresh-Use Crops (Grower-Only) 22 Dl . Yield Variation: All-Year Average of Yield Deviation (Percent) from the Five-Year Average 23 D2. Shares of Farms: Main Cause for Lowest Profit by Crop Category, Use, and Grower/Shipper Status 25 El . Mean Ranking of Preference for Risk Management Tools 27 E2. Shares of Farms: Availability and Utilization of Risk Management Tools 28 Fl. History of Crop Insurance Purchases 29 F2. Purchase of Private (Single-Peril) Crop Insurance 29 F3. Mean Ranking of Suggestions to Modify Crop Insurance 31 Gl . Mean Gross Agricultural Sales, Assets, and Debts 33 A Statistical Profile of Horticultural Crop Farm Industries in California APPENDIX DATA TABLES All Crops AII.A1 . Size and Regional Profile - Number of Farms, Average Acres per Farm, and Average Years of Farming by Region and Crop Category 45 AII.A2. Size and Regional Profile - Number of Farms, Average Acres per Farm, and Average Years of Farming by Crop Category/Region 46 AII.B1 . Crop Diversification - Mean Acres in Crop Diversification by Crop Category 47 AII.B2. Crop Diversification - Number of Organic Farms and Average Organic Acres per Farm by Region and Crop Category 48 A1I.C1 . Marketing - Processing versus Fresh Use: Number of Farms by Use and Average Volume Share by Region and Crop Category 49 AII.C2. Marketing - Marketing Channels for Processing-Use Crops: Number of Farms Using Specific Marketing Channels and Average Volume Share for Each Marketing Channel by Crop Category 50 AII.C3a. Marketing - Number of Grower/Shippers (Fresh Only) 50 AII.C3b. Marketing - Number of Grower/Shippers and Volume (Percent) Sold at Predetermined Price by Crop Category 51 AII.C4. Marketing - Marketing Channels of Fresh-Use Crops (Growers Only): Number of Farms Using Specific Marketing Channels and Average Volume Share by Crop Category 51 AII.D1 . Yield, Price, and Profit Fluctuations - Yield Deviation (Percent) from Individual Five-Year Averages: Sample Mean for 1 997-2001 , Sample Mean for 1 999 by Region, and Sample Mean for 1 997-2001 by Crop Category 52 AII.D2. Yield, Price, and Profit Fluctuations - Largest Yield Fluctuation: Number of Farms per Fluctuation Range by Crop Category 53 AII.D3. Yield, Price, and Profit Fluctuations - Main Cause for Lowest Profit by Crop Category, Use, and Grower/Shipper Status (Percent of Farmers Who Answered) 54 All. El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop 55 AII.E2. Risk Management - Ranking of Risk Sources (in Order of Importance): Distribution of Ranks by Risk Source 56 AII.E3. Ranking of Preference for Risk Management Tools: Mean Ranking by Region, Crop Category, Use, and Grower/Shipper Status 57 AII.E4. Risk Management - Rates of Availability and Utilization of Risk Management Tools and Mean Ranking of Preferences 58 AII.E5. Status of Receipt of Government Disaster Payments or Loans by Region and Crop Category 59 AII.F1 . Crop Insurance: Purchase History and Average Number of Purchases for the Last Five Years by Crop 60 AII.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop 61 iii Giannini Foundation Research Report 348 AII.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance by Crop Category and Use 62 AII.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop Category and Use 63 AII.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop 64 AII.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago 65 AII.G1 . Financial Characteristics - Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts: Mean Values by Region and Crop Category 66 AII.G2. Financial Characteristics - Distribution of Gross Agricultural Sales by Region and Crop Category 67 AII.G3. Financial Characteristics - Distributions of Off-Farm Income Shares by Crop Category 68 AII.G4. Financial Characteristics - Distribution of Gross Agricultural Sales by Off-Farm Income Share Class and Acreage Class 69 Fruits and Nuts Fn.Al . Size and Regional Profile - Number of Farms, Average Total Acres per Farm, and Average Fruit/Nut Acres per Farm by Region and Crop 70 Fn.A2. Size and Regional Profile - Distribution of Fruit and Nut Crops by Crop and Region 7] Fn.Bl . Crop Diversification - Distribution of Single-Crop versus Multiple-Crop Growers and Average Fruit and Nut Acres by Diversification Pattern 72 Fn.B2. Crop Diversification - Diversification Pattern for Growers Who Diversified within Fruits and Nuts by Crop . 73 Fn.B3. Crop Diversification - Number of Organic Farms and Average Acres of Organic and Transitional-Organic Fruit and Nuts by Crop 74 Fn.CI . Marketing - Distribution of Use Type (Processing versus Fresh) and Average Volume Share Designated to Specific Use by Crop 75 Fn.C2. Marketing - Marketing Channels for Processing-Use Crops: Number of Farms Using Specific Marketing Channels by Crop 76 Fn.C3. Marketing - Grower/Shippers (Fresh-Use Only): Number of Grower/Shippers and Volume Sold at Predetermined Price by Crop 77 Fn.C4. Marketing - Marketing Channels for Fresh-Use Crops (Growers Only): Number of Farms Using Specific Marketing Channels by Crop 78 Fn.Dl . Yield, Price, and Profit Fluctuations - Yield Deviation (Percent) from Individual Five-Year Averages: Sample Mean by Year (1 997-2001 ) and All-Year Sample Mean by Region and Crop 79 Fn.D2. Yield, Price, and Profit Fluctuations - Yield Deviation (Percent) from Individual Five-Year Averages: All-Year Sample Mean by Crop/Region 80 Fn.D3. Yield, Price, and Profit Fluctuations - Largest Yield, Price, and Profit Fluctuations: Number of Farms in Ranges of Fluctuation by Crop 81 iv A Statistical Profile of Horticultural Crop Farm Industries in California Fn.D4. Yield, Price, and Profit Fluctuations - Main Cause for Lowest Profit by Region, Crop, and Processor Pricing Method (with and without Predetermined Price) 83 Fn.El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop 84 Fn.E2. Risk Management - Ranking of Risk Sources (in Order of Importance): Distribution of Ranks by Risk Source 85 Fn.E3. Risk Management - Rank of Selected Risk Sources That May Be Specific to Region: Mean Ranking by Region 86 Fn.E4. Risk Management - Ranking of Preferences for Risk Management Tools: Mean Ranking by Region and Crop 87 Fn.E5. Risk Management - Availability and Utilization of Risk Management Tools: Rates of Availability and Utilization and Mean Ranking of Preference by Crop 88 Fn.Fl . Crop Insurance: Purchase History and Average Number of Purchases for the Last Five Years by Crop 89 Fn.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop 89 Fn.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance 90 Fn.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop 91 Fn.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop 92 Fn.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago 93 Fn.Gl . Financial Characteristics - Mean Values of Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts by Region and Crop 94 Fn.G2. Financial Characteristics - Distributions of Off-Farm Income Shares and Gross Agricultural Sales 95 Fn.G3. Financial Characteristics - Mean Agricultural Sales, Mean Assets, and Mean Debts by Off-Farm Income Share Class and by Fruit and Nut Acreage Class 96 Vegetables Vg.Al . Size and Regional Profile - Number of Farms and Average Vegetable Acres per Farm by Region and Crop and Distribution of Vegetable Acreage 97 Vg.A2. Size and Regional Profile - Distribution of Vegetable Crops by Crop and Region 98 Vg.A3. Size and Regional Profile - Number of Farms and Average Vegetable Acres per Farm for Selected Major Crops 99 Vg.Bl . Crop Diversification - Diversification Patterns across Crop Categories and Average Acres in Crop Diversification 100 Vg.B2. Crop Diversification - Diversification Patterns (within Vegetables) of Vegetable-Only Farmers: Distribution of Farmers and Average Sales Share by the Number of Vegetable Crops Diversified 101 Giannini Foundation Research Report 348 Vg.B3. Crop Diversification - Number of Organic Farms and Average Vegetable Acres per Farm by Crop 102 Vg.Cl . Marketing - Distribution of Use Type (Processing versus Fresh) and Average Volume Share Designated to Specific Use by Crop 103 Vg.C2. Marketing - Marketing Channels for Processing-Use Crops: Number of Farms Using Specific Marketing Channels and Average Volume Share for Each Marketing Channel by Crop 104 Vg.C3. Marketing - Grower/Shippers (Fresh-Use Only): Number of Grower/Shippers and Volume Sold at Predetermined Price by Crop 105 Vg.C4. Marketing - Marketing Channels for Fresh-Use Crops (Growers Only): Number of Farmers Using Specific Marketing Channels and Average Volume Share by Crop 106 Vg.Dl . Yield, Price, and Profit Fluctuation - Yield Deviation (Percent) from Individual Five-Year Averages: Sample Mean 1997-2001 and All-Year Sample Mean by Region and Crop 107 Vg.D2. Yield, Price, and Profit Fluctuation - Largest Yield, Price, and Profit Fluctuations: Number of Farms per Fluctuation Range by Crop 108 Vg.D3. Yield, Price, and Profit Fluctuation - Main Cause for Lowest Profit by Region, Crop, Use, and Processor Pricing Method (with and without Predetermined Price) 1 10 Vg.El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop 1 1 2 Vg.E2. Risk Management - Ranking of Risk Sources (in Order of Importance): Distribution of Ranks by Crop 1 13 Vg.E3. Risk Management - Ranking of Selected Risk Sources That May Be Specific to Region: Mean Ranking by Region 1 14 Vg.E4. Risk Management - Availability and Utilization of Risk Management Tools: Rates of Availability and Utilization and Mean Ranking of Preference by Crop 115 Vg.E5. Risk Management - Status of Receipt of Government Disaster Payments or Loans by Crop 116 Vg.Fl . Crop Insurance: Purchase History and Average Number of Purchases for the Last Five Years by Crop 1 1 7 Vg.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop 1 1 8 Vg.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance 1 19 Vg.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop 120 Vg.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop 121 Vg.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago 122 Vg.Gl. Financial Characteristics — Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts: Mean Values by Region and Crop 123 A Statistical Profile of Horticultural Crop Farm Industries in California Vg.G2. Financial Characteristics - Distributions of Off-Farm Income Shares and Gross Agricultural Sales 124 Vg.G3. Financial Characteristics - Mean Agricultural Sales, Mean Assets, and Mean Debts by Off-Farm Income Share Class and by Vegetable Acreage Class 125 Ornamentals Or.Al . Size and Regional Profile - Number of Farms and Average Ornamental Acres per Farm by Region and Crop 126 Or.A2. Size and Regional Profile - Distribution of Farms by Region/Crop and by Ornamental Acreage 127 Or.Bl . Crop Diversification - Crop Diversification Patterns and Number of Organic Farms by Crop 1 28 Or.Cl . Marketing - Number of Farms by Use (Processing versus Fresh) and Operation (Grower/Shipper versus Grower Only) 129 Or.Dl . Yield, Price, and Profit Fluctuation - Largest Yield, Price, and Profit Fluctuations for Last Five Years: Number of Farms per Fluctuation Range by Crop 130 Or.D2. Yield, Price, and Profit Fluctuations - Main Cause for Lowest Profit by Region and Crop 131 Or.El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop and Distribution of Ranks by Risk Source 132 Or.E2. Risk Management - Ranking of Selected Risk Sources That May Be Specific to Region: Mean Ranking by Region 133 Or.E3. Risk Management - Preference for Risk Management Tools: Mean Ranking by Region and Crop 134 Or.E4. Risk Management - Availability and Utilization of Risk Management Tools: Rates of Availability and Utilization and Mean Ranking of Preference by Crop 1 36 Or.E5. Risk Management - Status of Receipt of Government Disaster Payments or Loans by Crop 137 Or.Fl . Crop Insurance (Any) Purchase - Purchase History and Average Number of Purchases for the Last Five Years by Crop 138 Or.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop 1 39 Or.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance 139 Or.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop 140 Or.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop 141 Or.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago 141 Or.Gl . Financial Characteristics - Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts: Mean Values by Region and Crop 142 vii Giannini Foundation Research Report 348 Or.G2. Financial Characteristics - Distribution of Off-Farm Income Shares and Gross Agricultural Sales 143 Or.G3. Financial Characteristics - Mean Agricultural Sales, Mean Assets, and Mean Debts by Off-Farm Income Share Class and Ornamental Acreage Class 144 Aquaculture Aq.l . Profile and Marketing - Regional Distribution, Years of Farming, Organic Farms, Number of Farms by Use (Processing versus Fresh), and Marketing Channels 145 Aq.2. Largest Yield, Price, and Profit Fluctuations: Number of Farms by Fluctuation Range 145 Aq.3. Risk Management and Crop Insurance - Risk Sources, Risk Management Tools, Government Disaster Payments and Loans, Reasons for Not Purchasing Crop Insurance, and Suggestions to Modify Crop Insurance 146 Aq.4. Financial Characteristics - Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts 147 viii A Statistical Profile of Horticultural Crop Farm Industries in California EXECUTIVE SUMMARY Horticultural crops provide 60 percent of total farm revenue in California agriculture, and Cali- fornia provides 37 percent of the horticultural crop value in the United States. Clearly, these industries comprise an important part of the agricultural economy. This study provides a detailed statistical profile of California's horticultural crop industries at the farm level, based on a survey of specialty crop growers that was conducted during the spring of 2002. The Risk Management Agency of the United States Department of Agriculture supported the re- search, and the California Office of the National Agricultural Statistics Service helped conduct the sur- vey Specialty crops, also referred to as horticultural crops, include tree and vine (fruit/nut) crops, vegetables, and ornamental crops. The statistical profile of California's horticultural farm industries presented here is the most comprehensive ever undertaken for these industries, drawing on survey data collected from approximately one-third of all horticultural crop producers in the state. Specialty crops are diverse. They differ in their product characteristics, production processes, and market environments. Such heterogeneity extends to risk characteristics of the crops and to the ways farmers cope with various risks. As a preliminary step to development of effective risk management tools, it is important to better understand factors that affect these risks. This report is intended to provide such information to help us understand specialty crop industries, the sources of risk, and behavioral risk responses in these industries. The following summary of results is organized by topic. Farm Size and Regional Profile About 86 percent of the farms surveyed produced primarily (in terms of revenue share) orchard and vine crops, 5 percent produced vegetable crops, and 9 percent produced ornamental crops. About 25 percent of the farms were located in coastal areas, 13 percent in the Sacramento Valley, and 47 percent in the San Joaquin Valley. The remaining 15 percent were in the northern mountain areas, the Sierra Nevada, the Southern coast, and the deserts. Average farm size was 203 acres, but the median farm comprised only 34 acres. There were relatively few very large farms and many very small farms. The average number of acres per farm varied substantially among the three crop categories: fruits/nuts, vegetables, and ornamental crops. The average land holding by vegetable growers, 1,106 acres, far exceeded the average of 157 acres for fruits/nuts and 200 acres for ornamental crops. These land figures include land planted to secondary crops (as well as field crops). When we examined land planted only in primary crops, our data showed that fruit/nut and vegetable farmers held, on average, about 50 percent of their land in primary crops (for definition, see page 7). However, land for ornamental crops, on average, accounted for only 10 percent of the average 200 acres per farm. Crop Diversification Crop diversification has long been recognized as an im- portant risk management tool. Our data showed that crop diversification was much less common for orchard farms than for vegetable farms. About 70 percent of fruit/nut farmers were single-crop growers as opposed to 26 per- cent for vegetable farms. The scope of diversification also differed. Fruit/nut farmers predominantly diversified their crops with other varieties of fruits and nuts; only 20 per- cent of them used crops other than fruits and nuts for diversification. Vegetable farmers, on the other hand, fre- quently used other crops for diversification; only one-third of the vegetable farms were diversified among only veg- etable crops. Our survey also indicated that primary crop acreage increases with crop diversification for both fruit/ nut and vegetable crops. Farms growing five or more veg- etables were, on average, four times larger in vegetable acreage than farms growing a single vegetable crop. In California, 6 percent of specialty crop farmers had some organic or transitional-organic land. In terms of crop category, these farms represented 6 percent of orchard farms, 14 percent of vegetable farms, and 4 percent of ornamental crop farms. Our data showed that these farms also engaged in conventional farming and that they devoted, on average, about one-third of their 1 Giannini Foundation Research Report 348 primary crop lands to organic farming. Judging from acreage assigned to primary crops, the farms were about average in acreage for fruit/nut farms but much smaller than average conventional vegetable farms. Marketing Marketing is an important component of risk manage- ment. Marketing channels vary by product use (processing versus fresh). Processing crops are delivered in bulk directly to processing plants, whereas fresh-use crops are sent to operations to be sorted, packaged, cooled (or refrigerated), and distributed through marketing chan- nels. California producers were highly specialized in terms of use. Most fruit/nut farms produced mainly for pro- cessing use (71 percent) and most vegetable farms produced mainly for fresh use (67 percent). Only 7 per- cent of specialty crop farmers supplied both processing and fresh market outlets. In processed-use markets, contracts played a major role (they were used by 57 percent of fruit/nut farmers and 88 percent of vegetable farmers) with contracts with a predetermined price being the most prevalent form. In fresh-use markets, grower/shippers, which combine the packing/shipping business with field production under one ownership, provide a form of vertically integrated business. Our survey showed that grower/shippers accounted for 13 percent of vegetable farmers and 3 percent of orchard farmers and that they mainly supply mass merchandisers (e.g., discount chains). The other fresh-market growers tended to use diverse marketing channels, including selling directly to consumers, marketing through cooperatives and independent shippers, and selling directly to commercial buyers. For fresh vegetable markets, "directly to consumers" (farmers markets, you-pick operations, roadside stands) was the most commonly used outlet (3 1 percent), not by volume of production but by number of farms using this marketing channel. Yield, Price, and Profit Fluctuations We investigated year-to-year yield variations using yield information for the preceding five years. Taking the av- erage of the five annual yields as an individuals normal yield, we calculated the percent deviation from the nor- mal yield and then arrived at sample mean deviations for sample categories. Our data indicated that annual yield deviated, on average, 15 percent for fruits/nuts and 8 percent for vegetables over the previous five years. For price and profit fluctuations, we elicited information on the range of the highest fluctuation experienced over the same five year period (from the level that the respondent considered normal). For both price and profit, the me- dian of the accumulated distribution fell in the 25-49 percent range for fruits/nuts and the 10-24 percent range for vegetables, indicating that prices as well as profits tend to fluctuate less for vegetables than for fruits/nuts. In response to a list of options as the main cause for the lowest profit, "poor yield," "low market price due to high domestic production," and "low market price due to imports" were the three most often cited causes for all crops except ornamentals. They accounted for 70 per- cent of the responses for fruit/nut and vegetable farmers. For fruit/nut crops, poor yield was the most cited reason for the lowest profit (31 percent), but for vegetables, low market price due to high production was cited most (29 percent), followed by low market price due to imports (21 percent). This underscores the relative importance of production risks for orchard crops and of market risks for vegetable crops. Risk Management Two sources of risk, adverse temperature and output price fluctuation, were listed as most important; input price fluctuation, pests, and disease were considered to be moderately important. Crop insurance was a preferred risk management tool for orchard and vineyard farmers, and crop diversifica- tion was preferred by vegetable and ornamental crop growers. Diversified marketing was reported to be the second most preferred tool for all three crop categories. We also surveyed farmers about the availability of risk management tools. As expected, their preferences were closely linked to availability. The most available tools were crop insurance for orchard crops (49 percent of farmers said it was available to them) and crop diversification for vegetables (40 percent) and ornamental crops (28 percent). Orchard and vineyard farmers reported 2 A Statistical Profile of Horticultural Crop Farm Industries in California relatively limited availability of other risk management tools. Crop Insurance About 53 percent of fruit/nut farmers, 31 percent of veg- etable farmers, and 13 percent of ornamental crop farmers said they had purchased crop insurance in the preceding five years and most of those farmers had purchased it for all five years Single-peril insurance is mostly offered by private firms, most commonly for damage from frost, rain, and hail. This insurance was purchased by about 20 percent of fruit/nut farmers and about 10 percent of vegetable farmers. Many farmers suggested that a higher yield guarantee would improve crop insurance. Further, most farmers strongly suggested the need for crop insurance that com- pensates in value terms, but they expressed no strong preference among compensations based on gross sales, profits, or production costs. Financial Characteristics Financial variables examined were off-farm incomes, gross sales, debts, and assets. Clearly, the portion of house- hold income risk attributable to variation in farm income decreased as the share of off- farm income rose. For our sample, an average of 63 percent of income came from off-farm sources. A sizable segment of farmers, as many as 25 percent, derived less than 1 percent of their in- come from farming in the year sampled. This is consistent with the observation that many of the farms were quite small, many farms operated at a loss in any given year, and there was a relatively large number of so-called "hobby" farms in California. Gross agricultural sales averaged about $0.4 million per farm for the entire sample. Vegetable farms averaged $1.1 million in sales, followed by ornamental crop farms with $0.8 million, and orchard farms with $0.3 million. About 6 percent of fruit/nut farms had sales of more than $1 million, compared to 29 percent for vegetable farms and 13 percent for ornamental farms. Agricultural sales were negatively correlated with off- farm income share and positively correlated with acreage. Revenue per acre decreased as acreage increased. Given that specialty crops vary widely in unit value and in value per acre, this indicated that farms with fewer acres tended to grow crops with a high value per acre. 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 agri- culture 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. 3 Giannini Foundation Research Report 348 A Statistical Profile of Horticultural Crop Farm Industries in California INTRODUCTION 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 Man- agement Agency (RMA) of the United States Department of Agriculture (USDA). This report presents data about horticultural industries in California and about the risk management attitudes, approaches, and needs of farm- ers producing these commodities. Specialty crops are diverse. These crops can best be defined by exclusion — as all agricultural crops exclud- ing grain crops (wheat, barley, rice, corn, etc.), oilseeds (soybeans, rapeseed, etc.), cotton, peanuts, and tobacco. The bulk of specialty crops consist of fruits and nuts, vegetables, and ornamental crops (nursery products, cut flowers, etc.). The industries featured in this study accounted (at the farm level) 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 agri- cultural 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 (1997 Census of Agriculture). In the future, California's horti- cultural 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, oilseeds, 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, oilseeds, and cotton (Sumner and Hart, Lee). Horticultural crops differ from other kinds of crops in their product characteristics, production processes, and market environments and thus in their risk characteris- tics. 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 horticul- tural crops. Unfortunately, while studies on traditional crops abound, little research has been done on horticul- tural crops. The objective of this survey was to generate wide-ranging statistical information that can be used broadly to better understand the horticultural crop in- dustry 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 col- lected 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 (1) summarize the methodology used to collect and tabulate the data; (2) provide an over- view of the seven topics addressed; and (3) 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 nar- rative 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 sur- vey. The second contains data tables organized by commodity category. The tables supplement the infor- mation presented in the narrative section with further disaggregated analysis. The last part of the Appendix pro- vides the actual survey instrument. 5 Giannini Foundation Research Report 348 6 A Statistical Profile oj Horticultural Crop Farm Industries in California DATA COLLECTION AND AGGREGATION Data Collection Procedure The first stage of the study, the survey of specialty crop growers, involved developing a questionnaire. The ques- tionnaire was developed specifically for specialty crop growers based on the format of a survey instrument used previously (Blank and McDonald 1993), with input from RMA and from researchers who conducted an identical study in Florida, Pennsylvania, and New York. The Cali- fornia Agricultural Statistical Service (CASS, which is a regional office of USDAs National Agricultural Statistical Service (NASS)) 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 mini- mum number of acres required for a farm to qualify for the study using information from CASSs database. To be included in the study, a farm had to have at least five acres of perennial crops (mainly tree or vine crops) or at least two acres of annual specialty crops (mainly veg- etables, strawberries, or melons). This limit was designed to exclude very small farms that were unlikely to be com- mercial operations. The acreage criterion was applied to CASS's database, which contains information on more than 60,000 farms in California (the total number of farms and ranches in the state is estimated by USDA at about 80,000). 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 (a 46 percent response rate). Relatively few farmers answered all 25 survey questions, which required responses in 192 cells. Under some "usability" criteria on the completeness of the 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. 2 Among noncrop 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 de- pending on the question being analyzed. Survey responses varied in degree of completeness, and valuable informa- tion could have been lost if only fully completed responses were used. (In Appendix 1, the response rate for each survey question is reported.) Thus, to maintain the maxi- mum sample size, different subsamples were used, depending on the usability and appropriateness of the data provided, in analyzing particular issues. Informa- tion on sample size is included in most of the table presentations. California Geography and Regional Aggregation 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, 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. 1 We identified 12 survey questions that we considered essential. To be considered complete, a survey had to provide answers to those questions. (If a question asked the respondent to rank choices, we considered the question answered if the respondent provided a rank for at least three items). We established these criteria to minimize unnecessary data entry effort. 2 USDAs broad definition of specialty crops includes commodities in aquaculture and apiculture. Thus, our original data observations included a small number of these noncrop producers. To keep the consistency of land-based crop data, we excluded these noncrop commodities from our main data analysis (as reported in the narrative analysis). Further, to restrict the focus to specialty crops, observations were excluded if the largest revenue crop was a field crop. Giannini Foundation Research Report 348 Figure 1 . Aggregation of Counties into Eleven Regions Region 1 : Far North Eight counties: Del Norte, Humboldt, Siskiyou, Trinity, Shasta, Modoc, Lassen, and Plumas. Region 2: North Coast Five counties: Mendocino, Lake, Napa, Sonoma, and Marin. Region 3: Central Coast - North Eight counties: Contra Costa, Alameda, San Francisco, San Mateo, Santa Clara, Santa Cruz, San Benito, and Monterey. Region 4: Central Coast - South Three counties: San Luis Obispo, Santa Barbara, and Ventura. Region 6: Sacramento Valley Nine counties: Tehama, Glenn, Butte, Colusa, Yolo, Sutter, Yuba, Solano, and Sacramento. Region 7: San Joaquin - North Three counties: San Joaquin, Stanislaus, and Merced. Region 8: San Joaquin - Central Two counties: Madera and Fresno. Region 9: San Joaquin - South Three counties: Kings, Tulare, and Kern. Region 10: Sierra Nevada Eleven counties: Sierra, Nevada, Placer, El Dorado, Amador, Inyo, Alpine, Calaveras, Tuolumne, Mariposa, and Mono. Region 1 1 : Desert Three counties: San Bernardino, Riverside, and Imperial. Region 5: South Coast Three counties: Los Angeles, Orange, and San Diego. (Johnston, http://geoimages.berkeley.edu/GeoImages/ BainCalif/CalClickMap.html). Climates in the region are affected by the cool cur- rents 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 (November through March). The majority of California's water sup- ply 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 wa- ter storage and distribution systems (Parker and Howitt). California has 58 counties. In our analysis, we aggregated the counties into 11 regions with similar 8 A Statistical Profile of Horticultural Crop Farm Industries in California geographic and climatic characteristics as shown in Figure 1 . The Sacramento Valley and San Joaquin Valley (Regions 6-9) are together referred to as the Central Valley. Commodity Aggregation California's specialty crops include more than 200 individual crops. To facilitate a manageable analysis, crop aggregation was needed. Crop codes were developed using three levels of classification. First, all the commodities were assigned to one of five basic categories: (1) field crops, (2) fruits and nuts, (3) vegetables, (4) ornamental crops, and (5) noncrop commodities. The Table 1 . Commodity Aggregations 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 (such as berries). 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 Category Field Crops (F) Fruits and Nuts (Fn) Vegetables (Vg) Subcategory Specific Crop Ornamentals (Or) Aquaculture (Aq) Field Grains Berries Citrus Grapes Nuts Apples and Pears Stone Fruits Tropicals Botanical Name VI: Legumes Allium^ V2: Brassicas Chenopods Composites V3: Cucurbits V4: Solanaceous V5: Succulents Umbells V6: All Unspecified Vegetables Floriculture, Nursery, Aquaculture Rice, wheat, corn, rye, barley, tricale, etc. Strawberries, blueberries, raspberries, etc. Oranges, tangerines, grapefruits, lemons, etc. Wine grapes, table grapes, raisin grapes Other grapes (use not specified) Almonds, walnuts, pistachios, other tree nuts Apples, pears Apricots, cherries, nectarines, peaches, plums, prunes, pluots Avocados, olives, other (bananas, cherimoya, dates, figs, guavas, kiwifruit, loquats, mangos, jujube) Beans, peas, various sprouts Garlic, leeks, onions, shallots Cabbages, argula, kale, mustard greens, cauliflower, broccoli, Brussels sprouts, radishes, turnips, etc. Chard, spinach, beets, sugar beets, etc. Lettuces, endive, chicory, artichokes, etc. Cucumbers, gourds, melons, pumpkins, etc. Tomatoes, peppers, eggplants, tomatillo Asparagus, mushrooms, etc. Celery, parsley, herbs, carrots, etc. Christmas Trees 9 Giannini Foundation Research Report 348 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 (e.g., cool weather versus warm weather vegetables) and by the number of observations available. 10 A Statistical Profile oj Horticultural Crop Farm Industries in California TOPICS ADDRESSED '"T" > he narrative and tables are presented in seven J. topical sections. ■ farm size and regional profile ■ crop diversification ■ marketing ■ yield, price, and profit fluctuations ■ risk management ■ crop insurance ■ financial characteristics Farm Size and Regional Profile discusses regional dis- tributions of production for commodity categories and subcategories. It also provides mean acreage and acreage distributions. Mean acreages have relatively large stan- dard deviations. To supplement this information, the distribution of farmers by acreage class has been included. Information provided on this topic pertains to Questions 1 through 6 (Cells 1-48). Crop Diversification provides information on patterns of crop diversification across crop categories and subcat- egories. For example, do farmers of perennial crops diversify into annual crops in the same way that annual crop farmers diversify into perennial crops, or do they tend to diversify within the same crop category? This section also includes information on organic farming. In- formation provided in this section was obtained primarily from Questions 4 and 5 (Cells 5-47). Marketing issues include whether a crop is designated for processing or fresh use, the types of marketing chan- nels used, and whether a farmers operation involves both growing and shipping or growing only. Marketing chan- nels typically differ according to end use (processing versus fresh). Whether an operation grows and ships or only grows concerns crops intended for fresh use only; shipping and packaging are not issues for crops destined for processing, which are typically delivered to the plants in bulk. This section also explores the issue of whether price is predetermined through a contract before the time of sale. This section pertains to Questions 6, 7, and 8 (Cells 48-63) in the survey. Yield, Price, and Profit Fluctuations for the preceding five-year period were explored next. Respondents were asked to provide actual yields for those five years; iden- tify the highest fluctuation in yield, price, and profits during the same period; and indicate the main cause for their lowest profits. From this information, we examined fluctuation patterns that could exist specific to a region or crop category and linked the information with the main source of the lowest profit. Information presented for this topic was obtained from Questions 9, 10, and 11 (Cells 64-100). Risk Management examined farmers' perceptions of risk and, in particular, the extent to which risk management tools are available and used. Respondents were asked to rank ten risk sources in order of importance and eight risk management tools in the order of preference. For each risk management tool, the survey also asked about its availability and whether it had been used by the farmer. Also included was information on their receipt of gov- ernment disaster payments or loans. This section used data from Questions 12, 13, and 14 (Cells 101-152). Crop Insurance was one of the risk management tools covered in the previous section, but it was then given more extensive coverage. This section summarized in- formation on respondents' history of crop insurance purchases, reasons why they did or did not purchase crop insurance, and suggestions for improving the role of crop insurance. Information presented includes the mean rank- ing and distribution of ranks. The relevant survey section for this data was Questions 15 through 22 (Cells 153- 188). Financial Characteristics deals with off-farm income, gross agricultural sales, assets, and debts to provide the distributions of these variables and examine the exist- ence of any systematic distribution patterns. Questions 23, 24, and 25 (Cells 189-192) in the survey were rel- evant to this section. 11 Giannini Foundation Research Report 348 A Statistical Profile of Horticultural Crop Farm Industries in California MAJOR SURVEY RESULTS To highlight the results, we limited our analysis to the three primary crop categories — fruits/nuts, veg- etables, and ornamental crops. The basic data set used in this analysis included only specialty crop farmers by ex- cluding respondents whose primary commodity (Cell 48) was listed as a noncrop or a field crop. (Appendix 2 in- cludes a section dealing with aquaculture.) With this exclusion, our basic data set consisted of 10,200 obser- vations. Note, however, that much smaller samples were used in the analysis of many of the issues (observation numbers are indicated in the tables and figures). 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. A. Farm Size and Regional Profile 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 (USDA 1999) to il- lustrate the representativeness of the farms surveyed. Table Al presents the share of farms and mean acres per farm by region and by crop category. Standard deviations are pro- vided 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 com- prised a substantial portion of the states 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 repre- sented about 86 percent of the sample; therefore, any data analysis on all crops tends to be domi- nated by the characteristics of fruit and nut farms. As shown in Table Al, mean acres varied consider- ably across crop categories but much less across regions. The average acreage for vegetable farms (1,106 acres) 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 (except for the mountainous Sierra Nevada region). The standard deviations for all acreage distributions re- ported in Table Al 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 (i.e., the coefficient of variation or CV) was calculated. The CV was seven for the whole sample and much higher in some regions. The South Coasts CV of 15 was the largest. Of the crop cat- egories, ornamentals had the largest variation in acreage. Table A2 provides the distribution of farms across finer crop classifications (subcategories) for each of the three Table Al . Distributions of Surveyed Farms by Region and Crop Category Distribution Mean Acres Standard per Farm Deviation All n = 10,200 203 1,412 By Region Far North 1% 121 367 North Coast 12% 100 420 Central Coast - North 5% 248 991 Central Coast - South 8% 132 534 South Coast 8% 274 4,128 Sacramento Valley 13% 280 916 San Joaquin - North 17% 185 754 San Joaquin - Central 17% 208 819 San Joaquin - South 13% 268 1,263 Sierra Nevada 2% 62 133 Desert 4% 149 614 By Crop Category Fruits and Nuts 86% 157 676 Vegetables 5% 1,106 4,944 Ornamentals 9% 75 522 Giannini Foundation Research Report 348 Table A2. Distributions of Farms by Crop Category and by Crop Crop Category Distribution Fruits and Nuts Berries 2% Citrus 12% Grapes 33% Nuts 31% Apples and Pears 2% Stone Fruits 9% Tropicals 11% Vegetables VI: Beans, peas, garlic, onions, leeks 12% V2: Lettuce, cabbages, other leafy 16% vegetables, broccoli, cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, other 15% gourd family V4: Tomatoes, peppers, eggplants, 31% tomatillo V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs 15% V6: Other unspecified vegetables 12% Ornamentals Floriculture 24% Nursery 67% Christmas Trees 9% main crop categories. Observations were classified into a subcategory based on farmers' responses on their pri- mary 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 or- namental farms. While almost one-third of vegetable farms grew tomatoes (for both fresh and processed use), 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 acre- age was between 2 1 and 30 acres for fruits/nuts and about 70 acres for vegetables. The same distributions are pro- vided pictorially in Figure Al. 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. However, what is unusual in Figure Al is the relatively high density observed near the tails of the distributions, at acreage ranges of 101-300 for fruits/nuts (17 percent) and of 201 acres or more for vegetables (38 percent). Nevertheless, fruits/nuts and vegetables showed very different patterns in the very large acreage classes — only 3 percent of fruit/nut farms in the sample were larger than 500 acres, compared to 24 percent of vegetable farms. Finally, the survey data were compared with data from the 1997 Census of Agriculture conducted by USDA to examine how closely the survey represented the overall population of growers. Table A4 presents selected summary statistics from both sources. Given that vegetable farmers in our survey represented 5 percent of respondents but were 8 percent of farmers in the census, Table A3. Cumulative Distribution (Percent) of Farms by Acreage Class Acres Fruits and Nuts Vegetables Acres Fruits and Nuts Vegetables 0-10 22% 28% 71-80 76% 53% 11-20 42% 39% 81-90 78% 53% 21-30 51% 42% 91-100 80% 56% 31-40 61% 44% 101-200 89% 62% 41-50 66% 46% 201-500 97% 76% 51-60 70% 48% 501-1,000 99% 88% 61-70 73% 50% 1,000 and £ ;reater 100% 100% The primary crop was defined in the survey as the crop for which the farmer had the highest percentage of sales. A Statistical Profile oj Horticultural Crop Farm Industries in California Table A4. Comparison of Specialty-Crop Survey (2002) with Census (1997) Data Census Specialty Crop Survey General Characteristics Number (Share) Number (Share) No. of Farms All Crop Categories 43,055 (100%) 10,200 (100%) Fruits and Nuts 35,422 (82%) 8,785 (86%) Vegetables 3,348 (8%) 459 (5%) Ornamentals 4,285 (10%) 965 (9%) Mean Acres per Farm 3 Fruit and Nut Land per Fruit and Nut Farm 117 110 Vegetable Land per Vegetable Farm 550 477 Ornamentals Land per Ornamentals Farm 46 75 Mean Sales per Farm 3 Fruits and Nuts ($1,000) 221 330 Vegetables ($1,000) 1,201 1,112 Ornamentals ($1,000) 516 814 No. of Farms with Sales of $50,000 or More 3 Fruits and Nuts 14,216 (40%) 3,798 (43%) Vegetables 2,458 (73%) 299 (65%) Ornamentals 1,922 (45%) 471 (49%) Distribution by Acreage Class Acreage Class Fruits and Nuts Vegetables Ornamentals Census Survey Census Survey Census Survey 1-9 30.4% 21.5% 31.4% 28.4% 58.1% 75.7% 10-49 39.7% 44.2% 21.2% 17.8% 29.6% 16.3% 50-69 5.9% 7.2% 3.9% 3.6% 2.8% ] 3.51% 70-99 5.8% 7.1% 3.6% 5.9% 2.1% 100-499 14.6% 16.6% 16.5% 20.1% 5.6% 500-999 2.1% 2.1% 9.2% 12.4% 1.1% | 3.59% 1000 and more 1.6% 1.3% 14.2% 11.7% 0.8% ' Even though our basic sample consisted of 10,200 observations, the calculations of mean acres and mean sales used subsets of the basic sample because some observations had incomplete information on crop-specific acreage and sales data. Source for census data: www.nass.usdu.gov/census/census97/volumcl/us-51/us2_o2.pii/. our sample tended to under-represent vegetable farmers. The acreage class distribution indicated that this under- representation was especially noticeable in the largest acreage class. We had a very close match with the census data for fruits/nuts, indicated by mean acres, mean sales, and acreage distributions. For ornamental crops, the sample appears to have a higher representation of farmers with relatively small acreage than does the census, as indicated by the distribution by acreage class presented at the bottom of the table. 15 Giannini Foundation Research Report 348 Figure Al . Distribution by Acreage Class 0-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91- 101- 201- 501- 1,001 + acres 100 200 500 1,000 Vegetables 0-10 11-20 21-30 31^0 41-50 51-60 61-70 71-80 81-90 91- 101- 201- 501- 1,001+' acres 100 200 500 1,000 B. Crop Diversification Crop diversification is well recognized as a risk manage- ment tool (Blank 1996; Boehlje and Lins; Pope and Prescott). However, little information is available con- cerning the extent of diversification or the mix of crops used in diversification by horticultural producers. As a risk-reducing tool, crop diversification plays a role in pricing crop insurance and is likely to be incorporated as a discount factor in future crop insurance premiums. To implement degree of diversification into the crop in- surance premiums structure, decision makers need to know the extent to which crops have been diversified. This section sheds some light on the issue. Figure Bl shows the share of fruit/nut and vegetable farmers who grew a single crop. Seventy percent of fruit/ nut farmers were single-crop growers as opposed to 26 Figure Bl . Shares of Single-Crop Growers for Fruits/Nuts and Vegetables Vegetables Fruits and Nuts 60% 70% 80% L6 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Bl . Diversification Pattern and Mean Acres 5 rictrc r\\ Farm c \4 p 'A n Arrps npr Farm Fruits and Nuts (n = 8,669)' Average Acres in Fruits and Nuts No Diversification (Single Crop) 70% 67 Diversification Diversified Only with Fruits/Nuts (Average No. of Crops = 2.56) 24% 225 Diversified with Non-Fruits/Nuts (Field, Vegetable, and/or Ornamentals) 6% 159 Vegetables (n = 437) 1 Average Acres in Veeetahle^ • No Diversification (Single Crop) 26% 299 Diversification Diversified Only with Vegetables (Average No. of Crops = 3.59) 26% 632 Diversified Only with Field Crops 26% 547 Diversified Only with Fruits and Nuts 11% 144 Diversified with Field Crops and Fruits and Nuts 9% 842 Diversified with Ornamental Crops and Other 2% 15 * The number of observations, n = 8,669, is less than the total number of basic observations, n = 8,785 (reported in Table A4) because some observations had incomplete information for acreage and diversification. The same is true for vegetables. Of the 459 vegetable farms used in the basic set, data for 437 farms included complete diversification information. percent of vegetable farmers. This implied that crop di- versification was more common for vegetable growers than for fruit/nut growers, which was consistent with our expectation that diversifying into multiple crops is more manageable for annual crops than for perennial crops. The tendency toward single-crop production, however, varied by crop. For example, for fruits/nuts the share of single -crop farmers ranged between 35 and 83 percent, depending on the crop. As shown in Figure B2, grapes were most commonly a single crop (83 percent), while stone fruits were least frequently so (35 percent). Table Bl presents the diversification patterns and mean acreages. The patterns and extents of diversification for fruit/nut and vegetable farms were very different. Of the 30 percent of fruit/nut farms that were diversified, most (26 percent) were diversified with other fruit/nut crops. However, of the 74 percent of diversified vegetable farms, only 26 percent were diversified using other vegetable crops; 48 percent were diversified with crops in other categories. This indicated that fruit/nut farmers rarely diversify into other crop categories and that diversification across crop categories is more common for vegetable farms, particularly with field crops. Furthermore, even among the growers who diversified within their own crop category, the scope of diversification was smaller for fruit/nut farming, as indicated by the average number of crops, 2.56 for fruits/nuts and 3.59 for vegetables (Table Bl). Table Bl also presents mean acreages. Note that the acreage figures in the table are for land that was planted in fruits/nuts or vegetables only. We did this to exclude often extensive field-crop areas and to examine the scale of farmers' operations for their primary crops relative to various patterns of crop diversification. A cursory obser- vation of the acreage figures indicated that primary crop acreage increased with crop diversification for both fruits/ nuts and vegetables (Pope and Prescott). Also, farms that diversified within a crop category were relatively large. We revisit this issue with more detailed vegetable data later in this report. Table B2 shows the pattern of crop mix for fruit/nut farms, which are diversified predominantly with other fruit/nut crops. The table lists the two types of crops most commonly used for diversification in each subcategory. Judging by the percent of farmers, growers of berries, citrus, stone fruits, and tree nuts have made substantial 17 Giannini Foundation Research Report 348 use of same-category crop diversification. For tree nuts and stone fruits, the diversification patterns were sym- metric with substantial cross-diversification between the two groups. The diversification trends for citrus and tropi- cal crops were interesting. While 66 percent of sampled tropical crop growers diversified with citrus, only 28 per- cent of citrus farmers (their primary crop was citrus) diversified with tropical crops (60 percent diversified within citrus). We now turn to vegetables. Table B3 summarizes the pattern of diversification for farmers who grew only vegetables (about half of the vegetable farmers) and shows the distributions of those farmers by the number of vegetables grown. While half of the vegetable-only farmers produced a single crop, 9 percent produced more than six different vegetable crops. When we shifted from all vegetables to the subcategories, diversification patterns varied considerably. This was illustrated with Groups V2 and V5, which showed the highest and lowest levels of diversification. Table B3 also provides mean vegetable acreages for vegetable-only farmers. There was a tendency for farmers with more acres of vegetables to grow a larger variety of vegetable crops, suggesting that large-scale commercial farms engaged in more diversified vegetable production. In other words, the "scope" of diversification was positively related to the scale of the operation. This report does not include a discussion of crop diversification for ornamental crops because of a lack of information. The finest level of diversification we could investigate with the data for ornamental crops was Table B2. Diversification Pattern of Growers Who Diversified within Fruits and Nuts Primary Crop Catpfrorv of Crnrm Used to Diversify ^hilTf* ftf Total Farms Berries Berries 41% Stone Fruits L"! 10 Citrus Citrus 60% Tropicals ZO70 Grapes Stone Fruits 31% IN ULS 11 10 Nuts Nuts 41% Stone Fruits 27% Apples and Pears Apples and Pears 23% Stone Fruits 23% Stone Fruits Stone Fruits 52% nuts 30% Tropicals Tropical Crops 14% Citrus 66% diversification patterns across the three subgroups in the category: floriculture, nursery products, and Christmas trees. Our data indicated that ornamental growers rarely diversified across these groups. Organic farming information is summarized in Table B4. The table combines acres of "organic" and "transitional-organic" plantings and presents the combined area as "organic acreage" (to be certified as organic, land must have been under organic practices Figure B2. Share of Single-Crop Fruit and Nut Growers by Crop -i 1 r 10% 20% 30% 40% 50% 60% 70% 80% 90% 1 8 A Statistical Profile oj Horticultural Crop Farm Industries in California Table B3. Distribution of Vegetable-Only Farmers by the Number of Different Vegetable Crops Grown Six or Number of Vegetables Grown One 3 Two Three Four Five More All Vegetables n = 228 (100%) 49% 18% 9% 10% 5% 9% Mean Vegetable Acres 299 455 321 483 1,280 1,065 By Crop VI: Beans, peas, garlic, onions, leeks 50% 31% 4% 8% 8% 0% V2: Lettuce, cabbages, other leafy vegetables, 18% 18% 11% 21% 8% 23% broccoli, cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, other gourd 58% 19% 12% 8% 0% 4% family V4: Tomatoes, peppers, eggplants, tomatillo 22% 38% 19% 5% 8% 8% V5: Carrots, celery, asparagus, mushrooms, 77% 3% 3% 3% 5% 5% parsley, other herbs V6: Other unspecified vegetables 90% 3% 3% 5% 0% 3% a Where the number of vegetables grown is listed as one, the farm grew only a single crop with no diversification. Table B4. Distribution of Organic Farms and Mean Acreage Porr on) , , t Mean Acres per Organic Farm Farms with Total Land Land in Total Number Organic in Primary Organic of Farms Land Crops Crops Fruits and Nuts Fruit and Nut Acres All Fruit and Nut Crops 8,790 6% 146 45 By Crop Berries 144 15% 70 19 Citrus 1,021 6% 358 32 Grapes 2,887 5% 151 66 Nuts 2,776 5% 66 40 Apples and Pears 218 17% 58 37 Stone Fruits 798 5% 187 44 Tropicals 946 7% 160 34 Vegetables Vegetable Acres All Vegetable Crops 443 14% 153 66 By Crop VI: Beans, peas, garlic, onions, leeks 51 6% 1 3 L3 V2: Lettuce, cabbages, other leafy vegetables, 71 21% 350 75 broccoli, cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, other bl 9% 18 20 gourd family V4: Tomatoes, peppers, eggplants, tomatillo 137 13% 395 66 V5: Carrots, celery, asparagus, mushrooms, 65 12% 22 14 parsley, other herbs V6: Other unspecified vegetables 52 27% 120 119 19 Giannini Foundation Research Report 348 for three years, and during that three-year period, the land is referred to as transitional-organic land). Table B4 shows that 14 percent of vegetable growers practiced organic farming, compared to 6 percent of fruit/nut growers, although organic fruit/nut farms were more numerous. Most organic farmers also grew conventional crops and, on average, they devoted more land to conventional production than to organic production. C. Marketing This section summarizes the survey results on types of output use (i.e., processing or fresh), marketing chan- nels, and types of operations (e.g., vertical integration into a packing/shipping business). Figure CI shows the distribution of farmers by type of use for their fruits/nuts and vegetables (ornamentals are supplied almost exclu- sively for fresh use). The two types, "mainly fresh" and "mainly processing," were defined to include cases in which more than 80 percent of output volume was des- ignated to the listed use. For fruits/nuts, 71 percent of farmers were characterized as mainly processing and 23 percent as mainly fresh. These figures were almost re- versed for vegetables — 67 percent of vegetable farmers specialized in fresh-use crops and 26 percent in process- ing-use crops. For both fruits/nuts and vegetables, only 7 percent of farms supplied both fresh and processing uses (a minimum of 20 percent of their volumes went to each use). This implied that production of fruits/nuts and of vegetables in California tends to be specialized for ei- ther processing or fresh use. 4 Also, these figures were consistent with the common observation that, for both vegetables and fruits/nuts, specific uses dictate the vari- eties grown. For example, Cling peaches are typically destined for canning and the Roma variety of tomatoes is usually made into paste. Relevant marketing channels are determined by whether the crop goes to the fresh market or for process- ing since the two uses require different postharvest handling techniques. Once harvested, processing crops are shipped directly to a processing plant. Fresh-use crops are usually sorted, packed, and refrigerated before being shipped to wholesale or retail buyers. This implies that Figure CI . Use-Type (Processing/Fresh) Distribution Fruits and Nuts Mainly Fresh 23% Processing/Fresh 7% Mainly Processing 71% Vegetables Mainly Fresh 67% Processing/Fresh 7% Mainly Processing 26% specific marketing channels emerge to accommodate the postharvest handling required for each use. Figure C2 lists the marketing channels available for processing crops and the share of farms that used those channels. For fruits/nuts, marketing cooperatives and contracts with a processor (both with and without a pre- determined price) were the most widely used marketing channels, accounting for 90 percent of the farms. How- ever, for processed vegetables, marketing cooperatives played a relatively small role. Instead, contracts with a processor arranged at a predetermined price predomi- nated. While contracts with processors were an important marketing avenue for both the fruit/nut and the vegetable categories, the patterns of pricing arrangements with pro- cessors were distinctly different. For fruits/nuts, contracts with and without predetermined prices were almost equally important (31 percent and 26 percent), whereas for processed vegetables, contracts with processors were mostly arranged under predetermined prices (68 percent versus 20 percent). We further investigated the case of tree nuts (for which use is not immediately clear). Ninety-three percent of tree nut farmers reported that all of their crops were designated for processing and only 4 percent of tree nut farmers reported mainly fresh use (for more detail, see Table Fn.Cl in Appendix). 20 A Statistical Profile oj Horticultural Crop Farm Industries in California Figure C2. Marketing Channels for Processed Crops Fruits and Nuts Marketing Cooperative With Predetermined Price" Without Predetermined Price" Participation Plan | 1% Spot Market | Other Vegetables Marketing Cooperative With Predetermined Price" Without Predetermined Price" Participation Plan Spot Market Other * The pricing method was arranged through a contract with a processor. Note: The percentage sum over all marketing channels exceeded 100 percent because some farmers use multiple channels 35% 80% Table CI . Selected Marketing Channels for Processed Fruit and Nut Crops 3 Specific Marketing Channels Total Observations Marketing Cooperative Sold to a Processor under Contract with a Predetermined Price Sold to a Processor under Contract without a Predetermined Price Citrus 150 53% 9% 30% Grapes 2,548 17% 52% 19% Nuts 2,447 51% 11% 33% Apples and Pears 55 13% 38% 27% Stone Fruits 373 36% 35% 23% Tropicals 349 26% 36% 29% a Data include farms where processing use was greater than 80 percent of volume. Given the importance of processing use for fruits/nuts, we further investigated their marketing channels by disaggregating the category and looking at subgroups of the crop, as shown in Table CI. Marketing patterns were substantially different for specific subgroups. Cooperatives were especially important for citrus crops (53 percent of citrus growers used cooperatives) and tree nuts (5 1 percent), and predetermined price contracts were particularly prevalent for grapes (52 percent). The bulk of the grape growers produced wine grapes and, according to a recent survey, 90 percent of wine grape growers in California have either written or oral contracts with 21 Giannini Foundation Research Report 348 Table C2. Fresh-Use Crops: Number of Grower/Shippers Total No. of Farms Supplying Share of Farms That Share of Farms That Fresh Use Crops Are Grower/Shippers Are Growers Only Total 2,772 9% 91% Fruits and Nuts 2,462 3% 97% Vegetables 310 13% 87% wineries (Goodhue et al.). Overall, the data in Table CI underscored the prevalent role of contracts in the processed fruit/nut industry. For vegetables, crop-specific marketing channels did not deviate much from the overall marketing pattern reported in Figure C2 and disaggregated information is not presented here. Postharvest handling is a crucially important component in marketing fresh-use crops. Thus, large commercial growers sometimes integrate field production with postharvest packing and shipping activities under the same owner. These growers are often referred to as grower/shippers (as opposed to growers only). Table C2 indicates that 9 percent of the fresh-use growers who responded to the survey were grower/shippers. The vegetable industry had the largest proportion of grower/ shippers (13 percent); next was the ornamental industry (11 percent), followed by fruit/nut operations (3 percent). There is no parallel notion of postharvest handling for ornamentals and, thus, the remainder of the grower/ shipper discussion mostly relates only to fruits/nuts and vegetables. Grower/shippers operate on large scales and usually supply large-scale buyers such as grocery chains and mass-merchandisers (discount stores), often at a pre-ne- gotiated price. Negotiating the price before market conditions are known has important implications for price risk. Even though the net effect of prefixing the price depends on the structure of market power, a contract with a fixed price tends to reduce price risk. Our survey indicated that 51 of 75 fruit/nut grower/shippers sold, on average, 85 percent of their products at a predeter- mined price. However, for vegetables, the data indicated that only one grower/shipper sold product at a predeter- mined price. Table C3. Marketing Channels for Fresh-Use Crops (Grower-Only) a Distribution of Farmers Using Specific Marketing Channels b Independent Direct to Total Direct to Marketing Shipper/ Commercial Observations Consumers Cooperatives Brokers Buyers Other Fruits and Nuts All Fruit and Nut Crops 2,311 10% 35% 40% 11% 4% By Crop Berries 112 19% 11% 48% 20% 3% Citrus 785 5% 54% 30% 9% 2% Grapes 167 8% 16% 43% 17% 16% Nuts 222 15% 41% 28% 13% 3% Apples and Pears 139 32% 11% 42% 14% 2% Stone Fruits 353 10% 8% 68% 10% 4% Tropicals 533 7% 39% 38% 11% 4% Vegetables All Vegetable Crops 327 31% 6% 31% 28% 4% a The percentages in this table are based on farmers who were growers only (i e,, excluded grower/shippers) and produced fresh use crops. The row sum may exceed 100 percent because some fa -mers use more than one marketing outlet- 22 A Statistical Profile of Horticultural Crop Farm Industries in California While grower/shippers typically supply their crops directly to large retailers or wholesalers, the grower-only group tends to market its crops through contracts with shippers or other means. As shown in Table C3, the two major outlets for fruits/nuts are marketing cooperatives and independent shipper/brokers. On the other hand, for vegetables, cooperatives have a minor role, and ma- jor roles are played by three marketing channels: direct marketing to consumers (e.g., farmers markets, roadside selling, you-pick operations), independent shipper/bro- kers, and direct marketing to commercial buyers. Comparing marketing channels between processed and fresh-use crops, two observations stand out. With no single dominant marketing channel, fresh-use crops are generally marketed through various channels. Nev- ertheless, for fruits/nuts, the importance of cooperatives is significant — cooperatives are widely used in market- ing both fresh and processed fruits/nuts. D. Yield, Price, and Profit Fluctuations Production risk is closely linked to yield risk (Smith and Mandac). As a way to measure yield risk, fluctuations in yields were investigated. The survey asked for information on actual annual yields from 1997 to 2001, and complete five-year yield data were obtained from about 45 percent of the respondents (46 percent of fruit/nut growers and 42 percent of vegetable growers). Using the five-year yield data, average yield deviations in percentage were calculated and are reported in Table Dl. To arrive at average yield deviations, for each observation we first calculated the simple average using the five-year yields. The percentage deviation from the average yield was then computed for each year (absolute values were used for calculating percentage deviations). The all-year average deviation was the average of the five-year yield deviations. Table D 1 presents the sample mean of all-year deviations by crop category and by crop-specific group. (Yield measurement is not relevant to ornamental crops so that category was not included in the table.) The mean values of the all-year deviations indicated that vegetable yields fluctuated less (8 percent) than fruits/nuts in aggregate (15 percent). This was consistent with our intuition. Unlike many perennial crops, vegetables have short growing seasons. In California, they are planted and harvested continuously throughout the year, which results in relatively smooth yield fluctuations on an annual basis. Crop-specific deviations are also presented in Table Dl (no particular regional patterns were found). Except for tropical and V5 crops (carrots, celery, asparagus, mushrooms, and herbs), the deviations tended to be around the mean. We also investigated the deviation at the regional level. No particular regional pattern was observed for fruits/nuts. For vegetables, less variation was observed in all of the coastal areas except the north coastal region (for further information, see the table labeled AUDI in Appendix 2). 5 Table Dl . Yield Variation: All-Year Average of Yield Deviation (Percent) from the Five-Year Average 2 Yield All V , Ait- Year Dpviation \_J v.. v m 1 1 v/ 1 i Mean b All Fruit and Nut Crops n = 4,057 15% Berries 10% Citrus 15% Grapes 13% Nuts 16% Apples and Pears 15% Stone Fruits 16% Tropicals 21% All Vegetable Crops n = 195 8% VI: Beans, peas, garlic, onions, 9% leeks V2: Lettuce, cabbages, other leafy 6% vegetables, broccoli, cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, other 9% gourd family V4: Tomatoes, peppers, eggplants, 7% tomatillo V5: Carrots, celery, asparagus, 12% mushrooms, parsley, other herbs V6: Other unspecified vegetables 6% a Data include only the observations that included yields for all five years. b Yield deviations were calculated by taking absolute value. 5 Given that only half of the sample provided the five-year yield information, we examined the possibility of selectivity problems related to this subsample by performing a cross-check of the data. We did not find any selectivity, at least from the data distributional characteristics. 2 3 Giannini Foundation Research Report 348 Figure Dl . Shares of Farms: Largest Yield, Price, and Profit Fluctuation in Last Five Years Fruits and Nuts 50% - 40% - 30% - 25% 20% - 10%- o%- □ Yield ■ Price □ Profit " 25% 27% 24% 27% 23%^22% 18% 16% 19% >10 10-24 Vegetables 50% n 46% 25-49 fluctuation range 50-74 75 < 40% 30% 20% 10% 0% 29% 9Q % 31% 11% 16% 17% 10% 21% 10% >10 10-24 25-49 fluctuation range 50-74 Frails and Nuts: The numbers of observations used were 6,765 for yield, 5,773 for price, and 5,456 for profit. Vegetables: The numbers of observations used were 372 for yield, 343 for price, and 330 for profit. Respondents were asked to indicate the range of the highest fluctuation in yield, price, and profit experienced in the past five years. Figure Dl reports the resulting distributions of farms by fluctuation range. The yield distribution was consistent with the information in Table Dl. Vegetables showed higher densities at lower fluctuation ranges than fruits/nuts. As was true for yields, vegetables fluctuated less than fruits/nuts with regard to prices and profits. However, profits in general tended to fluctuate more than yields or prices, as demonstrated by the fact that more farms were associated with higher fluctuations and fewer farms with lower fluctuations. Given that profit is a function of yield and price, some relationship between these three variables was expected. To investigate this relationship, we estimated the level of correlation between them. Estimated correlation coefficients were 0.38 between yield and price, 0.41 between yield and profits, and 0.64 between price and profits, with all p-values below 0.0001. The fluctuation of profits had a stronger correlation with the price fluctuation than with the yield fluctuation, indicating that profits are more sensitive to price fluctuations than to yield variations. Producers were asked to indicate what they thought was the main cause for their lowest profits by selecting from one of seven causes listed. Table D2 reports the dis- tribution of those responses. Poor yields, low market price due to high domestic production, and low market price due to imports were the three most cited causes for low profits for both fruits/nuts and vegetables. The primary importance of those factors, however, differed by crop category. For fruits/nuts, poor yield was the most fre- quently cited reason, indicating the importance of risk related to natural conditions. For vegetables, low market prices due to high production was the most cited cause, followed by low market prices due to imports, indicat- ing the relative importance of market conditions in vegetable industries. 6 Grower magazines and newsletters are often sources of market information for growers. Even though we believe that the majority of growers are well informed about the market, the reported statistics were based on growers' perceptions and we do not claim that they have accurate information about whether the low output price was due to high domestic production or imports. 24 A Statistical Profile of Horticultural Crop Farm Industries in California The crop-specific distributions (not reported) rein- forced the general patterns just described. Two groups of crops represented the extremes: 44 percent of tropical crop growers chose "poor yields" as the cause for their lowest profits, and 51 percent of V2 (lettuce, broccoli, etc.) farmers chose "low price due to high production" as the cause (Table Vg.D3 in Appendix 2). It is worth pointing out that the primary concern of V2 vegetable growers was "the good year's large harvest," not the bad year's poor harvest. Table D2 also presents the distributions of farmers' main causes for their lowest profits by use and by grower/ shipper status. Two interesting observations stand out from those distributions. Even though quality was not generally a dominant concern, it was considerably more important for fresh-use crops than for processed-use crops. Second, responses to the two causes of low mar- ket prices seemed to differ by crop use. Growers supplying mainly processing crops were more concerned about price declines from high domestic production than from in- creased imports (31 percent versus 13 percent), but no such distinction was found for fresh-crop growers (19 percent versus 18 percent). Next, the information was sorted by grower/shipper status because grower/shippers' vertically integrated, large-scale operations likely entail risk implications that are different from those of the ma- jority of farmers, who engage only in crop production. Sixty percent of grower/shippers chose low market prices as a main cause of low profits compared to 43 percent of grower-only farmers (Table D2), indicating that low mar- ket prices are a larger concern for grower/shippers. Finally, we evaluated the issue of whether there was any pattern in processor pricing methods (i.e., contracts with processors with or without predetermined prices). This question, which was included in the survey under marketing channels, dealt with growers producing only processing crops. As expected, for both fruit/nut and vegetable farmers, low market prices were chosen as a main cause for the lowest profit less often among grow- ers who received a predetermined price than among those did not (not reported in the table). The regional distri- bution was also examined (but not reported) and Table D2. Shares of Farms: Main Cause for Lowest Profit by Crop Category, Use, and Grower/Shipper Status Low Low Market Market Inability Total Price Price to Market Obser- High due to due to Crop vations Poor Poor Input Domestic Increased due to (n) Yield Quality Cost Production Imports Quarantine Other Percent of Farmers Who Gave this Category as Main Cause of Lowest Profit All Crops 9,169 29% 4% 7% 27% 16% 1% 17% By Crop Category Fruits and Nuts 7,898 31% 4% 6% 28% 16% 1% 15% Ornamentals 840 12% 6% 19% 15% 15% 1% 33% Vegetables 431 19% 5% 14% 29% 21% 0% 13% By Use a Mainly Processing 5,690 32% 3% 6% 31% 13% 0% 15% Mainly Fresh 2,951 25% 6% 10% 19% 18% 1% 20% By Grower/Shipper Status Grower/Shipper 118 21% 6% 6% 33% 27% 0% 7% Grower Only 2,487 28% 6% 7% 21% 22% 1% 15% 3 "Mainly processing" (or "Fresh") was indicated by the output volume share being greater than 80 percent. 25 Giannini Foundation Research Report 348 indicated that in the Far North, North Coast, and Sierra Nevada regions, particularly high proportions of respon- dents listed poor yields as a main cause for low profits. E. Risk Management This section includes mainly a discussion of ranking ques- tions related to risk management. The specific topics analyzed are ranking of risk sources in order of impor- tance, preference ranking of risk management tools, availability and utilization of risk management tools, and the history of receiving government disaster payments or loans. Figure El presents the mean ranking for each risk source listed in the survey. Ten risk sources were listed, and respondents were asked to rank the sources from one (the most important risk source) to ten. In general, as a risk source became less important, fewer respondents provided a ranking for it. Among the listed sources, adverse temperature and output price fluctuation were the two highest ranked sources, with average rankings of 2.0 and 2.3, respectively. The next most common sources were diseases, input price fluctuation, and pests, with the mean ranks ranging between 3.0 and 4.0. Mean ranks at more disaggregated levels were also examined (although not reported). Those ranking pat- terns were similar to the overall pattern, with no distinct dissimilarities among the three crop categories. Further examination of the mean ranks within the vegetable cat- egory showed a slightly pronounced pattern for the V4 class (tomatoes, peppers, and eggplants). Output price fluctuation received the mean rank of 1.6, input price fluctuation and pests both received 1 .9, and adverse tem- perature received 2.3, indicating the relative importance of price fluctuations and pests for these growers com- pared to growers of other crops. When the mean ranks by region were examined, ad- verse temperature remained one of the most important risk sources in all regions. Given that risks related to irri- gation water and hail can vary by region in California, the regional pattern of rankings of drought, irrigation water supply problems, and hail were examined. As ex- pected, water-related risks varied more by region than did other risk sources, ranging from 3.2 for irrigation water problems for South Coast growers to 5.8 for drought for the Sacramento Valley. Overall, water-related sources were relatively more important in regions such as the South Coast, Sierra Nevada, and Desert, where adequate supplies of irrigation water are known prob- lems. Hail was a relatively low-priority concern (mean ranking of below seven) everywhere except the Central San Joaquin region (with a mean ranking of 3.93). Next, growers' preferences for risk management tools and the availability and their use of those tools were ex- amined. Table El presents the mean preference ranking of various risk management tools. Rankings for all crops indicated that crop insurance was most preferred, fol- lowed by diversified marketing and multiple commodities. However, preferences by specific crop cat- egory showed different patterns. The difference was most obvious with regard to crop insurance and multiple com- modities; fruit/nut farmers strongly preferred crop insurance, whereas vegetable and ornamental crop farm- ers had a strong preference for multiple commodities. One explanation for this difference may be the level of availability of these tools; i.e., farmers may feel that a tool is "less preferred" when that tool is "less available." Given that preferences can be affected by availability, the availability of each risk management tool was inves- tigated. Table E2 reports the rate of availability as a ratio of the number of farmers who said the tool was available to them compared to the total number of respondents for that question. Again, the largest differences across crop categories arose with the two tools previously mentioned, crop insurance and diversification across multiple crops. Crop insurance was available to 49 percent of fruit/nut producers, 29 percent of vegetable growers, and 18 per- cent of ornamental crop producers. Responses for the availability of diversification into multiple crops showed almost the reverse: 17 percent for fruits/nuts, 40 percent for vegetables, and 28 percent for ornamental crops. These responses were consistent with our casual observations that, generally, fewer crop insurance programs are avail- able for vegetables than for fruits/nuts and that diversifying into new crops is naturally more difficult for perennial crop growers than for annual crop growers. Diversified marketing was available to between 16 and 26 percent of growers across the three crop categories. Forward contracts were more available for vegetable grow- ers (21 percent) than for fruit/nut growers (13 percent). The interpretation of availability requires some caution. While interpreting the availability of 26 A Statistical Profile of Horticultural Crop Farm Industries in California Figure El . Mean Ranking of Risk Sources in Order of Importance" Adverse Temperature Flood Drought Disease Irrigation Water Problem Input Price Fluctuation Output Price Fluctuation Pests Quarantine Mail 7 8 9 " The numbers of observations used in tabulating mean rank varied for risk sources. In general, more respondents provided the rank for relatively more important sources. For example, the rank for adverse temperature, which was found to be most important, was provided by 7,781 respondents, and the rank for quarantine was provided by 2,824 respondents (for more information, refer to Table All. El in the Appendix). crop insurance and government programs is straightforward, evaluating the availability of other risk tools such as crop/location diversification is not clear- cut. How individuals view the availability of such tools reflects, to some extent, their preferences for various tools. In this respect, the availability rates reported here are possibly downward-biased and can be understood as lower bound for the rates. The second column in Table E2 reports the utilization rate, calculated as a ratio of the number of users to the number of farmers who said the tool was available. Most utilization rates, except for a few less important tools, exceeded 60 percent. This indicated that as long as the tools were available, the majority of growers made use of them to manage risk. Utilization rates were generally higher for vegetable farmers than for fruit/nut growers. Diversification into multiple commodities deserves special attention, with its utilization rate of 87 percent being the highest reported. Crop diversification was the mostly preferred, most widely available (40 percent), and most frequently used (87 percent) risk management tool for vegetable growers. In fact, 87 percent of utilization Table El . Mean Ranking of Preference for Risk Management Tools" Crop Category All Crops Fruits and Nuts Vegetables Ornamentals Crop Insurance 2.1 1.9 3.1 3.4 Different Regions 4.8 4.9 3.9 3.7 Multiple Commodities 3.0 3.2 2.1 2.1 Government Programs 3.9 3.8 4.1 4.7 Hedging with Futures or Options 5.7 5.7 5.6 6.0 Forwarding Contracting 3.6 3.5 3.5 3.8 Diversified Marketing 2.9 3.0 2.9 2.4 Others 2.6 2.6 2.7 2.1 ' The number of observations differed for each tool considered and ranged from 5,793 for crop insurance (all crops) to 2,064 for hedging (all crops). For information, refer to Table A11.E3 in ihe Appendix. 27 Giannini Foundation Research Report 348 given 40 percent availability implies that 35 percent ( 87 percent times 40 percent) of vegetable farmers were practicing crop diversification as a risk reducing tool. Using only the observations that indicated the tool was available, the preference ranking was re-examined and the results are reported in the last column of Table E2. These mean rankings were positively correlated with the utilization rates and the ranks were higher than those in Table El. F. Crop Insurance The topics explored in this section include information on farmers' crop insurance purchases, private insurance Table E2. Shares of Farms: Availability and Utilization of Risk Management Tools Availability Utilization Mean Rate (Percent) 3 Rate (Percent) b Ranking Fruits and Nuts Crop Insurance 49% 69% 1.8 Different Regions 7% 39% 3.7 Multiple Commodities 17% 63% 2.4 Government Programs 15% 60% 3.0 Hedging with Futures or Options 3% 27% 4.5 Forward Contracting 13% 67% 2.4 Diversified Marketing 16% 60% 2.4 Other 3% 75% 2.4 Vegetables Crop Insurance 29% 71% 2.6 Different Regions 15% 47% 3.0 Multiple Commodities 40% 87% 2.0 Government Programs 20% 67% 3.1 Hedging with Futures or Options 7% 52% 5.0 Forward Contracting 21% 77% 2.8 Diversified Marketing 25% 79% 2.7 Other 3% 62% 2.8 Ornamentals Crop Insurance 18% 37% 3.0 Different Regions 11% 45% 3.0 Multiple Commodities 28% 78% 1.6 Government Programs 4% 36% 3.9 Hedging with Futures or Options 2% 19% 4.9 Forward Contracting 9% 66% 2.8 Diversified Marketing 26% 73% 2.1 Other 4% 74% 2.1 b The availability rale was calculated as the ratio of the number of observations with availability divided by the total number of observations The utilization rate was calculated based on the number of observations with availability. The utilization rates are not provided by crop due to the small number of observations that reported using the tool. 28 A Statistical Profile of Horticultural Crop Farm Industries in California Table FT . History of Crop Insurance Purchases Fruits and Nuts Vegetables Ornamentals Purchased at Least Once in Last Five Years 53% 31% 13% Purchased All Five Years 3 64% 71% 48% The numbers in this row were based on observations in which the farmer purchased insurance at least once in the last five years. purchases, reasons for purchasing and not purchasing crop insurance, and suggestions for modifying crop in- surance. Table Fl reports the percent of farmers that purchased any crop insurance within the last five years. Crop insurance here refers to government crop insurance as well as to private coverage such as frost insurance. Purchase rates varied considerably across crop categories. Table F 1 shows that crop insurance was purchased most extensively by fruit/nut farmers (53 percent), followed by vegetable farmers (31 percent), and ornamental crop farmers (13 percent). The table also presents the percent of crop insurance buyers who made purchases in all five years covered by the survey. The majority of the buyers purchased insurance all five years, indicating the high likelihood of continuous purchases by farmers once they chose to purchase. Table F2 shows the extent of peril-specific crop insurance purchases by growers across crop categories. Peril-specific insurance policies are offered mostly by private firms, while multi-peril insurance is provided by the government. Among fruit/nut growers in general, frost (freeze) insurance was the most frequently purchased single-peril coverage. This was particularly the case for citrus growers; more than one-third of that group purchased frost insurance. However, rain insurance was the most popular with grape growers (likely for raisin grapes) with about one quarter of them purchasing the coverage. Finally, hail insurance was the most common coverage purchased by stone fruit growers (32 percent). In general, vegetable growers tended to purchase less single-peril crop insurance than fruit/nut growers. Crop- specific information showed that, among vegetable growers, growers of V4 crops (tomatoes, peppers, and eggplants) used single-peril coverage fairly frequently, especially rain insurance (34 percent). It is likely that such high rates were observed for V4 growers relative to other vegetable growers because of the potential damage that late rains can do to the market acceptability of these crops (i.e., the "marketable" yield). Single-peril insurance was rarely used by growers of ornamentals. Respondents were asked to rank their reasons for purchasing crop insurance. Figure Fl presents the mean ranking for the reasons listed in the survey. No informa- tion is reported separately by crop category because no obvious distinctions were observed across crop catego- ries. "Crop loss" still ranked first as a reason for purchasing crop insurance, in part indicating the prevalence of Table F2. Purchase of Private (Single-Peril) Crop Insurance Total 3 Share of Farmers that Purchased Peril-Specific Insurance Fire Frost or Freeze Rain Hail All Fruits and Nuts n = 8,791 5% 20% 17% 17% Citrus n = 1,021 5% 36% 10% 18% Grapes n = 2,888 5% 21% 24% 21% Nuts n = 2,776 5% 16% 14% 14% Stone Fruits n = 798 5% 25% 25% 32% All Vegetables n = 443 9% 9% 14% 9% V4: Tomatoes, peppers, n = 137 15% 17% 34% 18% eggplants, tomatillo Ornamentals n = 936 4% 3% 3% 3% The sum of the farmers over all perils is not equal to the total number because many respondents did not answer this question 29 Giannini Foundation Research Report 348 Figure Fl . Mean Ranking of Reasons for Purchasing Crop Insurance 3 Risk of Crop Loss Was High Expected Water Supplies to be Cut Back Insurance Was Required to Qualify for Other USDA Programs Expected to Receive Lower Prices for My Crops Bank or Other Lender Required Insurance Other The number of observations used differed for each reason and ranged from 3,602 for "risk of crop loss was high" to 1 ,044 for "expected water supplies to be cut back." Figure F2. Mean Ranking of Reasons for Not Purchasing Crop Insurance" Lack of Availability for My Crop Major Source of Risk Not an Insured Cause of Loss Too Much Paperwork Never Lost Enough Production Premium Cost Too High Lack of Availability of Knowledgeable Insurance Agent Do Not Understand Crop Insurance Program Other 1 The number of observations used differed for each reason and ranged from 2.722 for "have never lost enough production" to 1,167 for "lack of knowledgeable insurance agent." yield-based crop insurance. The second highest ranking reason was "required to qualify for USDA programs." Some linkage exists between crop insurance participa- tion and USDA farm program benefits (Lee et al.). Farmers who wish to remain eligible for some USDA program benefits must obtain catastrophic insurance or higher levels of coverage. Given the relatively few government programs available for specialty crop growers, this rank- ing may be associated with the specialty crop growers who have diversified into field crops. However, it is worth mentioning that not even one-quarter of potential respon- dents (in this case, insurance buyers) provided the rank for the reason for purchasing crop insurance except for "crop loss," which was chosen by more than three-quar- ters of the insurance buyers. This indicated that many felt that any reason other than crop loss was remotely related. 30 A Statistical Profile oj Horticultural Crop Farm Industries in California Reasons for not purchasing crop insurance and their mean ranking are presented in Figure F2. "Never lost enough production" and "premium is too high" ranked highest among the choices offered except "other." This reflected the relatively low degree of yield variability in many specialty crops grown in California. "Lack of avail- ability for my crop" was next. Particularly among vegetable growers, lack of availability was ranked as the primary reason for not purchasing crop insurance, with a mean rank of 1.6 (not shown in the figure). Further, "major source of risk is not an insured cause of loss" and "do not understand the program" were not trivial. Fi- nally, for almost all crop categories, "other" ranked as the primary reason for not insuring. This may imply that there is substantial "catch up" to be done for both growers and insurance providers — that more efforts are needed to in- form growers about crop insurance and for authorities to learn the unique reasons why growers of particular crops do not purchase insurance. Table F3 provides the average ranking of suggestions to improve crop insurance. 7 Suggestions listed were mostly related to compensation schemes. For fruit/nut and vegetable farmers, "raising the yield guarantee," "com- pensating for revenue or profit," and "guaranteeing cash production costs" ranked high, while for ornamental growers, "compensating for revenue or profit" and "guar- anteeing placement costs of an inventory" ranked high. For fruit/nut farmers, guaranteeing the cost of establish- ing an orchard was not as preferred as compensation of cash production costs, and a compensation scheme for ornamentals needs to be devised to accommodate their production systems because traditional yield-based pro- duction is not relevant to them. Overall, it was clear that specialty crop growers were more concerned with rev- enue and profit variability than they were with yield variability. This attitude is common among farmers in California's irrigated agricultural industry. Recent research on crop insurance has consistently identified some level of demand, but that demand has been influenced by numerous factors (Coble et al. ; Makki and Somwaru). A decade ago, research focused prima- rily on yield risk as the key determinant of demand for crop insurance. Studies of that period focusing on spe- cialty crops found that growers' reluctance to insure was based on the fact that price variance was often more sig- nificant than yield variance (Dismukes, Allen and Morzuch; Weisensel and Schoney). This prompted the first assessments of revenue insurance as an alternative (Turvey). In recent years, revenue insurance has received wide attention. However, the few studies of specialty crop producers' demand for revenue insurance have shown a need for more detailed, crop specific analyses of market and grower factors (Miller, Kahl and Rath well; Richards). G. Financial Characteristics The final section of analysis focuses on four financial vari- ables: off-farm income share, gross agricultural sales, assets, and debts (from 2001). Previous research has shown that these factors have a significant influence on Table F3. Mean Ranking of Suggestions to Modify Crop Insurance" Suggestions for Modifying Crop Insurance Fruits and Nuts Vegetables Ornamentals Compensate for a Higher Level of Production Loss 2.0 2.2 2.7 Compensate for a Loss of Gross Sales 2.3 2.5 2.3 Compensate for a Loss of Profit 2.1 2.4 2.5 Guarantee Cash Production Costs 2.4 2.2 3.0 Guarantee Costs of Establishing an Orchard or Vineyard 3.6 4.5 3.8 Guarantee Replacement of a Crop Inventory 3.5 3.4 2.3 Other 1.5 1.4 1.2 a The number of observations used differed for each suggestion and ranged from 3.8- costs of establishing an orchard or vineyard." ■0 for "compensate for a higher level of production loss" to 2,343 for "guarantee ' Note that a higher production guarantee would be possible only at a higher premium. It is possible that stating such conditions explicitly could alter the ranking. However, given our earlier results that average yield fluctuations were 8 percent for vegetables and 15 percent for fruits/nuts (Table Dl), it was not surprising to see "higher production guarantee" commanding a relatively high ranking (regardless of premium levels). 31 Giannini Foundation Research Report 348 Figure Gl . Distribution of Off-Farm Income Share (Year 2001) Fruits and Nuts - Mean = 64% 30% 11-20 21-30 31^0 41-50 51-60 61-70 71-80 81-90 91-100 Vegetables - Mean = 42% 30% 11-20 21-30 31^t0 41-50 51-60 61-70 71-80 81-90 91-100 Ornamentals - Mean =61% 30% 1-10 11-20 21-30 31^t0 41-50 51-60 61-70 71-80 81-90 91-100 percent share of off-farm income farmers' risk attitudes and, thus, on their risk manage- ment practices. For example, off-farm income supports most farms in the United States (USDA 2001). The cush- ion from off-farm income makes many of those farms less sensitive to income risk (Blank 2002), thus decreas- ing the demand for risk management tools (Briys and Schlesinger). In other words, off-farm income substitutes for other risk management tools to some extent. Figure Gl presents the distribution and mean of off- farm income shares by crop category. The "share" refers to the percentage of total household income that comes from off-farm sources. The mean share for the entire survey was 63 percent (indicating that 37 percent of household income came from farming activities). In general, there seemed to be a common pattern in the distribution for each crop category. Each distribution showed relatively heavy densities at the 1 to 10 percent range and then in the mid-range at 41 to 50 percent. The density started to increase at the 71 to 80 percent range. Note that the 91 to 100 percent range showed the highest density among all ranges for both fruits/nuts (26 percent) and ornamentals (25 percent). 8 However, the distribution The category of farmers with an off-farm income share of between 91 and 100 percent normally includes hobby farmers. However, in the survey we asked for the off-farm income share in 2001. Thus, this category included both farmers who had a disastrous year in 2001 and those who engaged in farming as a hobby. 32 A Statistical Profile of Horticultural Crop Farm Industries in California Table Gl . Mean Gross Agricultural Sales, Assets, and Debts Gross Ag. Sales ($1,000) Mean Standard Deviation Assets ($1,000) Mean Standard Deviation Debts ($1,000) Mean Standard Deviation All 413 (1,855) 1,415 (5,373) 582 (3,207) By Crop Category Fruits and Nuts 330 (1,675) 1,373 (5,251) 598 (3,204) Observations n = 7,163 n = 4,553 n = 2,590 Vegetables 1,112 (1,885) 1,889 (6,916) 940 (5,504) Observations n = 382 n = 237 n= 166 Ornamentals 818 (2,922) 1,575 (5,625) 395 (2,018) Observations n = 815 n = 512 n = 529 of farms in the vegetable category deviated from the other two categories. The distribution of vegetable farmers showed greater density in the ranges with relatively low off- farm income shares, indicating that vegetable growers tend to spend less time on off-farm activities and get more of their income from farming than do fruit/nut or ornamental growers. Table Gl provides average values of gross agricultural sales, assets, and debts. Along with mean dollar figures, the table also reports the standard deviations in parentheses. There were substantial differences across crop categories. Consistent with the earlier findings on mean acreage, vegetable growers' mean gross sales were much higher than those of other categories — nearly three times that of fruits/nuts and one and a half times that of ornamentals. The standard deviations of the mean gross sales were relatively large, indicating substantial variation in sales figures across farms. Nevertheless, judging from the values of the coefficients of variation, it was possible to infer that the variation in gross sales was less severe for vegetable farms. Vegetable operations also had the highest mean val- ues for assets and debts. 9 The reported mean values of assets and debts gave debt/asset ratios of 0.42 for fruits/ nuts and 0.50 for vegetables. (These are both much higher than the 0.15 debt-to-asset ratio reported by the USDA for all of American agriculture in the same year (USDA).) More importantly, when viewing assets and debts as fi- nancial inputs necessary to generate revenue, the ratio of gross sales revenue to the sum of assets and debts was highest for vegetables and lowest for fruits/nuts. This implies that one unit of financial inputs is associated with a higher level of revenue for vegetables than for fruits/ nuts, or equivalently, one unit of revenue is associated with a lower level of financial inputs for vegetables than for fruits/nuts. This cursory observation may be linked to the relatively high (low) intensiveness of financial (or capital) inputs required, or the relatively low (high) per- formance of financial inputs in fruit/nut (vegetable) production. The mean gross sales by region varied substantially. Gross sales data by crop category and by region indicated that the lowest gross sales were in the Far North region for both the fruit/nut and the vegetable categories, as expected because of those region's lack of suitability for such crops (livestock operations are dominant in the region). The highest mean sales for the fruit/nut category were the Central Coast - North's $0.6 million (the bulk of these sales are most likely from strawberry growers in the Salinas Valley of Monterey County); for the vegetable category, the highest mean sales were the Sacramento Valley's $1.8 million. Figure G2 provides the distribution of gross agricultural sales by crop category. The median and mean 9 Particular caution was required to process the asset data. We found a number of seemingly inconsistent responses to asset questions. Criteria for consistency and reasonableness were set and observations that did not meet the criteria were excluded. 33 Giannini Foundation Research Report 348 Figure G2. Distribution of Gross Agricultural Sales Fruits and Nuts Vegetables Ornamentals 33% 0-10 11-50 51-100 101-500 501-1,000 1,001- 2,000 2,001- 5,001 and 5,000 greater 0-10 1 1-50 51-100 101-500 501-1,000 1,001- 2,000 2,001- 5,001 and 5,000 greater 0-10 11-50 51-100 101-500 501-1,000 1,001- 2,000 gross sales ($1,000) 2,001- 5,001 and 5,000 greater gross sales diverged considerably; the median was only about one-tenth of the mean value due to inclusion of some extremely high sales values for a few very large- scale operations combined with the large number of small-scale farms. In the vegetable category there were relatively higher proportions of farmers in higher sales ranges. The proportions of farmers with more than $1 million in sales were 6 percent for fruits/nuts, 29 percent for vegetables, and 13 percent for ornamentals. Figures G3 and G4 provide the mean gross sales by off-farm income share and by acreage class, respectively. Mean gross agricultural sales were negatively correlated with off-farm income share and positively correlated with acreage, confirming our expectation that higher agricultural revenues were generated by farms with larger acreage and farmers with less off-farm work. However, when sales revenue was computed as per-acre revenue, Figure G4 suggests that revenue per acre decreases as acreage increases. This is not counter-intuitive, given that specialty crops vary widely in unit value (and, thus, in value per acre) and the survey results indicated that smaller sized farms were, in general, associated with higher crop values. 34 A Statistical Profile of Horticultural Crop Farm Industries in California Figure G3. Mean of Gross Agricultural Sales ($1,000) by Off-Farm Income Share o T3 T3 C D D O l,600 n 1,522 1,400 1,200 1,000 800 600 400 200 0 116 113 z „ 97 21-30 ' 31-^0 ' 41-50 ' 51-60 ' 61-70 share of off-farm income (percent) Figure G4. Mean of Gross Agricultural Sales ($1,000) by Acreage Class $4,424 g 2,000 J 1,500 0-10 11-20 21-30 31^10 41-50 51-60 51-60 61-70 71-80 81-90 91- number of acres 101- 501- 1,001 + 200 1 ,000 35 Giannini Foundation Research Report 348 A Statistical Profile of Horticultural Crop Farm Industries in California SUMMARY AND IMPLICATIONS This section first summarizes a few major empiri- cal findings of the study. The discussion then turns to a few implications for risk management policy focused on California horticultural crop producers' demand for crop insurance. Finally, we consider some suggestions for further research. Summary The main purpose of this report was to provide detailed and unique survey-based information on the fruit/nut, vegetable, and ornamental crop industries of California. The main findings from these survey data are as follows. California has fewer vegetable farms but, measured by gross sales and other dimensions, they are larger op- erations than fruit/nut farms are. Diversification (i.e., the number of crops grown) in- creases with farm size, measured by acres. Fruit/nut farms are, on average, less diversified than vegetable farms, and when fruit/nut farmers diversify, they tend to use similar crops. About 6 percent of fruit/nut and vegetable farms have some organic (or transitional-organic) land. These organic farmers represent 6 percent of fruit/nut farms, 14 per- cent of vegetable farms, and 4 percent of ornamental crop farms. Many of these farms also engage in conventional farming, and they devote, on average, about one-third of their primary crop land to organic farming. California farms tend to grow produce for either pro- cessing or fresh use but not for both. About 71 percent of the sampled fruit/nut farms produced mainly for pro- cessing use. About 67 percent of sampled vegetable farms produced mainly for fresh use. Contracts play a major role in marketing for specialty/ horticultural crops. They are particularly important in markets for crops designated for processing. Nearly 60 percent of fruit/nut farmers and 90 percent of vegetable farmers marketed their processing commodities through contract arrangements. The majority of these contracts provided for a predetermined price. About 13 percent of vegetable farms but only 3 per- cent of orchard farms are grower/shippers. These farms tend to be larger than average and supply to mass mer- chandisers. The grower-only group tends to use more diverse marketing channels. Among the various chan- nels, "directly to consumers" (farmers markets, you-pick operations, roadside stands) was used by the largest share of farms (3 1 percent), but the farms tended to be smaller than average. Yield variability is an important risk factor for grow- ers. Orchard and vineyard crop yields tend to fluctuate more than vegetable yields. Orchard and vineyard crop yields deviated an average of 15 percent for the five-year moving-average yield, compared to an average of 8 per- cent for vegetable crop yields. Despite considerable yield variation from year to year for these California crops, price variability is listed by growers as the most important risk source. Growers list price declines due to industry-wide overproduction as the number one concern. Growers use diversification and some marketing chan- nels to manage risk. Crop insurance is less available for vegetable crops than it is for fruit, vine, and nut crops. Vegetable producers view crop insurance as a "less pre- ferred" risk management tool. When asked about crop insurance programs, many farmers suggested that a "higher yield guarantee" would improve crop insurance. Further, most farmers strongly suggested the need for crop insurance that compensates in value terms, but they expressed no strong preference among compensations based on gross sales, profit, or production costs. Implications The information provided in this study and the data set that underlies it will prove useful to agricultural busi- ness firms, including individual farms, as well as to government policy advisors and program designers. The study results provide a benchmark to industries that al- lows them to compare operations to the averages and medians for specific crops or locations. It also allows ag- ricultural marketing and other service and supply firms to better understand their own potential supply and cus- tomer base for planning and product development. Such detailed data have not been available previously. The data are being used in risk management education efforts for growers and in summary form to provide objective data about grower operations and attitudes. 37 Giannini Foundation Research Report 348 The data and results also have implications for public policy and implementation of public policy, especially relative to risk management. Some examples are provided here. We find that many growers use crop diversification to smooth their revenue streams, but some growers find diversification more difficult or costly. Even if more di- versified farms tend to have less variability in farm income, the degree and form of diversification affects the probability and magnitude of losses. The importance of diversification and its variation across specific industries points to the conditions under which yield insurance may be of interest and where it is less important to a farm's annual revenue and thus less appealing as a risk man- agement tool. The covariance between price and individual farm yield is another crucial piece of informa- tion in assessing farm revenue risk related to either price or yield variability. USDAs Risk Management Agency has been developing whole-farm revenue insurance products. The appropriate design of such products requires this kind of data. Our analysis shows that no one risk management tool fits all growers. Some risk-related patterns may be ob- served broadly in certain segments of farms. However, those patterns change when smaller subcategories of crop producers are analyzed because risks and the way grow- ers manage them depend on many complex factors. One implication is that insurance products that are designed and targeted for individual crops may miss the whole- farm interactions. In reality, an insurance product for a specific crop would work differently for different grow- ers depending on their characteristics outside the specific crop. It is also vital to better understand the risk manage- ment tools that growers currently use when designing public policy to help farmers manage risk. In many cases, public policy for risk management can be effectively de- signed to accommodate and complement rather than substitute for or conflict with the risk tools that growers already value and use. Overall, the results of this survey suggest that one must proceed with caution when attempting to develop government-sponsored risk management programs. Pro- grams may fail to meet objectives and may have serious unintended consequences unless the full set of opportu- nities and constraints facing farmers is well understood and the differences across farms are incorporated in the program design. This study shows the complexity of risk- related costs and revenues associated with the fruit, nut, vegetable, and ornamental horticulture industries in Cali- fornia. The data summarized in this report also can be use- ful for further research. These data, together with information on grower costs and returns, can help ana- lysts better understand variations among horticultural crop industries in California and elsewhere. Researchers are also pursuing more detailed analyses of the data. For example, these data are ideal for measuring patterns of diversification and, in some cases, vertical integrations and for examining the multivariate patterns of these with alternative measures of farm size. Assessing other, more detailed relationships among the variables is also on the research agenda. This report does not attempt to disen- tangle the various causal relationships among the data. Such research is on the horizon. Finally, this survey provides a one-time cross-section on many important variables. Periodic re-surveys would allow researchers to track the path of adjustment and allow assessment of industry dynamics with rich, repeated cross-sectional information. 38 A Statistical Profile oj Horticultural Crop Farm Industries in California REFERENCES Blank, S. "Is Agriculture a 'Way of Life' or a Business?" Choices 17(3) (2002):26-30. Blank, S. "Preferences for Crop Insurance When Farm- ers Are Diversified." Agribusiness: An International journal 12 (1996):583-592. Blank, S., and J. McDonald. Crop Insurance as a Risk Man- agement Tool in California: The Untapped Market. Research report for project funded by the Federal Crop Insurance Corporation, 1993. Boehlje, D.M., and D. Lins. "Risk and Risk Management in an Industrialized Agriculture." Agricultural Finance Review 58 (1998):2-15. Briys, E., and H. Schlesinger. "Risk Aversion and the Pro- pensities for Self-Insurance and Self-Protection." Southern Economic journal 57 (1990): 458-467. Coble, K., T. Knight, R. Pope, and J. Williams. "Model- ing Farm-Level Crop Insurance Demand with Panel Data." American journal of Agricultural Economics 78 (1996):439-447. Dismukes, R., P. Allen, and B. Morzuch. "Participation in Multiple-Peril Crop Insurance: Risk Assessments and Risk Preferences of Cranberry Growers." Northeast- ern journal of Agricultural and Resource Economics 18 (1989): 109-1 17. Goodhue, R., D. Heien, H. Lee, and D. Sumner. "Con- tracts, Quality, and Industrialization in Agriculture: Hypotheses and Empirical Analysis of the California Winegrape Industry." Review of Industrial Organiza- tion, 2004, forthcoming. Goodhue, R., D. Heien, H. Lee, and D. Sumner. "Grower- Winery Contracts in California: Use and Design." California Agriculture May/June 2002:97-102. Johnston, W. "Cross Sections of a Diverse Agriculture: Profiles of California's Production Regions and Prin- cipal Commodities." California Agriculture, Issues and Challenges. Jerome Siebert, ed. Berkeley, CA: Univer- sity of California Division of Agriculture and Natural Resources, Giannini Foundation, 1997. Lee, H. "California Horticulture: Current Trade and Policy Issues." Agricultural and Resource Economics Update 6 (2002):3-6. Lee, H., J. Harwood, and A. Somwaru. "Implications of Crop Insurance Reform for Non-insured Crops." American journal of Agricultural Economics 79 (1997):419-429. Makki, S., and A. Somwaru. "Farmers' Participation in Crop Insurance Markets: Creating the Right Incen- tives." American journal of Agricultural Economics 83 (2001):662-667. Miller, S., K. Kahl, and J. Rathwell. "Revenue Insurance for Georgia and South Carolina Peaches." Journal of Agricultural and Applied Economics 32(1) (2000): 123-132. Parker, D., and R. Howitt. "California Water." California Agriculture, Issues and Challenges. Jerome Siebert, ed. Berkeley, CA: University of California Division of Agriculture and Natural Resources, Giannini Foun- dation, 1997. Pope, R., and R. Prescott. "Diversification in Relation to Farm Size and Other Socioeconomic Characteristics." American Journal of Agricultural Economics 62 (1980):554-559. Richards, T.J. "A Two-Stage Model of the Demand for Specialty Crop Insurance. "Journal of Agricultural and Resource Economics 25 (2000): 177-194. Smith, J., and A. Mandac. "Subjective versus Objective Yield Distributions as Measures of Production Risk." American Journal of Agricultural Economics 77 (1995):152-161. Sumner, D., and D. Hart. A Measure of Subsidy to Califor- nia Agriculture. Davis CA: University of California Agricultural Issues Center Brief 2, 1997. Turvey C.G. "An Economic Analysis of Alternative Farm Revenue Insurance Policies." Canadian Journal of Agricultural Economics 40 (1992):403-426. United States Department of Agriculture, National Agri- cultural Statistics Service. 1997 Census of Agriculture: California State and County Data, Vol. 1, Geographic Area Series Pt. 5, NASS AC97-A-5. Washington, DC, 1999. United States Department of Agriculture, Economic Re- search Service. Agricultural Income and Finance: Situation and Outlook. Washington, DC, 2001. Weisensel, W , and R. Schoney. "An Analysis of the Yield- Price Risk Associated with Specialty Crops." Western Journal of Agricultural Economics 14 (1989):293-299. 39 Giannini Foundation Research Report 348 40 A Statistical Profile of Horticultural Crop Farm Industries in California APPENDIX 1 Response Rates Relatively few farmers answered all 25 survey questions. Respondents found some questions easier to answer than others. In this section, we report the response rate for each survey question based on the 10,410 observations comprising our basic data set. We also report distribu- tion information on the rate of response when it is relevant. Ql. What is your farm size? Response rate: 100 percent based on 10,410 observa- tions. Q2. Where is your largest operation located? Response rate: 100 percent based on 10,410 observa- tions. Q3. Years of farming? Response rate: 95 percent (9,845 observations) based on 10,410 observations. Q4. What are your major crops? Response rate: 99 percent based on 10,358 observations. Our data set include 52 observations of noncrop farmers (mostly in apiculture and aquaculture). This question was designed for crop farmers and thus the response rate was calculated based on crop farmers only. Q5 (a). Do you have organic farming? Response rate: 99.7 percent (10,386 observations) based on 10,410 observations. Q5 (b). What are your organic crops? Response rate: 100 percent based on 637 observations of organic farmers. Q6. What is your primary specialty crop? Response rate: 99 percent (10,298 observations) based on 10,410 observations. Q6a. What are the crop shares of processing and fresh use? Response rate: 97 percent (10,111 observations) based on 10,410 observations. Note: For each observation, both processing and fresh output shares had to sum to 100 percent. When the per- centages did not add up to 100 percent, we regarded those observations as nonresponses (five observations greater than 100 percent and 32 observations less than 100 percent). Q6b. What are the marketing channels for your pro- cessed use crop? Response rate: 99 percent based on 7,119 observations. Note: The output share designated to each of the mar- keting channels had to add up to 100 percent. However, this sum was greater than 100 percent for 15 observa- tions and less than 100 percent for 56 observations. These were regarded as nonresponses. Q7. Are you a grower-shipper (relevant to fresh use)? Response rate: 97 percent based on the 3,837 fresh-crop growers. Q7a. If you are a grower/shipper, what is the output share sold at predetermined price? Response rate: 82 percent (460 observations) based on 560 observations of grower/shippers. Q8. If you are a grower only, what are your marketing channels? Response rate: 99 percent based on 3,173 observations. Note: The output share designated to each of the mar- keting channels had to add up to 100 percent. However, this sum was greater than 100 percent for 10 observa- tions and less than 100 percent for 35 observations. These were regarded as nonresponses. 41 Giannini Foundation Research Report 348 Q9. What are your actual yields per acre for 1997-2001? The notion of per-acre yield was not relevant to two classes of farmers, noncrop farmers and ornamentals farmers. Thus, the response rate was calculated based on the set of 9,341 observations that excluded noncrop and orna- mentals farmers. Furthermore, many people did not answer for all five years. Thus, we calculated the response rate for each year separately. Response Rate (Percent) Based on 9,341 Year Observations Observations 2001 6,522 70% 2000 5,868 63% 1999 5,435 58% 1998 4,962 53% 1997 4,760 51% QlOa. What is the largest yield fluctuation for the last five years? Response rate: 77 percent (7,929 observations) based on 10,298 observations. QlOb. What is the largest annual price fluctuation for the last five years? Response rate: 67 percent (6,894 observations) based on 10,298 observations. QlOc. What is the largest profit fluctuation for the last five years? Response rate: 64 percent (6,549 observations) based on 10,298 observations. Qll. What is the main reason for the lowest profit? Response rate: 98 percent (10,055 observations) based on 10,298 observations. Q12. Rank the importance of the sources of risk. Response Rate (Percent) Based on 10,410 Rank Observations Observations 1 9,463 91% 2 7,358 71% 3 5,315 51% 4 3,604 35% 5 2,564 25% Q13. Rank the tools. preference of the risk management Fewer responses were provided as the ranking became lower. Therefore, we report the response rate by rank. Rank Observations Response Rate (Percent) Based on 10,410 Observations 1 6,834 66% 2 4,249 41% 3 2,776 27% 4 1,836 18% 5 1,415 14% Q14. Have you received government disaster pay- ments or loans? Response rate: 91 percent (9,450 observations) based on 10,410 observations. Q15. Have you purchased any crop insurance within the past five years? Response rate: 97 percent (10,138 observations) based on 10,410 observations. Q15a. How many years have you purchased crop in- surance within the last five years? Response rate: 99 percent (4,792 observations) based on 4,845 observations where Question 15 was answered "yes." 42 A Statistical Profile oj Horticultural Crop Farm Industries in California Q16. Have you purchased single-peril crop insurance for the last five years? Response rate: 100 percent based on 4,845 observations where Question 15 was answered "yes." Q17. Rank the reasons for purchasing crop insurance. Response rates were calculated based on the farmers who had purchased crop insurance before. Response Rate (Percent) Based on 4,845 Rank Observations Observations 3 1 3,969 82% 2 1,840 38% 3 939 19% 4 632 13% 5 556 12% a Number of respondents who answered "yes" to Question 15. Q18. Rank the reasons for not purchasing crop insur- ance. Rank Observations Response Rate (Percent) Based on 5,293 Observations" 1 5,935 100% 2 2,729 52% 3 1,464 28% 4 618 16% 5 556 12% 6 552 10% 7 490 9% a Number of respondents who answered "no" to Question 15. Q19. How can crop insurance serve your needs bet- ter? Response Rate (Percent) Based on 10,410 Rank Observations Observations 1 5,755 55% 2 3,796 37% 3 2,610 25% 4 1,781 17% 5 1,366 13% 6 1,196 12% Q20. Has risk management become more important? Response rate: 89 percent (9,303 observations) based on 10,410 observations. Q21. Have you become more familiar with crop insurance? Response rate: 90 percent (9,383 observations) based on 10,410 observations. Q22. How many risk management education meetings and seminars have you attended? Response rate: 26.6 percent (2,771 observations) based on 10,410 observations. Q23. What is the share of nonfarm income? Response rate: 69.6 percent (7,243 observations) based on 10,410 observations. Q24. What are the gross sales of agricultural commodities? Response rate: 87.6 percent (9,123 observations) based on 10,410 observations. 43 Giannini Foundation Research Report 348 44 A Statistical Profile oj Horticultural Crop Farm Industries in California APPENDIX 2 Data Tables All Crops A11.A1-A2. Size and Regional Profile Table AII.A1 . Size and Regional Profile - Number of Farms, Average Acres per Farm, and Average Years of Farming by Region and Crop Category Number of Farms Total Acres per Farm Years of Farming Percent Distribution Obs. Based on Mean Standard Mean Standard (n) n = 10,200 Acres Deviation Years Deviation By Region All Regions 10,200 100% 203 1,412 25.1 15.5 Far North 89 1% 121 367 22.5 15.3 North Coast 1,211 12% 100 420 22.6 15.4 Central Coast - North 541 5% 248 991 24.8 16.3 Central Coast - South 793 8% 132 534 23.5 15.0 South Coast 811 8% 274 4,128 23.0 13.9 Sacramento Valley 1,322 13% 280 916 25.1 15.2 San Joaquin - North 1,776 17% 185 754 26.6 15.7 San Joaquin - Central 1,718 17% 208 819 26.9 16.0 San Joaquin - South 1,327 13% 268 1,263 26.4 15.9 Sierra Nevada 237 2% 62 133 24.3 15.9 Desert 373 4% 149 614 23.8 14.1 By Crop Category Fruits and Nuts 8,785 86% 157 676 25.4 15.7 Vegetables 459 5% 1,106 4,944 25.5 14.7 Ornamentals 956 9% 75 522 22.3 14.3 45 Giannini Foundation Research Report 348 Table AII.A2. Size and Regional Profile - Number of Farms, Average Acres per Farm, and Average Years of Farming by Crop Category/Region Total Acres per Farm Years of Farming Number of Farms Mean Standard Mean Standard in the Region Acres Deviation Years Deviation Fruits and Nuts All Regions 8,785 (86%) 157 676 25.4 15.7 Far North 37 54 97 23.3 14.8 North Coast 1,091 106 438 22.6 15.5 Central Coast - North 301 145 366 25.4 18.3 Central Coast - South 633 129 549 23.7 15.4 South Coast 457 51 156 23.3 12.7 Sacramento Valley 1,215 204 623 25.1 15.3 San Joaquin - North 1,678 123 367 26.6 15.8 San Joaquin - Central 1,641 175 666 27.1 16.0 San Joaquin - South 1,281 260 1,278 26.5 15.9 Sierra Nevada 167 68 133 25.2 16.8 Desert 282 77 250 24.0 13.8 Vegetables All Regions 459 (5%) 1,106 4,944 25.5 14.7 Far North 19 124 190 25.8 16.3 North Coast 54 83 218 20.5 11.8 Central Coast - North 85 742 1,535 25.1 14.3 Central Coast - South 59 297 721 23.8 14.5 South Coast 27 3,983 19,200 23.3 15.9 Sacramento Valley 54 1,929 2,331 29.8 12.8 San Joaquin - North 04 1,397 1,929 28.5 14.7 San Joaquin - Central 54 1,300 2,604 23.6 15.5 San Joaquin - South 19 986 976 26.3 16.4 Sierra Nevada 6 179 290 18.7 14.4 Desert 38 805 1,662 27.6 15.5 Ornamentals All Regions 956 (9%) 75 522 22.3 14.3 Far North 33 193 573 19.4 15.1 North Coast 86 35 164 23.1 15.8 Central Coast - North 155 92 815 23.5 13.2 Central Coast - South 101 52 157 22.2 12.6 South Coast 327 63 600 22.6 15.3 Sacramento Valley 53 67 297 20.4 14.7 San Joaquin - North 54 316 679 22.6 10.3 San Joaquin - Central 23 15 27 20.4 15.4 San Joaquin - South 27 110 208 21.7 14.2 Sierra Nevada 64 35 106 22.5 13.4 Desert 53 55 200 19.6 13.6 46 A Statistical Profile of Horticultural Crop Farm Industries in California A11.B1-B2. Crop Diversification Table AII.B1 . Crop Diversification - Mean Acres in Crop Diversification by Crop Category Major Crops Observations (n) Mean Acres per Farm Standard Deviation Fruits and Nuts Field Crops 354 383 623 Fruits and Nuts 8,664 111 554 Vegetables 138 118 227 Ornamentals 69 10 31 Vegetables Field Crops 152 861 1,363 Fruits and Nuts 90 127 236 Vegetables 426 495 1,333 Ornamentals 11 57 164 Ornamentals Field Crops 12 374 520 Fruits and Nuts 55 178 1,077 Vegetables 26 648 2,239 Ornamentals 952 52 491 47 Giannini Foundation Research Report 348 Table AII.B2. Crop Diversification - Number of Organic Farms and Average Organic Acres per Farm by Region and Crop Category Farms with Organic or Transitional Transitional-Organic Land Organic Land Organic Land Number of Farms Total Acres / Farm Mean Acres / Farm Mean Acres / Farm Obs. Percent" Mean Std Dev. Obs. Mean Std Dev. Obs. Mean Std Dev. By Region All Regions 612 6% 229 1,120 461 44 117 191 42 107 Far North L6 18% 29 45 L0 4 2 3 41 28 North Coast 144 12% 143 651 109 47 138 41 14 14 Central Coast - North 53 10% 243 658 46 49 138 11 39 63 Central Coast - South 59 7% 102 292 48 52 215 17 86 287 South Coast 62 8% 99 274 54 40 138 13 32 55 Sacramento Valley 89 7% 272 799 63 50 86 36 43 65 San Joaquin - North 45 3% 356 1,345 29 56 62 20 44 60 San Joaquin - Central 50 3% 255 669 32 46 36 21 45 50 San Joaquin - South 42 3% 871 3,460 20 47 70 13 63 ^2 Sierra Nevada 24 10% 70 126 L9 35 70 6 28 27 Desert 28 8% 104 255 22 23 33 10 67 184 By Crop Category Fruits and Nuts 508 6% 213 1,109 383 40 87 163 45 114 Vegetables 65 14% 454 1,464 50 74 224 18 29 44 Ornamentals 39 4% 63 196 28 46 188 10 1 3 14 3 Numbers for this column were calculated based on the entire sample in each relevant category. For example, 6% = 612/10,200 where 10,200 was the sample size of all regions, and 18% = 16/89 where 89 was the size of the subsample Far North. 48 A Statistical Profile of Horticultural Crop Farm Industries in California A11.C1-C4. Marketing Table All. CI . Marketing - Processing versus Fresh Use: Number of Farms by Use and Average Volume Share by Region and Crop Category Farms Reporting Having Some Crops Average Volume Share Designated Total Observations (n) Processing Fresh a To Processing by Farms with Some Processing To Fresh by Farms with Some Fresh By Region All Regions 10,854 65% 35% 92% 92% Far North 89 28% 72% 92% 100% North Coast 1,211 87% 15% 98% 86% Central Coast - North 541 46% 62% 86% 95% Central Coast - South 793 53% 65% 75% 88% South Coast 811 19% 88% 68% 97% Sacramento Valley 1,322 86% 17% 98% 83% San Joaquin - North 1,776 89% 14% 98% 85% San Joaquin - Central 1,718 81% 23% 96% 91% San Joaquin - South 1,327 61% 53% 81% 93% Sierra Nevada 237 57% 47% 93% 94% Desert 373 35% 78% 69% 93% By Crop Category Fruits and Nuts 8,785 79% 29% 93% 88% Vegetables 459 34% 75% 82% 95% Ornamentals 941 1% 99% 54% 100% a The sum of percenlages for Fresh and Processing can be greater than 100 percent because some farms supply their crops for both fresh and processing uses. 49 Giannini Foundation Research Report 348 Table AII.C2. Marketing - Marketing Channels for Processing-Use Crops: Number of Farms Using Specific Marketing Channels and Average Volume Share for Each Marketing Channel by Crop Category Mean Share of Volume Marketing Channel (Processed Use) No. of Farms Percent of Farms Marketed All Crops (based on n = 7,055) Marketing Cooperative 2,475 35% 95% Sold under Contract with a Predetermined Price 2,257 32% 93% Sold under Contract without a Predetermined Price 952 28% 92% Spot Market 339 5% 65% Participation Plan 100 1% 54% Other 550 8% 85% Crop Category 3 - Fruits and Nuts (based on n = 6,940) Marketing Cooperative 2,453 35% 96% Sold under Contract with a Predetermined Price 2,145 31% 93% Sold under Contract without a Predetermined Price 1,916 28% 93% Spot Market 319 5% 66% Participation Plan 89 1% 57% Other 515 7% 85% Crop Category 2 - Vegetables (based on n = 156) Marketing Cooperative 17 11% 66% Sold under Contract with a Predetermined Price 104 67% 93% Sold under Contract without a Predetermined Price 30 19% 80% Spot Market 15 10% 62% Participation Plan 7 4% 44% Other 18 12% 75% Most ornamental crops are sold fresh and thus were not included here Table AII.C3a. Marketing - Number of Grower/Shippers (Fresh Only) Grower/Shipper Distribution (Fresh-Use Only) Operation Type No. of Farms Percent of Farms in Category All Crops Grower/Shipper 338 9% Grower Only 3,336 91% By Crop Category Fruits and Nuts Grower/Shipper 75 3% Grower Only 2,386 97% Ornamentals Grower/Shipper 217 24% Grower Only 671 76% Vegetables Grower/Shipper 46 14% Grower Only 279 86% 50 A Statistical Profile of Horticultural Crop Farm Industries in California Table AII.C3b. Marketing - Number of Grower/Shippers and Volume (Percent) Sold at Predetermined Price by Crop Category Mean Share of Volume Crop Category Number of Grower/Shippers (Percent) Sold at Predetermined Price Fruits and Nuts 48 (of 75) 71% Ornamentals 167 (of 217) 86% Vegetables 32 (of 46) 64% Table AII.C4. Marketing - Marketing Channels of Fresh-Use Crops (Growers Only): Number of Farms Using Specific Marketing Channels and Average Volume Share by Crop Category Mean Share of Volume Percent of Farms Traded by Marketing Marketing Channel (Fresh Use) No. of Farms in Category" Channel All Crops (Based on n = 3,799) Direct to Consumers 807 21% 75% Marketing Cooperative 891 23% 93% Independent Shipper/Brokers 1,202 31% 91% Direct to Commercial Buyers 811 21% 81% Other 213 5% 75% By Crop Category Fruits and Nuts (Based on n = 1,845) Direct to Consumers 359 13% 68% Marketing Cooperative 861 32% 95% Independent Shipper/Brokers 1,013 38% 93% Direct to Commercial Buyers 339 13% 81% Other 118 4% 79% Ornamentals (Based on n = 931) Direct to Consumers 339 38% 82% Marketing Cooperative 11 1% 43% Independent Shipper/Brokers 85 10% 78% Direct to Commercial Buyers 374 42% 85% Other 82 9% 73% Vegetables (Based on n = 303) Direct to Consumers 109 32% 78% Marketing Cooperative 19 6% 51% Independent Shipper/Brokers 104 30% 89% Direct to Commercial Buyers 98 29% 68% Other 13 4% 54% • The percent sum over the marketing channels in each category can be greater than 100 percent because some farmers use multiple marketing channels. 51 Giannini Foundation Research Report 348 A11.D1-D3. Yield, Price, and Profit Fluctuations Table AII.D1 . Yield, Price, and Profit Fluctuations - Yield Deviation (Percent) from Individual Five-Year Averages: Sample Mean for 1997-2001, Sample Mean for 1999 by Region, and Sample Mean for 1997-2001 by Crop Category Individual's Yield Deviation from Own Five- Year Average No. of Observations" (n) Mean Standard Deviation Sample Mean for 1997-2001 2001 4,402 20% 30% 2000 4,402 17% 23% 1999 4,402 16% 23% 1998 4,402 17% 23% 1997 4,402 18% 27% Sample Mean for 1999 by Region b Far North 16 21% 30% North Coast 565 12% 15% Central Coast - North 196 15% 32% Central Coast - South 309 17% 30% South Coast 234 16% 20% Sacramento Valley 566 16% 22% San Joaquin - North 813 17% 23% San Joaquin - Central 898 15% 22% San Joaquin - South 579 20% 25% Sierra Nevada 87 16% 20% Desert 139 14% 21% Sample Mean for 1997-2001 by Crop Category' Fruits and Nuts 2001 4,057 17% 20% 2000 4,057 15% 18% 1999 4,057 14% 17% 1998 4,057 15% 18% 1997 4,057 16% 19% Vegetables 2001 195 11% 17% 2000 195 8% 14% 1999 195 7% 10% 1998 195 8% 13% 1997 195 8% 13% k Yield deviations were calculated using the observations that provided all five-year yields. We selected only one single year (the mid-year of the five-year period) for presentation. There was no consistent yield measure for ornamental crops and thus they were excluded 52 A Statistical Profile of Horticultural Crop Farm Industries in California Table AII.D2. Yield, Price, and Profit Fluctuations - Largest Yield Fluctuation: Number of Farms per Fluctuation Range by Crop Category Yield Price Profit Fluctuation Range (Percent) No. of Farms (n) Percent of Farms No. of Farms (n) Percent of Farms No. of Farms (n) Percent of Farms All Crops 0-9 2,217 28% 1,682 25% 1,621 25% 10-24 2,084 27% 1,674 25% 1,443 22% 25-49 1,706 22% 1,693 25% 1,355 21% 50-74 1,013 13% 1,124 17% 967 15% 75 or More 819 10% 628 9% 1,082 17% Total 7,839 100% 6,801 100% 6,468 100% By Crop Category Fruits and Nuts 0-9 1 ,69Z Zj/o 1 , 1 J 1 ISJ to 1 1 77 1,1// Z.Z /o 10-24 1,801 27% 1,413 24% 1,150 21% 25-49 1,581 23% 1,574 27% 1,201 22% 50-74 930 14% 1,062 18% 895 16% 75 or More 761 11% 593 10% 1,033 19% Total 6,765 100% 5,773 100% 5,456 100% Ornamentals 0-9 357 51% 415 61% 334 49% 10-24 175 25% 162 24% 192 28% 25-49 79 11% 64 9% 95 14% 50-74 48 7% 25 4% 39 6% 75 or More 43 6% 19 3% 22 3% Total 702 100% 685 100% 682 100% Vegetables 0-9 168 45% 136 40% 110 33% 10-24 108 29% 99 29% 101 31% 25-49 46 12% 55 16% 59 18% 50-74 35 9% 37 11% 33 10% 75 or More 15 4% 16 5% 27 8% Total 372 100% 343 100% 330 100% 53 Giannini Foundation Research Report 348 Table AII.D3. Yield, Price, and Profit Fluctuations - Main Cause for Lowest Profit by Crop Category, Use, and Grower/Shipper Status (Percent of Farmers Who Answered) Low Market Low Market Inability to Total High Price due to Price due to Market a Obs. Poor Poor Input High Domestic Increased Crop due to (n) Yield Quality Cost Production Imports Quarantine Other All Crops 9,169 29% 4% 7% 27% 16% 1% 17% By Crop Category Fruits and Nuts 7,898 31% 4% 6% 28% 16% 1% 15% Ornamentals 840 12% 6% 19% 15% 15% 1% 33% Vegetables 431 19% 5% 14% 29% 21% 0% 13% By Use a Mainly Processing 5,690 32% 3% 6% 31% 13% 0% 15% Mainly Fresh 2,951 25% 6% 10% 19% 18% 1% 20% By Grower/Shipper Status Grower/Shipper 118 21% 6% 6% 33% 27% 0% 7% Grower Only 2,487 28% 6% 7% 21% 22% 1% 15% Mainly Processing (or Mainly Fresh) was indicated by an output volume share greater than 80 percent. 54 A Statistical Profile oj Horticultural Crop Farm Industries in California A11.E1-E5. Risk Management Table All. El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop Mean Ranking of Risk Sources Irrig. Input Output Adverse Water Price Price Temper- Supply Fluctu- Fluctu- Quar- ature Floods Drought Disease Problems ation ation Pests antine Hail All Crops Mean Ranking 2.0 7.2 5.4 3.8 4.7 3.5 2.3 3.5 7.8 5.6 Observations (n) 7,781 3,084 3,786 4,900 4,083 5,042 6,791 5,639 2,824 3,849 By Region Far North 1.9 7.0 4.3 2.9 3.8 3.6 3.4 2.7 8.1 6.1 North Coast 1.7 7.3 5.0 2.8 4.6 4.4 3.6 3.2 8.4 6.6 Central Coast - N. 2.1 6.3 5.2 3.3 4.7 3.4 2.5 3.3 7.9 7.1 Central Coast - S. 1.9 6.7 5.1 3.6 4.9 4.0 2.4 3.1 7.1 7.7 South Coast 2.4 7.8 4.1 3.9 3.5 3.4 2.5 3.3 6.4 7.0 Sacramento Valley 2.0 6.1 5.8 3.8 5.5 3.4 2.2 3.6 8.2 5.7 San Joaquin - N. 2.0 7.2 5.9 3.8 5.4 3.3 2.0 3.6 8.3 5.5 San Joaquin - Cen. 2.2 7.8 5.9 4.6 4.5 3.2 1.8 4.0 8.1 3.9 San Joaquin - S. 2.1 7.9 5.6 4.6 4.5 3.4 2.0 3.6 7.8 5.0 Sierra Nevada 1.9 7.8 3.9 3.2 4.0 4.3 3.4 3.0 8.4 5.2 Desert 2.0 7.3 4.8 3.7 3.8 3.4 2.3 3.2 5.8 7.8 By Crop Category Fruits and Nuts 2.0 7.3 5.4 3.9 4.7 3.5 2.2 3.5 7.9 5.4 Vegetables 2.4 6.1 5.5 3.6 4.6 3.3 2.3 3.5 8.2 6.7 Ornamentals 2.1 6.8 4.5 3.4 4.4 3.3 2.9 3.3 6.9 6.7 By Use Processing 2.0 7.1 5.4 3.6 4.8 3.5 2.2 3.5 8.2 5.5 Fresh Market 2.1 7.2 5.1 4.0 4.4 3.5 2.4 3.5 7.2 5.6 Both 2.3 7.3 5.7 4.2 5.1 3.7 2.0 3.6 7.3 6.0 By Grower/Shipper Status Grower/Shipper 2.2 7.3 5.9 3.9 5.1 3.4 2.5 3.7 7.4 5.7 Grower Only 2.1 7.2 5.1 4.1 4.5 3.6 2.3 3.5 7.3 5.7 55 Giannini Foundation Research Report 348 Table AII.E2. Risk Management - Ranking of Risk Sources (in Order of Importance): Distribution of Ranks by Risk Source Mean Ranking of Risk Sources Irrig. Input Output Adverse Water Price Price Temper- Supply Fluctu- Fluctu- Quar- Rank ature Floods Drought Disease Problems ation ation Pests antine Hail Total Responses 7,780 3,075 3,784 4,897 4,083 5,041 6,791 5,637 2,813 3,842 1 Obs. (n) 4 117 1,11 1 Q8 111 47Q 747 ~\ 114 ill Distribution 53% 3% 6% 12% 12% 15% 47% 13% 3% 8% 2 Obs. (n) 1,615 226 460 933 571 1,362 1,597 1,222 129 515 Distribution 21% 7% 12% 19% 14% 27% 24% 22% 5% 13% 3 Obs. (n) 972 136 378 887 538 881 757 1,290 71 425 Distribution 12% 4% 10% 18% 13% 17% 11% 23% 3% 11% 4 Obs. (n) 455 133 385 820 468 626 457 939 106 351 Distribution 6% 4% 10% 17% 11% 12% 7% 17% 4% 9% >4 Obs. (n) 621 2,482 2,334 1,651 2,027 1,425 756 1,459 2,435 2,243 Distribution 8% 81% 62% 34% 50% 28% 11% 26% 87% 58% 50 A Statistical Profile of Horticultural Crop Farm Industries in California Table AII.E3. Ranking of Preference for Risk Management Tools: Mean Ranking by Region, Crop Category, Use, and Grower/Shipper Status Mean Ranking of Risk Management Tools Hedging Multiple Govern- with Forward Crop Different Com- ment Futures or Con- Diversified Insurance Regions modities Programs Options tracting Marketing Other All Crops Mean Ranking 2.1 4.8 3.0 3.9 5.7 3.6 2.9 2.6 Observations (n) 5,793 2,425 3,514 3,400 2,064 3,060 3,667 1,676 By Region Far North 3.5 4.6 2.4 4.0 6.5 3.8 2.3 1.8 North Coast 2.3 4.8 3.8 4.9 5.8 2.5 3.0 2.6 Central Coast - North 3.0 4.4 2.7 4.5 5.8 3.2 2.6 2.6 Central Coast - South 2.1 4.4 2.9 4.4 6.1 3.9 2.9 2.9 South Coast 2.7 4.1 2.4 4.6 5.9 4.2 2.6 2.0 Sacramento Valley 2.0 5.0 2.9 3.6 5.6 3.6 3.0 2.5 San Joaquin - North 1.9 4.8 3.2 3.9 5.5 3.5 5.1 2.8 San Joaquin - Central 1.9 4.9 3.0 3.5 5.6 3.9 3.0 2.7 San Joaquin - South 1.8 5.0 2.9 3.5 5.6 4.1 3.1 3.0 Sierra Nevada 2.6 4.9 2.9 4.0 6.0 3.2 2.6 2.0 Desert 2.4 4.2 3.3 4.2 5.7 3.5 2.2 1.7 By Crop Category Fruits and Nuts 1.9 4.9 3.2 3.8 5.7 3.5 3.0 2.6 Vegetables 3.1 3.9 2.1 4.1 5.6 3.5 2.9 2.7 Ornamentals 3.4 3.7 2.1 4.7 6.0 3.8 2.4 2.1 By Use Processing 2.0 5.0 3.3 3.8 5.6 3.2 3.0 2.6 Fresh Market 2.3 4.4 2.6 4.0 5.9 4.2 2.7 2.4 Both 2.1 4.5 2.8 4.1 5.9 4.3 3.1 3.3 By Grower/Shipper Status Grower/Shipper 2.9 4.3 2.4 4.7 5.9 3.6 2.3 3.0 Grower Only 2.2 4.5 2.7 4.1 6.0 4.5 2.9 2.5 57 Giannini Foundation Research Report 348 Table AII.E4. Risk Management - Rates of Availability and Utilization of Risk Management Tools and Mean Ranking of Preferences Availability Utilization* Preference b No. of Rate of No. of Observations Farms that Availability Farms (n) that Kisk Answered Based on All that Rate of Provided Mean Management Tool Available (n = 10,200) Utilized Tool Utilization Ranking Ranking Crop Insurance 4,583 45% 3,094 68% 4,068 1.9 Different Regions 804 8% 326 41% 711 3.6 Multiple Commodities 1,964 19% 1,320 67% 1,816 2.3 Government Programs 1,418 14% 848 60% 1,276 3.0 Hedging with Futures 304 3% 89 29% 252 4.6 Forwarding Contracting 1,298 13% 881 68% 1,193 2.4 Diversified Marketing 1,789 18% 1,127 63% 1,675 2.4 Other 283 3% 209 74% 261 2.4 The rate of utilization was calculated based on the farms that reported that the tool was available. Preference rankings were based on availability. 58 A Statistical Profile oj Horticultural Crop Farm Industries in California Table AII.E5. Status of Receipt of Government Disaster Payments or Loans by Region and Crop Category Receipt of Government Disaster Payments or Loans Received Not Qualified Unaware All Crops Observations (n) 2,859 3,663 2,746 Row Percent 31% 40% 30% By Region Far North Observations (n) 19 39 26 Distribution 23% 46% 31% North Coast Observations (n) 124 468 480 Distribution 12% 44% 45% Central Coast - North Observations (n) 81 235 172 Distribution 17% 48% 35% Central Coast - South Observations (n) 208 282 216 Distribution 29% 40% 31% South Coast Observations (n) 85 350 302 Distribution 12% 47% 41% Sacramento Valley Observations (n) 534 422 267 Distribution 44% 35% 22% San Joaquin - North Observations (n) 538 632 441 Distribution 33% 39% 27% San Joaquin - Central Observations (n) 521 677 379 Distribution 33% 43% 24% San Joaquin - South Observations (n) 646 337 233 Distribution 53% 28% 19% Sierra Nevada Observations (n) 51 76 87 Distribution 24% 36% 41% Desert Observations (n) 50 145 143 Distribution 15% 43% 42% By Crop Category Fruits and Nuts Observations (n) 2,654 3,075 2,240 Distribution 33% 39% 28% Vegetables Observations (n) 146 160 125 Distribution 34% 37% 29% Ornamentals Observations (n) 59 428 381 Distribution 7% 49% 44% 59 Giannini Foundation Research Report 348 A11.F1-F6. Crop Insurance Table AII.F1 . Crop Insurance: Purchase History and Average Number of Purchases for the Last Five Years by Crop Crop Insurance Purchased in the Last Five Years Response Observations Percent of Farms All Crops Yes 4,766 48% No 5,179 52% Crop Category Fruits and Nuts Yes 4,496 53% No 4,057 47% Vegetables Yes 139 31% No 313 69% Ornamentals Yes 131 14% No 809 86% Average Number of Purchases for the Last Five Years One Two Three Four Five All Crops Observations (n) 372 465 510 365 2,999 Percent of Farms 3 8% 10% 11% 8% 64% Crop Category Fruits and Nuts Observations (n) 345 440 468 352 2,841 Percent of Farms 8% 10% 11% 8% 64% Ornamentals Observations (n) 17 15 25 11 61 Percent of Farms 13% 12% 19% 9% 47% Vegetables Observations (n) 10 10 17 99 b Percent of Farms 7% 7% 13% 73% Percentages were based on the farmers who had purchased crop insurance at least once in the past five years. Four- and five-time purchasers were combined together because there were so few four-time purchasers (not reported). 60 A Statistical Profile of Horticultural Crop Farm Industries in California Table AII.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop Peril Total Observations Fire Frost or Freeze Rain Hail Other None All Crops Observations (n) 10,200 521 1,843 1,601 1,598 404 2,366 Percent 5% 18% 16% 16% 4% 23% By Crop Fruits and Nuts Observations (n) 8,785 439 1,775 1,511 1,534 370 2,216 Percent 5% 20% 17% 17% 4% 25% Vegetables Observations (n) 459 41 38 63 40 1 1 59 Percent 9% 8% 14% 9% 2% 13% Ornamentals Observations (n) 956 41 30 27 24 23 91 Percent 4% 3% 3% 3% 2% 10% By Use" Mainly Processing Observations (n) 6,341 331 1,188 1,210 1,092 245 1,623 Percent 5% 19% 19% 17% 4% 26% Mainly Fresh Observations (n) 3,228 150 501 308 407 130 600 Percent 5% 16% 10% 13% 4% 19% Processing/Fresh Observations (n) 631 40 154 83 99 29 143 Percent 6% 24% 13% 16% 5% 23% a Mainly Processing (or Fresh) was indicated by an output volume share greater than 80 percent. 61 Giannini Foundation Research Report 348 Table AII.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance by Crop Category and Use Risk of Crop Loss Was High Expected Water Supplies to Be Cut Back Insurance Req'd to Qualify for Other USDA Programs Expected to Receive Lower Prices for Crops Bank or Other Lender Required Insurance Other All Crops Mean Rank 1.3 3.5 2.3 2.7 2.8 1.5 No. of Observations that Provided Ranks 3,602 1,044 1,698 1,468 1,290 1,164 By Crop Category Fruits and Nuts Mean Rank 1.3 3.5 2.3 2.6 2.8 1.5 Observations (n) 3,414 960 1,593 1,376 1,194 1,047 Vegetables Mean Rank 1.5 3.4 2.3 2.9 3.2 2.0 Observations (n) 112 56 78 00 63 31 Ornamentals Mean Rank 1.5 2.9 2.8 2.8 2.8 1.2 Observations (n) 76 28 27 32 33 86 By Use" Mainly Processing Mean Rank 1.3 3.5 2.4 2.6 2.6 1.5 Observations (n) 2,427 674 1,100 965 903 712 Mainly Fresh Mean Rank 1.4 3.4 2.1 2.7 3.1 1.5 Observations (n) 915 293 452 394 296 372 Processing/Fresh Mean Rank 1.3 3.4 2.1 2.5 3.1 1.6 Observations (n) 260 77 146 109 91 80 Mainly Processing (or Fresh) was indicated by an output volume share greater than 80 percent. 62 A Statistical Profile of Horticultural Crop Farm Industries in California Table AII.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop Category and Use Major Never Lost Couldn't Source of Too Enough Find Do Not Not Risk Not Much Prod'n or Premium Know- Understand Available Insured Paper- Revenue Cost ledgable Crop for My Cause work to File Too Insurance Insurance Crop of Loss to Apply Claim High Agent Program Other All Crops Mean Rank 2.2 2.8 3.3 1.8 1.9 4.0 2.8 1.5 No. of Obs. that 2,425 1,566 1,499 2,722 2,849 1,167 2,171 2,011 Provided Ranks By Crop Category Fruits and Nuts Mean Rank 2.3 2.8 3.2 1.8 1.9 4.0 2.7 1.5 Obs. (n) 1,849 1,278 1,247 2,288 2,450 935 1,770 1,747 Vegetables Mean Rank 1.6 3.0 3.9 2.4 2.5 4.0 3.0 1.7 Obs. (n) 205 100 85 131 125 83 132 78 Ornamentals Mean Rank 1.9 2.7 3.3 1.9 2.3 3.5 2.8 1.6 Obs. (n) 371 188 167 303 274 149 269 186 By Use- Mainly Processing Mean Rank 2.6 2.8 3.3 1.7 1.8 4.1 2.8 1.5 Obs. (n) 1,169 922 879 1,713 1,767 652 1,205 1,332 Mainly Fresh Mean Rank 1.8 2.9 3.2 2.0 2.1 3.7 2.6 1.6 Obs. (n) 1,082 533 520 841 926 425 825 582 Processing/Fresh Mean Rank 2.1 2.9 3.5 2.0 2.3 4.0 2.8 1.8 Obs. (n) 174 111 100 168 156 90 141 97 ' Mainly Processing (or Fresh) was indicated by an output volume share greater than 80 percent. o3 Giannini Foundation Research Report 348 Table AII.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop Compensate Compensate Guarantee Guarantee for a Higher for a Compensate Guarantee Costs of Replace- Level of Loss of for a Cash Establishing ment Costs Production Gross Loss of Production Orchard or of a Crop Loss Sales Profit Costs Vineyard Inventory Other All Crops Mean Ranking 2.1 2.3 2.2 2.5 3.7 3.4 1.5 Observations that 3,840 3,282 3,515 3,289 2,343 2,611 2,654 Provided Ranks By Crop Category Fruits and Nuts Mean Rank 2.0 Obs. (n) 3,446 Vegetables Mean Rank 2.2 Obs. (n) 178 Ornamentals Mean Rank 2.7 Obs. (n) 216 2.3 2.5 162 2.3 232 2.2 3,132 2.4 169 2.5 214 2.5 2,906 2.2 175 3.0 208 3.6 2,105 4.5 3.8 150 3.5 2,207 3.4 136 2.3 268 1.5 2,212 1.5 128 1.3 314 By Use a Mainly Processing Mean Rank 2.0 2.4 2.2 2.5 3.5 3.5 1.5 Obs. (n) 2,499 2,026 2,217 2,042 1,499 1,536 1,597 Mainly Fresh Mean Rank 2.3 2.3 2.2 2.6 3.9 3.1 1.5 Obs. (n) 1,088 1,022 1,048 1,001 679 896 929 Processing/Fresh Mean Rank 2.3 2.2 2.1 2.4 3.9 3.8 1.7 Obs. (n) 253 234 250 246 165 179 128 Mainly Processing (or Fresh) was indicated by an output volume share greater than 80 percent- 64 A Statistical Profile of Horticultural Crop Farm Industries in California Table AII.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago Risk Management Is Becoming More Familiar Becoming More Important with Crop Insurance Response Obs. (n) Percent of Farms Obs. (n) Percent of Farms All Crops Yes 5,041 55% 5,120 56% No 4,088 45% 4,089 44% By Crop Category Fruits and Nuts Yes 4,455 57% 4,669 59% No 3,381 43% 3,243 41% Vegetables Yes 266 62% 197 46% No 161 38% 230 54% Ornamentals Yes 320 37% 254 29% No 546 63% 616 71% 65 Gianni ni Foundation Research Report 348 A11.G1-G4. Financial Characteristics Table AII.G1 . Financial Characteristics - Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts: Mean Values by Region and Crop Category Off-Farm Income Share Gross Ag. Sales Assets Debts Mean (%) Std Dev. Mean ($) Std Dev. Mean ($) Std Dev. Mean ($) Std Dev. All Mean 63% 33% $412,817 1,854,687 $1,415,235 5,373,490 $582,191 3,206,599 Obs. (n) 6,651 8,355 5,302 3,291 By Region Far North 65% 34% $920,473 4,059,360 $1,510,732 5,294,761 $142,211 348,008 North Coast 64% 32% $325,815 1,099,370 $2,783,341 10,507,516 $924,470 3,060,051 Central Coast - N. 58% 36% $761,202 1,937,813 $1,646,159 2,926,632 $580,880 1,449,821 Central Coast - S. 65% 32% $696,340 3,093,924 $1,981,227 4,714,187 $653,165 1,559,505 South Coast 68% 32% $458,418 2,420,859 $1,017,016 2,162,905 $328,225 1,272,061 Sacramento Valley 61% 33% $323,894 980,417 $1,261,088 4,302,686 $576,354 3,509,270 San Joaquin - N. 63% 32% $311,111 1,295,385 $1,184,176 4,218,182 $440,402 1,567,944 San Joaquin - Cen. 63% 33% $314,182 1,360,128 $1,041,383 3,106,078 $464,177 1,771,200 San Joaquin - S. 60% 32% $557,383 2,717,588 $1,459,186 6,840,180 $827,639 5,841,383 Sierra Nevada 69% 31% $110,832 280,956 $614,521 952,716 $128,040 310,154 Desert 68% 33% $329,969 835,354 $1,330,425 7,266,563 $1,032,591 6,984,674 By Crop Category Fruits and Nuts 64% 32% $329,769 1,675,420 $1,372,641 5,251,438 $597,520 3,204,021 Vegetables 42% 34% 3 1,111,873 1,884,959 $1,888,527 6,916,069 $939,828 5,504,406 Ornamentals 61% 34% $817,913 2,921,573 $1,574,915 5,624,793 $394,742 2,017,626 66 A Statistical Profile oj Horticultural Crop Farm Industries in California Table AII.G2. Financial Characteristics - Distribution of Gross Agricultural Sales by Region and Crop Category Gross Agricultural Sales (in $1,000) 501- 1,001- 2,001- 5,001 and 0-10 11-50 51-100 101-500 1,000 2,000 5,000 Greater All Observations (n) 1,160 2,607 1,364 2,124 471 300 203 103 Percent 14% 31% 16% 25% 6% 4% 2% 1% Cumulative Percent 14% 45% 62% 87% 93% 96% 99% 100% By Region rai LNOIXn 1 / i j Q O 0 3 31% 26% 20% 12% 0% 5% North Coast tit 11 A ZZ*T 1 S9 1 DZ HQ Z. J 1 8 1 o \7 JtlLl alllcilLU Valley 521 16% San Joaquin — North 101 1 J 10 San Joaquin — Central ODU X -J 10 San Joaquin - south JOJ lO/o Sierra Nevada 84 18% Desert 123 15% All-Year Mean Yield Deviation All-Year Sample Mean by Crop Observations (n) from Five-Year Average b Berries 76 10% Citrus 433 15% Grapes 1,536 13% Nuts 1,215 16% Apples and Pears 101 15% Stone Fruits 337 16% Tropicals 430 21% 3 Data include only the observations that provided all five-year yields. b We did not differentiate the direction of deviation. All yield deviations were calculated using absolute values. 79 Giannini Foundation Research Report 348 Table Fn.D2. Yield, Price, and Profit Fluctuations - Yield Deviation (Percent) from Individual Five- Year Averages: All-Year Sample Mean by Crop/Region Yield Deviation from Crop Region Observations (n) Five- Year Average Berries Central Coast - North 35 6% Central Coast - South 13 5% Sacramento Valley 11 19% Citrus Central Coast - South 106 13% South Coast 33 10% San Joaquin - Central 42 17% San Joaquin - South 192 17% Desert 43 10% Grapes North Coast 479 12% Central Coast - North 65 16% Central Coast - South 59 12% Sacramento Valley 24 15% San Joaquin - North 155 12% San Joaquin - Central 584 12% San Joaquin - South 95 13% Sierra Nevada 52 15% Desert 15 15% Nuts North Coast 39 16% Central Coast - North 24 15% Central Coast - South L6 16% South Coast 12 21% Sacramento Valley 286 16% San Joaquin - North 528 16% San Joaquin - Central 146 16% San Joaquin - South 146 14% Sierra Nevada 14 23% Apples and Pears North Coast 32 13% Central Coast - North 13 15% Sacramento Valley 22 8% Stone Fruits Sacramento Valley 106 16% San Joaquin - North 73 17% San Joaquin - Central 67 14% San Joaquin - South 71 15% Tropicals Central Coast - South 81 27% South Coast 160 18% Sacramento Valley 63 22% San Joaquin - Central 11 12% San Joaquin - South 48 24% Desert 58 19% Note: We do not report all eleven regions. We excluded regions where the number of farms was too few. 80 A Statistical Profile of Horticultural Crop Farm Industries in California Table Fn.D3. Yield, Price, and Profit Fluctuations - Largest Yield, Price, and Profit Fluctuations: Number of Farms in Ranges of Fluctuation by Crop Yield Price Profit Fluctuation No. of Percent No. of Percent No. of Percent Range (Percent) Obs. of Farms Obs. of Farms Obs. of Farms All Fruit and Nut Crops 0-9 1,692 25% 1,132 20% 1,177 22% 10-24 1,802 27% 1,415 24% 1,150 21% 25-49 1,583 23% 1,575 27% 1,203 22% 50-74 930 14% 1,062 18% 895 16% 75 or More 762 11% 593 10% 1,033 19% Total 6,769 100% 5,777 100% 5,458 100% Berries 0-9 33 29% 19 18% 26 27% 10-24 38 33% 33 32% 23 24% 25-49 22 19% 42 40% 22 23% 50-74 11 10% 4 4% 10 10% 75 or More 10 9% 6 6% 15 16% Total 114 100% 104 100% 96 100% Citrus 0-9 174 23% 92 13% 118 18% 10-24 197 26% 126 18% 94 14% 25-49 165 21% 176 26% 139 21% 50-74 118 15% 138 20% 114 17% 75 or More 116 15% 155 23% 195 30% Total 770 100% 687 100% 660 100% Grapes 0-9 656 29% 447 23% 426 23% 10-24 645 28% 450 23% 367 20% 25-49 555 24% 465 24% 379 21% 50-74 243 11% 395 20% 307 17% 75 or More 176 8% 170 9% 337 19% Total 2,275 100% 1,927 100% 1,816 100% continued on following page 81 Giannini Foundation Research Report 348 Table Fn.D3. Continued Yield Price Profit Fluctuation No. of Percent No. of Percent No. of Percent Range (Percent) Obs. of Farms Obs. of Farms Obs. of Farms Nuts 0-9 482 23% 255 15% 332 20% 10-24 555 27% 462 27% 395 24% 25-49 525 25% 534 31% 392 24% 50-74 310 15% 349 20% 265 16% 75 or More 190 9% 142 8% 257 16% Total 2,062 100% 1,742 100% 1,641 100% Apples and Pears 0-9 28 17% 43 28% 33 24% 10-24 50 30% 32 21% 26 19% 25-49 34 21% 37 25% 23 17% 50-74 22 13% 24 16% 21 15% 75 or More 31 19% 15 10% 34 25% Total 165 100% 151 100% 137 100% Stone Fruits 0-9 155 24% 146 26% 126 23% 10-24 159 24% 141 25% 114 21% 25-49 138 21% 155 27% 122 22% 50-74 101 15% 78 14% 8b 16% 75 or More 105 16% 48 8% 95 17% Total 658 100% 568 100% 543 100% Tropicals 0-9 164 23% 130 22% 116 21% 10-24 158 22% 171 29% 131 23% 25-49 144 20% 166 28% 126 22% 50-74 125 17% 74 12% 92 16% 75 or More 134 18% 57 10% 100 18% Total 725 100% 598 100% 565 100% 82 A Statistical Profile of Horticultural Crop Farm Industries in California Table Fn.D4. Yield, Price, and Profit Fluctuations - Main Cause for Lowest Profit by Region, Crop, and Processor Pricing Method (with and without Predetermined Price) Main Cause for Lowest Profit (Percent of Farmers Who Answered) Total No. Low Low Inability WUs. lllal Market Price Market Price to Market Answered UUC LL> 11.14*11 due to Crop Main Poor Poor Input Domestic Increased due to Cause Yield Quality Cost Production Imports Quarantine Other All Fruit and 7,902 29% y /o I IO l IO 10 70 1% 17% Nut Crops By Region Far North 34 50% V ; IO U IO lo /o Qo/ y to 1 0/ North Coast 976 50% 2% O IO y /o O lo no/ U lo ~t AO/ L"s lo Central Coast - N. 258 37% 5% 10% 23% 11% 0% 14% Central Coast - S. 561 38% 6% 4% 14% 22% 1% 17% South Coast 417 34% 5% 12% 13% 20% 5% 11% Sacramento Valley 1,099 34% 5% 5% 29% 12% 0% 14% San Joaquin - N. 1,480 28% 3% 5% 41% 8% 0% 16% San Joaquin - Cen. 1,510 19% 2% 5% 40% 24% 0% 10% San Joaquin - S. 1,161 27% 6% 5% 26% 22% 0% 15% Sierra Nevada 149 41% 7% 9% 11% 5% 0% 27% Desert 255 26% 7% 5% 23% 25% 1% 13% By Crop Berries 132 24% 5% 8% 33% 18% 1% 11% Citrus 931 25% 6% 4% 19% 31% 1% 15% Grapes 2,596 32% 2% 6% 29% 15% 0% 16% Nuts 2,433 30% 4% 5% 38% 8% 0% 15% Apples and Pears 199 33% 9% 8% 11% 28% 0% 12% Stone Fruits 747 28% 8% 8% 27% 13% 1% 15% Tropicals 865 44% 3% 7% 10% 21% 3% 12% By Processor Pricing Method Sold to Processor 1,828 38% 3% 7% 24% 13% 0% 16% under Contract with Predetermined Price Sold to Processor 1,622 27% 4% 5% 33% 16% 1% 15% under Contract Without Predetermined Price By Use a Mainly Processing 5,581 32% 3% 6% 31% 13% 0.3% 15% Mainly Fresh 1,839 32% 6% 6% 20% 20% 1.0% 15% Mainly Processing (or Fresh) was indicated by output volume share greater than 80 percent Giannini Foundation Research Report 348 Fn.El-E5. Risk Management Table Fn.El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop Mean Ranking of Risk Sources Adverse Temper- ature Floods Drought Disease Irrig. Water Supply Problems Input Price Fluctu- ation Output Price Fluctu- ation Pests Quar- antine Hail All Fruit and Nut Crops Mean Ranking 2.0 7.3 5.4 3.8 4.7 J.D 1. 1 i ^ j.j / .y J.T Observations (n) 0,/DJ z,o jy A 1 Sft T, 1 JO J, Jul T,JU7 J,7JZ 4 80S 2 All 3,393 By Crop Berries \/1 p cm Rank 1.9 5.8 6.1 4.3 5.0 3.3 2.1 3.7 8.6 6.1 Observations (n) 105 53 58 68 56 74 104 74 39 52 Citrus iviccUi rs.aiir\ 1.9 7.7 5.3 4.9 4.4 3.6 1.9 3.7 7.2 6.2 Observations (n) 836 313 423 429 451 534 767 536 315 376 V 1 1 C t I ' ' ' A A t> O C"l W '1 t"l \7 IVlcall tvallK 7 6 / A 1 5.5 3.4 4.7 3.7 2.4 3.5 8.2 5.2 Observations (n) 2,247 886 1,093 1,477 1,208 1,428 1,916 1,622 847 1,220 Nuts Mean Rank 2.1 6.8 5.4 3.7 4.8 3.4 2.1 3.4 8.5 6.2 Observations (n) 2,039 824 971 1,308 1,015 1,328 1,893 1,488 670 904 Apples and Pears Mean Rank 2.2 7.2 5.7 3.7 5.9 3.6 2.3 3.5 8.3 4.4 Observations (n) 171 65 83 106 73 106 140 138 58 108 Stone Fruits Mean Rank 2.1 7.2 6.5 4.5 5.7 3.1 2.0 4.1 7.9 3.4 Observations (n) 631 249 260 359 296 419 566 400 225 454 Tropicals Mean Rank 2.0 7.3 4.7 4.0 3.9 3.8 2.7 3.2 6.2 6.7 Observations (n) 726 249 359 411 402 420 546 547 268 279 84 A Statistical Profile of Horticultural Crop Farm Industries in California Table Fn.E2. Risk Management - Ranking of Risk Sources (in Order of Importance): Distribution of Ranks by Risk Source Mean Ranking of Risk Sources Rank Adverse Temper- ature Floods Drought Disease Irrig. Water Supply Problems Input Price Fluctu- ation Output Price Fluctu- ation Pests Quar- antine Hail Total Responses 6,755 2,639 3,247 4,158 3,501 4,309 5,932 4,805 2,422 3,393 1 Obs. (n) 3,599 72 177 496 392 596 2,874 605 61 287 Distribution 53% 3% 5% 12% 11% 14% 48% 13% 3% 8% 2 Obs. (n) 1,407 187 369 766 484 1,182 1,412 1,024 108 475 Distribution 21% 7% 11% 18% 14% 27% 24% 21% 4% 14% 3 Obs. (n) 849 114 318 732 461 751 649 1,109 54 394 Distribution 13% 4% 10% 18% 13% 17% 11% 23% 2% 12% 4 Obs. (n) 382 98 343 709 404 533 383 807 82 319 Distribution 6% 4% 11% 17% 12% 12% 6% 17% 3% 9% 5 Obs. (n) 220 144 402 596 398 453 217 581 106 257 Distribution 3% 5% 12% 14% 11% 11% 4% 12% 4% 8% 6 Obs. (n) 137 188 388 399 403 293 147 279 119 299 Distribution 2% 7% 12% 10% 12% 7% 2% 6% 5% 9% 7 Obs. (n) 72 272 440 218 348 241 100 193 195 296 Distribution 1% 10% 14% 5% 10% 6% 2% 4% 8% 9% 8 Obs. (n) 44 396 407 149 332 145 87 131 260 300 Distribution 1% 15% 13% 4% 9% 3% 1% 3% 11% 9% 9 Obs. (n) 20 503 266 59 151 72 29 48 541 391 Distribution 0.4% 19% 8% 1% 4% 2% 0% 1% 22% 12% 10 Obs. (n) 18 656 135 31 128 42 34 26 885 368 Distribution 0.3% 25% 4% 1% 4% 1% 1% 1% 37% 11% 85 Giannini Foundation Research Report 348 Table Fn.E3. Risk Management - Rank of Selected Risk Sources That May Be Specific to Region: Mean Ranking by Region Mean Ranks of Risk Sources Region Drought Irrigation Water Supply Problems Hail Far North Mean Rank 3.5 4.2 5.4 Observations (n) 12 10 10 North Coast Mean Rank 5.1 4.7 6.6 Observations (n) 434 461 380 Central Coast - North Mean Rank 5.4 5.0 7.2 Observations (n) 131 128 116 Central Coast - South Mean Rank 5.1 4.8 7.6 Observations (n) 264 256 196 South Coast Mean Rank 4.0 3.2 7.4 Observations (n) 209 248 132 Sacramento Valley Mean Rank 5.8 5.5 5.6 Observations (n) 425 424 453 San Joaquin - North Mean Rank 5.9 5.5 5.5 Observations (n) 536 580 621 San Joaquin - Central Mean Rank 5.9 4.6 3.9 Observations (n) 573 676 O 1 ~I 817 San Joaquin - South Mean Rank 5.5 4.4 4.9 Observations (n) 486 543 534 Sierra Nevada Mean Rank 4.0 4.2 5.1 Observations (n) 70 59 63 Desert Mean Rank 4.8 3.7 7.7 Observations (n) 105 114 69 86 A Statistical Profile of Horticultural Crop Farm Industries in California Table Fn.E4. Risk Management - Ranking of Preferences for Risk Management Tools: Mean Ranking by Region and Crop Risk Management Tools Crop Insurance Different Regions Multiple Com- modities Gov't Programs Hedging with Futures or Options Forward Contracting Diversified Marketing Other All Fruit and Nut Crops Observations (n) 5,224 2,023 2,853 2,975 1,777 2,644 3,044 1,372 Mean Preference Ranking by Region Far North 3.3 7.5 4.3 4.0 7.0 6.5 2.8 8.0 North Coast 2.5 5.6 3.5 4.2 5.6 3.1 2.8 2.0 Central Coast - No 3.0 5.1 3.2 4.4 5.6 3.6 2.7 1.0 Central Coast - So. 2.2 4.0 3.0 4.5 6.8 4.8 2.9 2.1 South Coast 2.5 6.2 2.5 3.5 6.0 4.3 3.4 1.6 Sacramento Valley 1.9 5.3 3.1 3.6 5.8 3.5 2.9 2.2 San Joaquin - N. 1.8 4.7 3.3 3.9 5.3 3.6 3.0 3.1 San Joaquin - Cen. 1.7 4.8 3.4 3.1 5.3 3.9 2.8 2.1 San Joaquin - S. 1.5 5.5 3.1 3.2 5.2 3.5 3.3 2.6 Sierra Nevada 1.4 5.0 4.3 2.8 5.5 2.6 3.6 3.5 Desert 3.1 3.2 2.8 3.7 5.8 4.3 2.8 4.0 Mean Preference Ranking by Crop Berries 1.7 3.0 2.0 3.5 8.0 8.0 1.0 1.0 Citrus 1.7 3.9 2.8 4.0 6.0 5.0 6.2 3.2 Grapes 1.8 5.0 3.6 3.0 5.2 3.1 2.7 2.4 Nuts 2.1 5.2 3.2 3.9 5.3 3.6 3.0 2.4 Apples and Pears 2.2 5.4 2.9 4.6 6.2 4.3 2.6 3.5 Stone Fruits 1.6 4.8 2.8 3.2 6.2 4.5 3.4 2.5 Tropicals 1.7 6.1 3.2 3.1 6.6 4.1 3.3 1.0 87 Giannini Foundation Research Report 348 Table Fn.E5. Risk Management - Availability and Utilization of Risk Management Tools: Rates of Availability and Utilization and Mean Ranking of Preference by Crop Mean Ranking of Risk Management Tools Hedging Multiple Govern- with Forward Crop Different Com- ment Futures or Con- Diversified Insurance Regions modities Programs Options tracting Marketing Other All Pruit and Nut Crops (Total Observations = = 8,791) Obs. with Availability 4,284 627 1,518 1,285 251 1,114 1,427 234 Availability Rate* 49% 7% 17% 15% 3% 13% 16% 3% Utilization Rate b 69% 39% 63% 60% 27% 67% 60% 75% Mean Ranking 1.8 3.7 2.4 3.0 4.5 2.4 2.4 2.4 Berries (Total Observations = 144) Obs. with Availability 33 17 22 18 3 7 27 8 Availability Rate 23% 12% 15% 13% 2% 5% 19% 6% Citrus (Total Observations = 1,021) Obs. with Availability 598 96 221 207 37 OS 189 32 Availability Rate 59% 9% 22% 20% 4% 7% 19% 3% Grapes (Total Observations = 2,888) Obs. with Availability 1,495 215 417 339 72 546 495 80 Availability Rate 52% 7% 14% 12% 2% 19% 17% 3% Nuts (Total Observations = 2,776) Obs. with Availability 1,246 169 443 385 96 346 393 64 Availability Rate 45% 6% 16% 14% 3% 12% 14% 2% Apples and Pears (Total Observations = 218) Obs. with Availability 91 20 56 42 5 21 50 9 Availability Rate 42% 9% 26% 19% 2% 10% 23% 4% Stone Fruits (Total Observations = 798) Obs. with Availability 474 71 235 173 24 74 153 14 Availability Rate 59% 9% 29% 22% 3% 9% 19% 2% Tropicals (Total Observations = 946) Obs. with Availability 347 J9 124 121 14 52 120 27 Availability Rate 37% 4% 13% 13% 1% 6% 13% 3% 3 Availability rates were calculated as a ratio of the number of observations with availability to the total number of observations. b Utilization rates were calculated based on the number of observations with availability. Crop-specific utilization rates are not provided due to too few number of observations that utilized the tool. 88 A Statistical Profile oj Horticultural Crop Farm Industries in California Fn.Fl-F6. Crop Insurance Table Fn.Fl . Crop Insurance: Purchase History and Average Number of Purchases for the Last Five Years by Crop Crop Insurance Purchased in the Last Five Years Number of Years Purchased Observations Distribution Yes 1 345 8% Observations 4,496 2 440 10% Distribution 53% 3 468 10% No 4 352 8% Observations 4,062 5 2,841 64% Distribution 47% Mean Number of Purchases by Crop for the Last Five Years Observations Mean Observations Mean Berries 23 3.3 Apples and Pears 100 3.9 Citrus 671 4.4 Stone Fruits 556 4.2 Grapes 1,541 4.2 Tropicals 347 3.0 Nuts 1,208 4.2 Table Fn.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop Total Number Frost or of Farmers Fire Freeze Rain Hail All Fruit and Nut Crops Observations (n) 8,791 439 1,775 1,511 1,534 Percent 5% 20% 17% 17% By Crop Berries Observations (n) 144 6 8 6 Percent 4% 6% 4% Citrus Observations (n) 1,021 48 372 106 180 Percent 5% 36% 10% 18% Grapes Observations (n) 2,888 149 605 701 600 Percent 5% 21% 24% 21% Nuts Observations (n) 2,776 134 445 394 382 Percent 5% 16% 14% 14% Apples and Pears Observations (n) 218 10 30 26 39 Percent 5% 14% 12% 18% Stone Fruits Observations (n) 798 43 200 199 254 Percent 5% 25% 25% 32% Tropicals Observations (n) 946 54 117 77 73 Percent 6% 12% 8% 8% 89 Giannini Foundation Research Report 348 Table Fn.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance Risk of Crop Loss Was High Expected Water Supplies to Be Cut Back Insurance Req'd to Qualify for Other USDA Programs Expected to Receive Lower Prices for Crops Bank or Other Lender Required Insurance Other All Fruit and Nut Crops Mean Rank No. of Observations that Provided Ranks By Crop 1.2 3,414 Berries Mean Rank 1.2 Observations (n) 19 Citrus Mean Rank 1.3 Observations (n) 530 Grapes Mean Rank 1,2 Observations (n) 1,181 Nuts Mean Rank 1.2 Observations (n) 900 Apples and Pears Mean Rank 1.3 Observations (n) 81 Stone Fruits Mean ranking 1.2 Observations (n) 458 Tropicals Average Rank 1.4 Observations (n) 245 3.4 960 3.8 7 3.4 137 3.5 337 3.4 246 3.9 22 3.8 110 2.7 101 2.2 1,593 2.6 1,376 2.3 11 1.9 275 2.6 480 2.2 430 2.1 31 2.0 239 2.1 127 2.6 11 2.5 226 2.6 442 2.5 389 2.5 31 2.8 175 2.7 102 2.7 1,194 4.2 9 3.4 121 2.6 472 2.6 326 2.2 35 2.6 172 3.8 59 1.5 1,048 2.3 11 1.3 158 1.5 379 1.4 265 20 1.8 102 1.6 113 90 A Statistical Profile of Horticultural Crop Farm Industries in California Table Fn.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop Major Never Lost Couldn't Source of Too Enough Find Do Not Not Risk Not Much Prod'n or Premium Know- Understand Available Insured Paper- Revenue Cost ledgable Crop for My Cause work to File Too Insurance Insurance Crop of Loss to Apply Claim High Agent Program Other All Fruit and Nut Crops Mean Rank 2.3 2.8 3.2 1.7 1.8 4 2.7 1.5 No. of Obs. that 1,850 1,279 1,248 2,291 2,453 936 1,772 1,748 Provided Ranks By Crop Berries Mean Rank 1.5 3.6 4.4 2.7 2.1 3.7 2.8 3.7 Obs. (n) 73 26 22 38 41 25 36 25 Citrus Mean Rank 2.1 2.9 3.1 1.8 1.8 3.9 2.7 1.4 Obs. (n) 211 129 146 217 270 106 195 196 Grapes Mean Rank 3.2 2.8 3.3 1.6 1.8 4 2.9 1.4 Obs. (n) 435 454 408 827 830 322 564 591 Nuts Mean Rank 2.4 2.7 3.1 1.6 1.8 4.2 2.8 1.5 Obs. (n) 494 394 386 773 765 262 517 605 Apples and Pears Mean Rank 1.6 2.4 2.9 2.1 2.2 3.4 2.3 1.6 Obs. (n) 62 37 36 46 71 29 56 47 Stone Fruits Mean Rank 2.4 3.1 3.3 1.8 1.8 4.1 2.9 1.6 Obs. (n) 202 111 118 194 248 88 150 144 Tropicals Mean Rank 1.4 2.7 2.9 2 2.1 3.5 22.3 1.8 Obs. (n) 373 128 132 196 228 104 254 140 91 Giannxm Foundation Research Report 348 Table Fn.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop Compensate Compensate Guarantee Guarantee for a Higher for a Compensate Guarantee Costs of Replace- Level of Loss of for a Cash Establishing ment Costs Production Gross Loss of Production Orchard or of a Crop Loss Sales Profit Costs Vineyard Inventory Other All Fruit and Nut Crops Mean Ranking 2.0 2.3 2.1 2.4 3.6 3.5 1.5 Observations that 3,447 2,889 3,133 2,907 2,106 2,208 2,216 Provided Ranks By Crop Berries Mean Rank 2.2 2.4 Observations (n) 46 43 Citrus Mean Rank 2.2 2.2 Observations (n) 433 383 Grapes Mean Rank 2.0 2.3 Observations (n) 1,242 1,026 Nuts Mean Rank 2.0 2.4 Observations (n) 967 784 Apples and Pears Mean Rank 2.4 2.0 Observations (n) 77 76 Stone Fruits Mean Rank 2.0 2.2 Observations (n) 384 317 Tropicals Average Rank 1.9 2.2 Observations (n) 298 260 2.0 51 2.1 427 2.2 1,067 2.1 891 2.0 80 2.0 342 2.1 275 2.3 45 2.4 426 2.5 981 2.4 824 2.2 84 2.4 312 2.7 235 4.5 30 4.0 238 3.4 794 3.5 607 3.5 55 3.8 212 3.7 170 3.2 41 3.6 267 3.4 785 3.5 621 3.9 50 3.7 221 3.0 223 2.0 43 1.4 252 1.6 666 1.3 741 1.8 0.1 1.7 192 1.4 261 92 A Statistical Profile of Horticultural Crop Farm Industries in California Table Fn.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago Risk Management Is Becoming More Familiar Becoming More Important with Crop Insurance Response Obs. (n) Percent of Farms Obs. (n) Percent of Farms All Fruit and Nut Crops Yes 4,456 57% 4,670 59% No 3,386 43% 3,248 41% By Crop Berries Yes 79 63% 60 47% No 47 37% 68 53% Citrus Yes 593 64% 674 72% No 329 36% 266 28% Grapes Yes 1,468 57% 1,548 59% No 1,116 43% 1,065 41% Nuts Yes 1,235 50% 1,275 52% No 1,216 50% 1,183 48% Apples and Pears Yes 120 61% 115 58% No 76 39% 85 43% Stone Fruits Yes 546 74% 537 72% No 188 26% 208 28% Tropicals Yes 415 50% 461 55% No 414 50% 373 45% 93 Giannini Foundation Research Report 348 Fn.Gl-G3. Financial Characteristics Table Fn.Gl . Financial Characteristics - Mean Values of Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts by Region and Crop Gross Off-Farm Agricultural Income Share Sales Assets Debts Obs. Mean Obs. Mean Obs. Mean Obs. Mean (n) (%) (n) ($) (n) ($) (n) (S) All Fruit/Nut Crops 6,240 64% 7,163 $329,769 4,553 $1,372,641 2,596 $597,519 By Region Far North 24 65% 23 $78,389 18 $492,956 15 $89,800 North Coast 608 64% 728 $341,489 407 $3,102,166 227 $1,121,098 Central Coast - N. 158 65% 220 $607,672 139 $2,146,819 88 $976,451 Central Coast - S. 404 69% 503 $482,051 312 $1,798,470 171 $566,123 South Coast 336 71% 369 $234,375 205 $870,370 76 $399,519 Sacramento Valley 868 61% 1,049 $252,822 695 $1,257,502 422 $612,029 San Joaquin - N. 1,189 64% 1,417 $237,255 925 $994,750 530 $372,344 San Joaquin - Cen. 1,138 63% 1,396 $297,866 890 $1,037,708 542 $478,801 San Joaquin - S. 869 61% 1,088 $525,404 733 $1,410,843 436 $767,603 Sierra Nevada 109 67% 133 $99,992 78 $769,812 35 $179,079 Desert 208 71% 235 $197,878 149 $835,330 54 $484,366 By Crop Berries 62 55% 108 $943,724 66 $660,609 46 $487,725 Citrus 735 65% 867 $384,775 561 $1,373,662 272 $836,360 Grapes 1,795 62% 2,242 $432,251 1,397 $2,176,232 845 $887,724 Nuts 1,977 66% 2,306 $217,954 1,481 $922,464 841 $356,301 Apples and Pears 151 70% 178 $249,399 116 $925,985 75 $531,143 Stone Fruits 523 58% 697 $384,057 471 $1,205,851 303 $488,491 Tropicals 669 67% 765 $186,702 461 $767,196 214 $297,253 94 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Fn.G2. Financial Characteristics - Distributions of Off-Farm Income Shares and Gross Agricultural Sales Observations (n) Distribution (Percent) Cumulative Percent Distribution of Off-Farm Income Shares - Off-Farm Income Share Class 0% 113 2% 2% 1-10% 571 9% 11% 1 1-20% 362 6% 17% 21-30% 405 6% 23% 31-40% 227 4% 27% 41-50% 808 13% 39% 51-60% 269 4% 44% 61-70% 303 5% 48% 71-80% 880 14% 62% 81-90% 716 11% 74% 91-100% 1,673 26% 100% Distribution of Gross Agricultural Sales - f^rn^s A (jti cultural Salp^ fla« fin 'til OOO^ 0-10 971 14% 14% 10-50 2,371 33% 47% 50-100 1,215 17% 64% 100-500 1,831 26% 89% 500-1,000 369 5% 95% 1,000-2,000 198 3% 97% 2,000-5,000 125 2% 99% 5,000 and Greater 60 1% 100% 95 Giannini Foundation Research Report 348 Table Fn.G3. Financial Characteristics - Mean Agricultural Sales, Mean Assets, and Mean Debts by Off-Farm Income-Share Class and by Fruit and Nut Acreage Class Gross Agricultural Sales Assets Debts Obs. (n) Mean ($) Obs. (n) Mean ($) Obs. (n) Mean ($) By Off-Farm Income Share 0% 92 $1,351,004 68 $2,600,574 64 $1,062,088 1-10% 496 $631,486 370 $2,361,199 241 $850,794 1 1-20% 310 $428,957 225 $1,933,970 140 $737,191 21-30% 359 $262,856 237 $1,865,528 157 $1,106,204 31-40% 200 $367,356 133 $1,530,352 75 $431,678 41-50% 711 $195,045 484 $947,314 272 $339,425 51-60% 236 $147,876 183 $823,888 113 $224,091 61-70% 269 $120,161 184 $830,865 99 $180,369 71-80% 769 $111,200 505 $674,919 253 $197,676 81-90% 630 $65,096 422 $525,995 188 $158,035 91-100% 1,303 $90,837 933 $591,240 476 $268,871 By Acreage Class (Fruit and Nut Acres) 0-10 1,382 $22,808 816 $225,017 318 $89,841 11-20 1,450 $42,310 918 $366,248 442 $123,111 21-30 634 $81,225 394 $519,380 204 $171,757 31-40 681 $94,760 447 $598,394 266 $185,170 41-50 365 $136,457 227 $772,428 137 $231,088 51-60 317 $146,059 218 $848,667 148 $244,472 61-70 232 $194,442 153 $929,118 96 $296,273 71-80 249 $188,603 166 $1,019,823 114 $296,093 81-90 119 $263,771 77 $1,380,535 54 $358,793 91-100 165 $219,702 108 $1,169,156 67 $355,970 101-200 742 $395,419 480 $1,880,161 334 $543,761 201-500 555 $950,949 389 $3,565,975 293 $1,370,279 501-1,000 164 $2,172,834 104 $7,126,122 83 $2,264,936 1 ,000 and Greater 105 $6,840,450 53 $24,888,016 39 $11,257,006 96 A Statistical Profile oj Horticultural Crop Farm Industries in California Vegetables Vg.Al-A2. Size and Regional Profile Table Vg.Al . Size and Regional Profile - Number of Farms and Average Vegetable Acres per Farm by Region and Crop and Distribution of Vegetable Acreage No. of Mean Standard Farms (n) Distribution Vegetable Acres Deviation By Region Far North 17 4% 39 60 North Coast 31 7% 19 35 Central Coast - North 78 18% 650 1,170 Central Coast - South 58 13% 205 384 South Coast 26 6% 993 3,918 Sacramento Valley 54 12% 565 672 San Joaquin - North 63 14% 780 1,442 San Joaquin - Central 54 12% 513 1,133 San Joaquin - South 19 4% 317 348 Sierra Nevada 6 1% 64 140 Desert 37 8% 210 341 By Crop VI: Beans, peas, garlic, onions, leeks 51 12% 300 613 V2: Lettuce, cabbages, other leafy vegetables, 71 16% 755 1,204 broccoli, cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, other 67 15% 232 783 gourd family V4: Tomatoes, peppers, eggplants, tomatillos 137 31% 641 1,130 V5: Carrots, celery, asparagus, mushrooms 65 15% 222 451 parsley, other herbs V6: Other unspecified vegetables 52 12% 465 2,772 By Acreage Class (Vegetable Acres) Nc .(« ) Distribution Cumulative Percent 0-10 126 28% 28% 11-20 40 10% 39% 21-30 13 3% 42% 31-40 10 2% 44% 41-50 10 2% 46% 51-60 7 2% 48% 61-70 9 2% 50% 71-80 12 3% 53% 81-90 4 1% 53% 91-100 10 2% 56% 101-200 29 7% 62% 201-500 60 14% 76% 501-1,000 55 12% 88% 1,000 and Greater 52 12% 100% 97 Giannini Foundation Research Report 348 Table Vg.A2. Size and Regional Profile - Distribution of Vegetable Crops by Crop and Region Cen. Cen. Far North Coast Coast North Coast No. So. South Coast Sac. Valley San Joaq. No. San Joaq. Cen. San Joaq. So. Sierra Nevada Desert VI: Beans, peas, garlic, onions, leeks Observations - - - 17 7 11 6 Row Distribution 33% 14% 22% 12% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Observations - - 44 10 5 Row Distribution 62% 14% 7% V3: Melons, cucumbers, squash, other gourd family Observations - 7 5 5 8 5 10 10 5 7 Row Distribution 10% 7% 7% 12% 7% 15% 15% 7% 10% V4: Tomatoes, peppers, eggplants, tomatillos, parsley, other herbs Observations - 7 12 8 6 38 34 21 Row Distribution 5% 9% 6% 4% 28% 25% 15% V5: Carrots, celery, asparagus, mushrooms Observations 6 6 10 6 7 8 6 11 Row Distribution 9% 9% 15% 9% 11% 12% 9% 17% V6: Other unspecified vegetables Observations - 8 6 12 4 7 5 Row Distribution 15% 12% 23% 8% 13% 10% Note: Cells with less than three observations are indicated by 98 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Vg.A3. Size and Regional Profile - Number of Farms and Average Vegetable Acres per Farm for Selected Major Crops Standard Primary Crop 3 Observations (n) Distribution Mean Acres Deviat Total Ohsprvntiorm 281 Asparagus 14 5% 426 665 Broccoli 5 2% 414 620 Cantaloupe 5 2% 318 333 Carrots 9 3% 172 196 Cauliflower 416 277 Garlic 244 239 Lettuce 33 12% 952 1,332 Mushrooms 12 4% 4 2 Onions 20 7% 367 526 Peppers 18 6% 298 496 Spinach 17 6% 1,084 1,400 Tomatoes (Fresh plus Processed) 148 52% 705 1,207 a The list of primary crops was selected using the states crop revenue statistics. The revenue for each of these crops in California exceeded $100 million in 2001 Note: Cells with less than five observations are indicated by 99 Giannini Foundation Research Report 348 Vg.Bl-B3. Crop Diversification Table Vg.BI . Crop Diversification - Diversification Patterns across Crop Categories and Average Acres in Crop Diversification Number of Share of Crop Mean Crops Farmers (n) Farmers Category Acres Total 437 100% Vegetables Only 228 52% Vegetables 468 Vegetables and Field Crops 114 26% Vegetables 547 Field Crops 888 Vegetables and Fruits/Nuts 50 11% Vegetables 144 Fruits/Nuts 888 Vegetables, Field Crops, and Fruits/Nuts 38 9% Vegetables 842 Field Crops 663 Fruits/Nuts 208 Vegetables, Ornamentals, and Other 7 2% Vegetables 15 Ornamentals 9 100 A Statistical Profile of Horticultural Crop Farm Industries in California Table Vg.B2. Crop Diversification - Diversification Patterns (within Vegetables) of Vegetable-Only Farmers: Distribution of Farmers and Average Sales Share by the Number of Vegetable Crops Diversified Diversification Patterns Number of Farms Growing Vegetables Only Grouped by the Number of Vegetable Crops per Farm Number of Crops Total Six or Obs. One Two Three Four Five More All Vegetable Crops Observations (n) 228 112 40 21 22 12 21 Row Percent 49% 18% 9% 10% 5% 9% Mean Acres 299 455 321 483 1,280 1,065 Row Percent By Crop VI: Beans, peas, garlic, 26 50% 31% 4% 8% 8% 0% onions, leeks V2: Lettuce, cabbages, other 61 18% 18% 11% 21% 8% 23% leafy vegetables, broccoli, cauliflower, artichokes, radishes V3: melons, cucumbers, 26 58% 19% 12% 8% 0% 4% squash, other gourd family V4: Tomatoes, peppers, 37 22% 38% 19% 5% 8% 8% eggplants, tomatillos V5: Carrots, celery, asparagus, 39 77% 3% 8% 3% 5% 5% mushrooms, parsley, other herbs V6: Other unspecified 39 90% 3% 0% 5% 0% 3% vegetables Mean Crop Sales Shares Farmers Grouped by Number of Vegetables Being Grown Six or One Two Three Four Five More First Vegetable 97% 65% 54% 46% 45% 30% Second Vegetable 35% 25% 19% 17% 20% Third Vegetable 22% 17% 16% 14% Fourth Vegetable 15% 10% 12% Fifth Vegetable 10% 10% Sixth Vegetable Giannini Foundation Research Report 348 Table Vg.B3. Crop Diversification - Number of Organic Farms and Average Vegetable Acres per Farm by Crop Mean Acres of Organic Farms Total Organic Transitional Number of Vegetable Vegetable Organic Total Organic Farms Land Land Vegetable Land Obs.(n) Obs.(n) Distribution Acres Obs. (n) Acres Obs.(n) Acres By Region All Vegetable Crops 443 04 14% 153 49 61 18 27 By Crop VI: Beans, peas, garlic, onions, leeks 51 3 6% 13 V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes 71 15 21% 350 12 93 3 4 V3: Melons, cucumbers, squash, other gourd family 67 6 9% 18 6 20 V4: Tomatoes, peppers, eggplants, tomatillos 137 18 13% 395 14 58 5 73 V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs 65 8 12% 22 6 6 V6: Other unspecified vegetables 52 14 27% 120 9 177 7 10 Note: Cells with less than three observations are indicated by 102 A Statistical Profile oj Horticultural Crop Farm Industries in Calijornia Vg.Cl-C4. Marketing Table Vg.CI . Marketing - Distribution of Use Type (Processing versus Fresh) and Average Volume Share Designated to Specific Use by Crop Use Type" in Terms of Volume of Share Designated Average Volume Share Mainly Mainly Processing Fresh To To To Farms Farms Total Mainly Mainly Processing/ Designating to Designating to Obs. Processing Fresh Fresh Processing Use Fresh Use All Vegetable Crops Observations (n) 443 114 298 31 114 298 Percent 26% 67% 7% 99.4% 99.0% VI: Beans, peas, garlic, onions, leeks Observations (n) 51 18 29 4 18 29 Percent 35% 57% 8% 92.5% 99.4% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Observations (n) 71 2 54 15 2 54 Percent 3% 76% 21% 93% 99.0% V3: Melons, cucumbers, squash, other gourd family Observations (n) 67 4 60 3 4 60 Percent 6% 90% 4% 100.0% 99.9% V4: Tomatoes, peppers, eggplants, tomatillos Observations (n) 137 82 49 6 82 49 Percent 60% 36% 4% 99.5% 99.8% V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Observations (n) 65 7 55 3 7 55 Percent 11% 85% 5% 100.0% 99.8% V6: Other unspecified vegetables Observations (n) 52 - 51 51 Percent — 98% 99.7% a Mainly processing (or Fresh) was indicated by an output volume share greater than 80 percent and Processing/Fresh included farmers that were not Mainly Processing or Mainly Fresh. Note: Cells with less than three observations are indicated by 103 Giannini Foundation Research Report 348 Table Vg.C2. Marketing - Marketing Channels for Processing-Use Crops: Number of Farms Using Specific Marketing Channels and Average Volume Share for Each Marketing Channel by Crop Marketing Channels Sold to Processor Sold to Processor under Contract under Contract Total Coop- Obs. erative with Predetermined Price without Predetermined Price Partici- pation Plan Spot Market Other All Vegetable Crops Observations (n) 153 17 104 30 15 7 17 Distribution (Percent) 2 1 1 % 68% 20% 10% 5% 11% Avg Vol. Shares (Percent) 66% 93% 80% 62% 44% 74% VI: Beans, peas, garlic, onions, leeks Observations (n) 23 5 8 9 2 2 Distribution (Percent) 22% 35% 39% 9% 9% Avg Vol. Shares (Percent) 75% 100% 82% 95% 100% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Observations (n) 20 3 16 5 6 3 3 Distribution (Percent) 15% 80% 25% 30% 15% 15% Avg Vol. Shares (Percent) 33% 91% 52% 58% 33% 13% V3: Melons, cucumbers, squash, other gourd family Observations (n) 5 - 2 3 Distribution (Percent) - 40% 60% Avg Vol. Shares (Percent) - 100% 100% V4: Tomatoes, peppers, eggplants, tomatillos Observations (n) 88 7 69 1 ] 4 4 7 Distribution (Percent) 8% 78% 13% 5% 5% 8% Avg Vol. Shares (Percent) 79% 94% 91% 39% 52% 73% V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Observations (n) 12 2 7 2 2 0 2 Distribution (Percent) 17% 58% 17% 17% 0% 17% Avg Vol. Shares (Percent) 50% 82% 50% 65% 100% V6: Other unspecified vegetables Observations (n) 5 - 2 2 Distribution (Percent) - 40% 40% Avg Vol. Shares (Percent) - 100% 100% The sums over the marketing channels are greater than the total number of farmers in each category because some fanners use multiple channels. 104 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Vg.C3. Marketing - Grower/Shippers (Fresh-Use Only): Number of Grower/Shippers and Volume Sold at Predetermined Price by Crop No. of Fresh- Crop Farmers Grower/Shippers Growers Only Distribution of Grower/Shippers versus Growers Only All Vegetable Crops Observations (n) 310 41 269 Row Percent 13% 87% By Category VI: Beans, peas, garlic, onions, leeks 6% 94% V2: Lettuce, cabbages, other leafy vegetables, broccoli, 65 18% 82% cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, other gourd family 59 15% 85% V4: Tomatoes, peppers, eggplants, tomatillos 52 10% 90% V5: Carrots, celery, asparagus, mushrooms, parsley, 54 15% 85% other herbs V6: Other unspecified vegetables 48 10% 90% Average Output Share Sold by Grower/Shippers at Predetermined Prices Only one grower/shipper sold crops at a predetermined price and the share sold at the predetermined price was 100%. 105 Giannini Foundation Research Report 348 Table Vg.C4. Marketing - Marketing Channels for Fresh-Use Crops (Growers Only): Number of Farmers Using Specific Marketing Channels and Average Volume Share by Crop Distribution of Farmers Using Specific Marketing Channel 3 Direct Direct to Total to Marketing Independent Commercial Obs. Consumers Cooperative Shipper/Broker Buyers Other All Vegetable Crops Observations (n) 327 101 19 103 90 14 Distribution (Percent)' 1 3 1 % 6% 31% 28% 4% Avg Vol. Shares (Percent) 79% 51% 90% 68% 57% VI: Beans, peas, garlic, onions, leeks Observations (n) 33 - 13 6 Distribution (Percent) - 39% 18% Avg Vol. Shares (Percent) - 99% 96% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Observations (n) 68 15 9 33 15 5 Distribution (Percent) 22% 13% 49% 22% 7% Avg Vol. Shares (Percent) 63% 48% 89% 53% 64% V3: Melons, cucumbers, squash, other gourd family Observations (n) 61 19 14 18 Distribution (Percent) 3 1 % 23% 30% Avg Vol. Shares (Percent) 90% 92% 80% V4: Tomatoes, peppers, eggplants, tomatillos Observations (n) 57 27 12 20 Distribution (Percent) 47% 21% 35% Avg Vol. Shares (Percent) 77% 79% 62% V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Observations (n) 57 15 21 17 Distribution (Percent) 26% 37% 30% Avg Vol. Shares (Percent) 72% 89% 60% V6: Other unspecified vegetables Observations (n) 51 24 10 14 Distribution (Percent) 47% 20% 27% Avg Vol. Shares (Percent) 89% 93% 75% 3 The sums over Lhe marketing channels can be greater than 100 percent because some farmers use multiple channels. Note: Cells with less than five observations are indicated by *— *. 106 A Statistical Profile of Horticultural Crop Farm Industries in California Vg.Dl-D3. Yield, Price, and Profit Fluctuations Table Vg.Dl . Yield, Price, and Profit Fluctuation - Yield Deviation (Percent) from Individual Five- Year Averages: Sample Mean 1997-2001 and All-Year Sample Mean by Region and Crop Yield Deviation from Five-Year Average Sample Mean by Year (1997-2001) Observations (n) Mean 2001 195 10% 2000 195 6% 1999 195 6% 1998 195 8% 1997 195 8% Ail-Year Average 195 8% All-Year Samnlp Mean Rv Rpcnnn Observations (n) Ail-Year Mean Far North 6 8% NnrtVi (~ n^cr 7 10% Central Coast - North 39 6% Central Coast - South 19 6% South Coast 1 1 5% Sacramento Valley 31 5% San Joaquin - North 34 10% San Joaquin - Central 26 10% San Joaquin - South 7 11% Sierra Nevada _ _ Desert 1 3 8% Ail-Year Sample Mean By Crop Observations (n) All- Year Mean VI: Beans, peas, garlic, onions, leeks 19 9% V2: Lettuce, cabbages, other leafy vegetables, broccoli, 42 6% cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, other gourd family 20 9% V4: Tomatoes, peppers, eggplants, tomatillos 77 7% V5: Carrots, celery, asparagus, mushrooms, 26 12% parsley, other herbs V6: Other unspecified vegetables 11 6% 107 Giannini Foundation Research Report 348 Table Vg.D2. Yield, Price, and Profit Fluctuation - Largest Yield, Price, and Profit Fluctuations: Number of Farms per Fluctuation Range by Crop Yield Price Profit Fluctuation No. of Percent No. of Percent No. of Percent Range (Percent) Obs. of Farms Obs. of Farms Obs. of Farms All Vegetable Crops 0-9 166 46% 133 40% 108 34% 10-24 106 29% 95 29% 99 31% 25-49 39 11% 52 16% 55 17% 50-74 35 10% 37 11% 32 10% 75 or More 14 4% 15 5% 25 8% Total 360 100% 332 100% 319 100% VI: Beans, peas, garlic, onions, leeks 0-9 11 28% 12 32% 11 30% 10-24 12 31% 8 22% 11 30% 25-49 8 21% 5 14% 8 22% 50-74 5 13% 12 32% 7 19% 75 or More 3 8% 0% 0% Total 39 11% 37 11% 37 12% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes 0-9 35 57% 23 43% 20 40% 10-24 20 33% 11 20% 12 24% 25-49 2 3% 10 19% 6 12% 50-74 3 5% 7 13% 6 12% 75 or More 1 2% 3 6% 6 12% Total 61 17% 54 16% 50 16% V3: Melons, cucumbers, squash, other gourd family 0-9 22 41% 21 41% 13 26% 10-24 12 22% 15 29% 19 38% 25-49 5 9% 9 18% 7 14% 50-74 10 19% 3 6% 6 12% 75 or More 5 9% 3 6% 5 10% Total 54 15% 51 15% 50 16% V4: Tomatoes, peppers, eggplants, tomatillos 0-9 59 52% 41 39% 30 30% 10-24 33 29% 42 40% 37 37% 25-49 15 13% 14 13% 22 22% 50-74 5 4% 7 7% 6 6% 75 or More 1 1% 2 2% 5 5% Total 113 31% 106 32% 100 31% continued on following page 108 A Statistical Profile of Horticultural Crop Farm Industries in California Table Vg.D2. Continued V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs 0-9 22 41% 19 39% 16 34% 10-24 16 30% 1 1 22% 12 26% 25-49 4 7% 9 18% 8 17% 50-74 11 20% 6 12% 4 9% 75 or More 1 2% 4 8% 7 15% Total 54 15% 49 15% 47 15% V6: Other unspecified vegetables 0-9 17 44% 17 49% 18 51% 10-24 13 33% 8 23% 8 23% 25-49 5 13% 5 14% 4 11% 50-74 1 3% 2 6% 3 9% 75 or More 3 8% 3 9% 2 6% Total 39 11% 35 11% 35 11% 109 Giannini Foundation Research Report 348 Table Vg.D3. Yield, Price, and Profit Fluctuation - Main Cause for Lowest Profit by Region, Crop, Use, and Processor Pricing Method (with and without Predetermined Price) Main Cause for Lowest Profit (Percent of Farmers Who Answered) Total No. Low Low Obs. that Market Price Market Price Answered High due to High due to Main Poor Poor Input Domestic Increased Cause Yield Quality Cost Prod'n Imports Other All Vegetable Crops Observations (n) 416 76 22 56 124 86 52 Row Percent 18% 5% 13% 30% 21% 13% By Region Far North 16 31% 6% 13% 0% 13% 38% North Coast 28 36% 7% 21% 7% 7% 21% Central Coast - North 74 9% 5% 20% 41% 16% 8% Central Coast - South 56 20% 9% 5% 27% 27% 13% South Coast 26 4% 8% 12% 23% 42% 12% Sacramento Valley 44 16% 4% 16% 37% 18% 8% San Joaquin - North 59 19% 0% 14% 34% 27% 7% San Joaquin - Central 40 24% 6% 10% 37% 12% 10% San Joaquin - South 17 18% 6% 12% 29% 18% 18% Sierra Nevada 6 67% 0% 17% 0% 0% 17% Desert 36 11% 6% 8% 28% 28% 19% By Crop VI: Beans, peas, garlic, 40 28% 9% 15% 17% 22% 9% onions, leeks V2: Lettuce, cabbages, other 67 3% 9% 15% 51% 16% 6% leafy vegetables, broccoli cauliflower, artichokes, radishes V3: Melons, cucumbers, squash, 65 22% 5% 9% 22% 22% 22% other gourd family V4: Tomatoes, peppers, 127 23% 2% 17% 30% 19% 9% eggplants, tomatillos V5: Carrots, celery, asparagus, 63 19% 3% 10% 19% 35% 14% mushrooms, parsley, other herbs V6: Other unspecified vegetables 48 13% 8% 13% 38% 10% 19% continued on following page 110 A Statistical Profile of Horticultural Crop Farm Industries in California Table Vg.D3. Continued Main Cause for Lowest Profit (Percent of Farmers Who Answered) Total No. Low Low Obs. that Market Price Market Price Answered High due to High due to Main Poor Poor Input Domestic Increased Cause Yield Quality Cost Prod'n Imports Other By Processor Pricing Method Predetermined Price 94 15% 6% 19% 34% 18% 7% No Predetermined Price 24 21% 8% 8% 38% 25% By Use 2 Mainly Processing 109 19% 5% 17% 31% 21% 7% Mainly Fresh 279 19% 5% 13% 27% 21% 16% 3 Mainly Processing (or Fresh) was indicated by an output volume share greater than 80 percent and Processing/Fresh included farmers that were neither Mainly Processing nor Mainly Fresh. in Giannini Foundation Research Report 348 Vg.El-E6. Risk Management Table Vg.El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop Mean Ranking of Risk Sources Irrig. Input Output Adverse Water Price Price Temper- Supply Fluctu- Fluctu- Quar- ature Floods Drought Disease Problems ation ation Pests antine Hail All Vegetable Crops Mean Ranking Total Obs.(n) 2.3 349 6.0 163 5.5 179 3.6 235 4.5 212 3.2 248 2.2 321 3.5 262 8.1 131 6.7 153 By Crop VI: Beans, peas, garlic, onions, leeks Mean Ranking 3.1 6.4 4.3 3.5 4.1 3.0 1.7 Observations (n) 31 13 19 27 22 25 33 V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Mean Ranking 2.6 5.1 5.5 3.5 Observations (n) 60 35 28 38 V3: Melons, cucumbers, squash, other gourd family Mean Ranking 2.5 6.2 4.6 3.4 Observations (n) 49 19 29 37 V4: Tomatoes, peppers, eggplants, tomatillos Mean Ranking 2.3 6.4 5.8 4.2 Observations (n) 117 61 67 79 4.7 33 4.1 31 80 V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Mean Ranking 2.0 6.2 7.0 3.7 5.0 Observations (n) 50 21 20 35 27 V6: Other unspecified vegetables Mean Ranking 1.9 6.1 5.4 2.8 4.5 Observations (n) 42 14 16 19 19 3.2 46 3.6 31 1.9 88 3.2 38 3.5 20 1.9 58 2.3 47 1.6 104 2.7 44 2.4 35 3.3 20 3.5 49 2.7 45 1.9 88 4.4 32 2.9 28 8.7 7 7.2 25 7.9 18 2.4 54 8.1 17 8.1 10 6.8 9 7.2 20 6.7 21 2.7 59 21 6.4 14 112 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Vg.E2. Risk Management - Ranking of Risk Sources (in Order of Importance): Distribution of Ranks by Crop Mean Ranking of Risk Sources Irrig. Input Output Adverse Water Price Price Rank Temper- ature Floods Drought Disease Supply Problems Fluctu- ation Fluctu- ation Pests Quar- antine Hail Total Responses 349 10 J 1 QQ ivy z. j j 212 248 321 262 131 153 1 Obs. (n) 143 1 4 9 50 T 7 17 1 1 Jo ~> 7 Distribution 41% y lo J 10 ± J 10 13% 19% 49% 10% 2% 5% 2 Obs. (n) 9] 12 26 41 39 DU A7 ft ~> \J£. u 1 ~*> i j Distribution 26% 70/ / la U /o 1 / 10 1 H°/o ±0/0 24% 21% 24% 5% 8% 3 Obs. (n) 47 10 14 45 JJ Jt ■x j 6 Distribution 13% 6% 7% 19% 12% 22% 1 l/o Tin/ 2 l/o -) 0/ Z /o 40/ T /0 4 Obs. (n) 28 17 8 37 19 28 27 45 4 14 Distribution 8% 10% 4% 16% 9% 11% 8% 17% 3% 9% 5 Obs. (n) L9 7 23 33 20 22 17 40 6 8 Distribution 5% 4% 12% 14% 9% 9% 5% 15% 5% 5% 6 Obs. (n) 7 17 25 18 23 16 4 19 5 15 Distribution 2% 10% 13% 8% 11% 6% 1% 7% 4% 10% 7-10 Obs. (n) 14 86 94 25 59 20 14 16 104 90 Distribution 4% 53% 47% 11% 28% 8% 4% 6% 79% 59% Giannini Foundation Research Report 348 Table Vg.E3. Risk Management - Ranking of Selected Risk Sources That May Be Specific to Region: Mean Ranking by Region Mean Ranks of Risk Sources Region Drought Irrigation Water Supply Problems Hail Far North Mean Rank 4.2 3.4 6.5 Observations (n) 7 7 6 North Coast Mean Rank 3.6 4.0 7.3 Observations (n) 11 1 1 6 Central Coast - North Mean Rank 5.4 4.4 7.6 Observations (n) 29 36 30 Central Coast - South Mean Rank 5.5 5.9 7.9 Observations (n) 22 23 1 3 South Coast Mean Rank 6.2 5.0 7.0 Observations (n) 13 17 11 Sacramento Valley Mean Rank 6.2 5.6 6.7 Observations (n) 26 29 24 San Joaquin - North Mean Rank 5.7 4.4 6.1 Observations (n) 31 38 28 San Joaquin - Central Mean Rank 5.2 3.6 5.3 Observations (n) _o 1 o 1 0 San Joaquin - South Mean Rank 6.7 5.2 6.5 Observations (n) 9 9 8 Sierra Nevada Mean Rank 3.3 1.7 Observations (n) 3 3 Desert Mean Rank 5.5 3.8 7.4 Observations (n) 6 11 8 114 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Vg.E4. Risk Management - Availability and Utilization of Risk Management Tools: Rates of Availability and Utilization and Mean Ranking of Preference by Crop Mean Ranking of Risk Management Tools Hedging Multiple Govern- with Forward Crop Different Com- ment Futures or Con- Diversified Insurance Regions modities Programs Options tracting Marketing Other All Vegetable Crops (Total Observations = 443) Obs. with Availability 128 66 175 89 31 95 112 13 Availability Rate 3 29% 15% 40% 20% 7% 21% 25% 3% Utilization Rate b 71% 47% 87% 67% 52% 77% 79% 62% Mean Ranking 2.6 3.0 2.0 3.1 5.0 2.8 2.7 2.8 By Crop VI: Beans, peas, garlic, onions, leeks (Total Observations = 51) Obs. with Availability 16 7 23 16 7 ] 1 10 i i Availability Rate 31% 14% 45% 31% 14% 22% 20% ~> 0/ Z 70 V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes (Total Obs. = 71) Obs. with Availability 7 11 28 4 18 18 i Availability Rate 10% 15% 39% 6% 25% 25% 1 70 V3: Melons, cucumbers, squash, other gourd family (Total Observations = 67) Obs. with Availability 14 8 23 7 7 12 L6 1 Availability Rate 21% 12% 34% 10% 10% 18% 24% 1% V4: Tomatoes, peppers, eggplants, tomatillos (Total Observations = 137) Obs. with Availability 72 28 69 54 15 45 40 3 Availability Rate 53% 20% 50% 39% 11% 33% 29% 2% V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs (Total Observations = 65) Obs. with Availability 11 8 16 5 6 15 2 Availability Rate 17% 12% 25% 8% 9% 23% 3% V6: Other unspecified vegetables (Total Observations = 52) Obs. with Availability 8 4 16 3 3 13 5 Availability Rate 15% 8% 31% 6% 0% 6% 25% 10% a Availability rates were calculated as a ratio of the number of observations with availability to the total number of observations. b Utilization rates were calculated based on the number of observations with availability Utilization rates by crop are not provided due to too few number observations that utilized the tool. 115 Giannini Foundation Research Report 348 Table Vg.E5. Risk Management - Status of Receipt of Government Disaster Payments or Loans by Crop Receipt of Government Disaster Payments or Loans Total Obs. Received Not Qualified Unaware All Vegetable Crops Observations (n) 414 145 154 115 Row Percent 35% 37% 28% By Crop VI: Beans, peas, garlic, onions, leeks Observations (n) 48 27 16 Row Percent 56% 33% 10% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Observations (n) 68 16 35 1 7 Row Percent 24% 51% 25% V3: Melons, cucumbers, squash, other gourd family Observations (n) 62 23 18 21 Row Percent 37% 29% 34% V4: Tomatoes, peppers, eggplants, tomatillos Observations (n) 129 60 42 27 Row Percent 47% 33% 21% V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Observations (n) 57 1 3 24 20 Row Percent 23% 42% 35% V6: Other unspecified vegetables Observations (n) 50 6 19 25 Row Percent 12% 38% 50% 116 A Statistical Profile of Horticultural Crop Farm Industries in California Vg.Fl-F6. Crop Insurance Table Vg.Fl . Crop Insurance: Purchase History and Average Number of Purchases for the Last Five Years by Crop Crop Insurance Purchase in Last Five Years No. of Years Purchased Observations Distribution Yes 1 10 7% Observations 136 2 10 7% Distribution 31% 3 17 13% No 4 or 5 99 72% Observations 30% Distribution 69% Mean Number of Purchases by Crop for the Last Five Years by Vegetable Category Observations Average Years VI: Beans, peas, garlic, onions, leeks 16 3.9 V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, 4 4.5 artichokes, radishes V3: Melons, cucumbers, squash, other gourd family 19 4.1 V4 Tomatoes, peppers, eggplants, tomatillos 79 4.4 V5 Carrots, celery, asparagus, mushrooms, parsley, other herbs 12 4.0 V6 Other unspecified vegetables 6 3.0 Giannini Foundation Research Report 348 Table Vg.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop Peril Total Number of Farmers Fire Frost or Freeze Rain Hail All Vegetable Crops Observations (n) 443 Percent 41 9% 38 9% 63 14% 40 9% By Crop Category VI: Beans, peas, garlic, onions, leeks Observations (n) 5 1 Percent 5 10% 3 6% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, Observations (n) 71 Percent artichokes, radishes V3: Melons, cucumbers, squash, other gourd family Observations (n) 67 Percent 6 9% 8 12% 7 10% 6 9% V4: Tomatoes, peppers, eggplants, tomatillos Observations (n) 137 Percent 21 15% 23 17% 46 34% 25 18% V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Observations (n) 65 Percent 6 9% 3 5% 5 8% 5 8% V6: Other unspecified vegetables Observations (n) 52 Percent 118 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Vg.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance Expected Insurance Expected Bank or Risk of Water Req'd to to Receive Other Crop Supplies Qualify for Lower Lender Loss to Be Other USDA Prices for Required Was High Cut Back Programs Crops Insurance Other Mean Ranking Mean Ranking 1.5 3.4 2.3 2.9 3.2 2.0 Observations that 112 50 78 60 63 31 Provided Ranks Ranking Distribution Ranking n = 112 56 78 60 63 31 1 69% 11% 44% 13% 13% 65% 2 19% 16% 19% 23% 32% 16% 3 7% 21% 17% 35% 10% 3% 4 3% 30% 8% 15% 19% 3% 5 1% 20% 13% 13% 27% 13% 6 2% 2% 0% 0% 0% 0% Total 100% 100% 100% 100% 100% 100% 119 Giannini Foundation Research Report 348 Table Vg.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop Major Never Lost Couldn't Source of Too Enough Find Do Not Not Risk Not Much Prod'n or Premium Know- Understand Available Insured Paper- Revenue Cost ledgable Crop for My Cause work to File Too Insurance Insurance Crop of Loss to Apply Claim High Agent Program Other All Vegetable Crops Mean Rank 1.6 3.0 3.9 2.4 2.5 4.0 3.0 1.7 No. of Obs. that 196 99 85 131 123 82 127 75 Provided Ranks By Crop Category VI: Beans, peas, garlic, onions, leeks Mean Rank 1.5 3.6 3.4 1.9 Obs. (n) 17 10 9 14 V2: Lettuce, cabbages, other leafy vegetables, broccoli, caul Mean Rank 1.3 2.8 4.3 2.7 Obs. (n) 46 18 13 25 V3: Melons, cucumbers, squash, other gourd family Mean Rank 1.1 2.7 3.2 2.8 Obs. (n) 26 9 13 15 V4: Tomatoes, peppers, eggplants, tomatillos Mean Rank 2.3 3.0 4.2 2.5 Obs. (n) 43 33 25 41 V5: Carrots, celery, asparagus, mushrooms, parsley, other h Mean Rank 1.4 3.1 4.0 2.3 Obs. (n) 33 14 10 16 V6: Other unspecified vegetables Mean Rank 1.8 2.9 4.0 2.1 Obs. (n) 31 15 15 20 1.8 3.3 2.2 1.0 11 6 10 3 iflower, artichokes, radishes 2.7 4.7 3.4 1.8 24 14 19 9 2.8 3.5 2.7 1.8 19 11 18 10 2.2 4.2 3.1 1.3 37 29 42 29 erbs 2.8 4.1 3.1 2.0 16 10 18 18 2.9 3.8 3.0 2.8 16 12 20 6 120 A Statistical Profile of Horticultural Crop Farm Industries in California Table Vg.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop Compensate Guarantee for a Compensate Compen- Guaran- Higher for a sate Guaran- tee Costs of Replace- Level of Loss of for a tee Cash Establishing ment Costs Production Gross Loss of Production Orchard or of a Crop Loss Sales Profit Costs Vineyard Inventory Other All Vegetable Crops Mean Ranking 2.2 2.5 2.4 2.2 4.5 3.4 1.4 Observations that 172 157 164 168 86 130 122 Provided Ranks By Crop Category VI: Beans, peas, garlic, onions, leeks Mean Rank 1.6 2.2 2.6 2.0 4.6 3.5 1.0 Obs. (n) 22 17 17 18 5 11 s V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Mean Rank 2.4 2.2 2.2 2.2 4.5 3.4 1.2 Obs. (n) 24 26 22 22 13 20 24 V3: Melons, cucumbers, squash, other gourd family Mean Rank 2.5 2.4 2.1 2.1 4.4 3.2 1.7 Obs. (n) 26 21 27 22 ] 3 21 18 V4: Tomatoes, peppers, eggplants, tomatillos Mean Rank 1.8 2.6 2.7 2.3 4.6 3.6 1.3 Obs. (n) 66 58 55 68 34 45 41 V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Mean Rank 2.9 2.5 2.3 2.2 4.4 3.3 1.7 Obs. (n) 21 22 25 21 13 20 21 V6: Other unspecified vegetables Mean Rank 2.4 2.9 1.8 1.9 4.1 3.0 1.5 Obs. (n) 13 13 18 17 8 13 13 Giannini Foundation Research Report 348 Table Vg.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago Risk Management Is Becoming More Familiar Becoming More Important with Crop Insurance Response Obs. (n) Percent of Farms Obs. (n) Percent of Farms All Vegetable Crops Yes 261 63% 192 46% No 152 37% 221 54% By Crop Category VI: Beans, peas, garlic, onions, leeks Yes 30 65% 21 47% No 16 35% 24 53% V2: Lettuce, cabbages, other leafy vegetables, broccoli, cauliflower, artichokes, radishes Yes 39 57% 21 32% No 29 43% 45 68% V3: Melons, cucumbers, squash, other gourd family Yes 34 56% 28 44% No 27 44% 35 56% V4: Tomatoes, peppers, eggplants, tomatillos Yes 99 75% 82 63% No 33 25% 48 37% V5: Carrots, celery, asparagus, mushrooms, parsley, other herbs Yes 37 59% 29 45% No 26 41% 35 55% V6: Other unspecified vegetables Yes 22 51% 1 1 24% No 21 49% 34 76% A Statistical Profile of Horticultural Crop Farm Industries in California Vg.Gl-G3. Financial Characteristics Table Vg.GI . Financial Characteristics - Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts: Mean Values by Region and Crop Off-Farm Income Share Gross Agricultural Sales Assets Debts Obs. (n) Mean (%) Obs. (n) Mean ($) Obs. (n) Mean ($) Obs. (n) Mean ($) All Vegetable Crops 213 42% 382 $1,111,873 237 ,1 527 166 $939,828 By Region Far North 12 63% 16 $62,066 9 $955,000 4 $75,000 North Coast 21 53% 26 $161,842 18 $689,145 10 $76,100 Central Coast — N. 'XA. 4Q<¥, TV /o 67 u / 37 $685 135 ■4^ v/W ^,1,/-/ 25 $175,920 Central Coast - S. in Q 7 0/ 3/70 A7 Tl CQ7H ^71 23 $208 043 South Coast 15 46% 22 $1,559,639 1 1 $2,124,091 1 io36,Tzy Sacramento Valley 23 31% 48 $1,794,027 32 $2,053,125 21 $524,048 San Joaquin - N. 23 29% 58 $1,388,280 43 $2,447,919 34 $1,065,805 San Joaquin - Cen. 24 46% 43 $730,930 22 $1,458,136 16 $321,719 Con Inoninn > Jdll J UatJ Ulll ~J . 7 25% 16 $1,692,218 12 $2,075,033 8 $1,362,192 Sierra Nevada 3 42% 6 $398,800 Desert 17 47% 33 $887,301 20 $5,909,400 17 $4,495,588 By Crop VI: Beans, peas, garlic 28 44% 44 $608,250 31 $1,466,468 24 $327,104 onions, leeks V2: Lettuce, cabbages, 40 33% 60 $1,618,613 29 $1,204,034 26 $303,385 other leafy vegetables broccoli, cauliflower, artichokes, radishes V3: Melons, cucumbers, 38 48% 59 $664,955 37 $3,769,054 22 $3,432,752 squash, other gourd family V4: Tomatoes, peppers, 54 39% 121 $1,501,913 80 $1,942,069 58 $733,610 eggplants, tomatillos V5: Carrots, celery, ZD 45% 53 $935,042 31 $1,659,129 17 $2,955,282 asparagus, mush- rooms, parsley, other herbs V6: Other unspecified 27 51% 45 $667,170 29 $722,414 19 $372,263 vegetables 123 Giannini Foundation Research Report 348 Table Vg.G2. Financial Characteristics - Distributions of Off-Farm Income Shares and Gross Agricultural Sales Observations (n) Distribution (Percent) Cumulative Percent Range of Off-Farm Income Shares 0% 14 7% 7% 1-10% 47 22% 29% l i_?n°/, ZJ 40% 21-30% 18 8% 49% 31-40% 9 4% 53% 41-50% 31 15% 68% 51-60% 7 3% 71% 61-70% 8 4% 75% 71-80% 16 8% 82% 81-90% 13 6% 88% 91-100% 25 12% 100% Range of Gross Agricultural Sales (in $1,000) 0-10 25 7% 7% 10-50 58 15% 22% 50-100 37 10% 31% 100-500 106 28% 59% 500-1,000 44 12% 71% 1,000-2,000 54 14% 85% 2,000-5,000 42 11% 96% 5,000 and Greater 16 4% 100% 124 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Vg.G3. Financial Characteristics - Mean Agricultural Sales, Mean Assets, and Mean Debts by Off-Farm Income Share Class and by Vegetable Acreage Class Gross Agricultural Sales Assets Debts Obs. Mean Obs. Mean Obs. Mean (n) ($) (n) ($) (n) ($) By Off-Farm Income Share 0% 12 $2,074,943 8 $855,426 7 $68,649 1-10% 47 $1,834,331 31 $2,374,258 27 $494,815 1 1-20% 25 $1,450,183 19 $1,458,500 11 $713,273 21-30% 18 $369,111 L6 $489,875 7 $195,714 31-40% 9 $233,850 5 $406,400 4 $218,750 41-50% 29 $293,362 20 $696,400 17 $214,765 51-60% 7 $158,909 6 $174,500 61-70% 8 $82,625 6 $417,000 4 $81,250 71-80% 15 $232,572 9 $621,000 5 $162,600 81-90% 12 $53,190 6 $729,167 4 $20,125 91-100% 23 $212,901 13 $691,154 7 $44,286 By Acreage Class (Vegetable Acres) 0-10 100 $84,562 59 $489,542 32 $136,500 11-20 44 $143,713 27 $610,815 19 $222,000 21-30 11 $239,031 9 $595,956 6 $185,833 31-40 10 $222,348 6 $235,000 6 $60,500 41-50 9 $284,530 51-60 6 $475,032 5 $464,000 5 $184,000 61-70 7 $275,834 8 $985,875 4 $134,500 71-80 12 $277,050 8 $718,750 5 $56,400 81-90 3 $118,333 3 $550,000 3 $40,000 91-100 9 $720,000 4 $487,500 4 $131,250 101-200 27 $612,080 17 $1,098,706 14 $357,214 201-500 53 $1,675,760 29 $2,014,137 19 $770,947 501-1,000 49 $2,104,033 34 $2,311,247 26 $871,252 1 ,000 and Greater 41 $4,342,697 25 $4,766,700 21 $1,493,637 Giannini Foundation Research Report 348 Ornamentals Or.Al-A2. Size and Regional Profile Table Or.Al . Size and Regional Profile - Number of Farms and Average Ornamental Acres per Farm by Region and Crop Mean Standard Observations (n) Distribution Ornamental Acres Deviation By Region Far North 33 4% 93 290 North Coast 85 9% 4 7 Central Coast - North 151 16% 14 60 Central Coast - South 101 11% 36 139 South Coast 319 34% 15 64 Sacramento Valley 51 5% 20 57 San Joaquin - North 31 3% 142 369 San Joaquin - Central 23 2% 9 14 San Joaquin - South 26 3% 86 209 Sierra Nevada 64 7% 10 16 Desert 52 6% 26 67 By Crop Floriculture 226 24% 14 38 Nursery 624 67% 30 141 Christmas Trees 86 9% 18 25 126 A Statistical Profile of Horticultural Crop Farm Industries in California Table Or.A2. Size and Regional Profile - Distribution of Farms by Region/Crop and by Ornamental Acreage Floriculture Nursery Christmas Trees Obs. (n) Dist. Obs. (n) Dist. Obs. (n) Dist. By Region Far North 0 J 10 2 l 3% 6 7% North Coast 12 5% 61 10% 12 14% Central Coast - North 59 26% 78 13% 14 16% Central Coast - South 32 14% 67 11% - - South Coast 82 36% 229 37% 8 9% Sacramento Valley 10 4% JU 6% 5 6% San Joaquin - North 5 2% 24 4% San Joaquin - Central 20 3% _ — San Joaquin - South 3 1% 19 3% 4 5% Sierra Nevada 9 4% 26 4% 29 34% Desert 7 3% 4 3 7% - - Cumul. Cumul. Obs. (n) Dist. Percent Obs. (n) Dist. Percent uvs. {nj LJlbl. By Acreage Class (Acres of Ornamentals) 0-1 53 24% 24% 213 35% 35% 1-5 90 41% 64% 204 33% 68% 17 20% 5-10 28 13% 77% 60 10% 78% 35 41% 10-25 26 12% 89% 55 9% 87% 17 20% 25-50 12 5% 94% }] 5% 92% 10 12% 50-100 8 4% 98% 20 3% 95% 5 6% 100 and Greater 5 2% 100% 32 5% 100% Total 222 100% 615 100% 86 100% Note: Cells wiih less than three observations are indicated by "-' Giannini Foundation Research Report 348 Or.Bl. Crop Diversification Table Or.Bl . Crop Diversification - Crop Diversification Patterns and Number of Organic Farms by Crop Crop Diversification Patterns Observations (n) Percent Floriculture Only Nursery Only Christmas Trees Only Floriculture/Nursery Nursery/Christmas Trees 194 573 74 1 1 23% 67% 9% 1% Number of Organic Farms Total Floriculture Nursery Christmas Trees Observations (n) Number of Organic Farms Percent Organic 936 226 624 86 48 L5 25 5% 7% 4% 9% A Statistical Profile of Horticultural Crop Farm Industries in California Or.Cl. Marketing Table Or.Cl . Marketing - Number of Farms by Use (Processing versus Fresh) and Operation (Grower/Shipper versus Grower Only) r Number of Farms by Use Observations ( n) /werage volume snare (Percent) Designated Processing 12 50.0% Fresh 910 99.9% Distribution of Grower/Shippers Total Nnmhpr versus Growers Only of Farms Grower/Shippers Growers Only All Ornamentals Observations (n) 871 99 772 Row Percent 11% 89% Floriculture Observations (n) 214 24 190 Row Percent 11% 89% Nursery Observations (n) 578 75 503 Row Percent 13% 87% Christmas Trees Observations (n) 79 0 79 Row Percent 0% 100% Average Output Share Sold by Grower/Shippers at Predetermined Price There were only two grower/shippers who sold crops at predetermined prices. Marketing channel information was very scanty and could not be presented. 129 Giannini Foundation Research Report 348 Or.Dl-D2. Yield, Price, and Profit Fluctuations Table Or.DI . Yield, Price, and Profit Fluctuation - Largest Yield, Price, and Profit Fluctuations for Last Years: Number of Farms per Fluctuation Range by Crop Yield Price Profit Fluctuation Ranee (Percent) No. of Obs. Percent of Farms No. of Obs. Percent of Farms No. of Obs. Percent of Farms All Ornamental Crops 0-9 351 51% 407 60% 328 49% 10-24 171 25% 159 24% 187 28% 25-49 70 11% 64 10% 96 14% 50-74 48 7% 26 4% 39 6% 75 or More 43 6% 18 3% 21 3% Total 692 100% 674 100% 671 100% Floriculture 0-9 77 45% 83 51% 58 37% 10-24 43 25% 41 25% 42 27% 25-49 26 15% 24 15% 34 22% 50-74 14 8% 12 7% 1 5 9% 75 or More 10 6% 3 2% 9 6% Total 170 25% 163 24% 158 24% Nursery 0-9 246 53% 289 63% 240 53% 10-24 114 25% 104 23% 130 28% 25-49 42 9% 36 8% 5^ 12% 50-74 33 7% 14 3% 23 5% 75 or More 27 6% 14 3% 11 2% Total 462 67% 457 68% 457 68% Christmas Trees 0-9 28 47% 35 65% 30 54% 10-24 14 23% 14 26% 15 27% 25-49 1 1 18% 4 7% 9 16% 50-74 1 2% 0 0% 1 2% 75 or More 6 10% 1 2% 1 2% Total 60 9% 54 8% 56 8% 130 A Statistical Profile of Horticultural Crop Farm Industries in California Table Or.D2. Yield, Price, and Profit Fluctuations - Main Cause for Lowest Profit by Region and Crop Main Cause for Lowest Profit (Percent of Farmers Wh o Answered) Total No. Low Low Inability Obs. that Market Price Market Price to Market Answered High due to High due to a Crop Main Poor Poor Input Domestic Increased due to Cause Yield Quality Cost Prod'n Imports Quarantine Other All Ornamental Crops Observations (n) 823 101 46 156 121 121 5 273 Row Percent 12% 6% 19% 15% 15% 1% 33% By Region Far North 2M 21% 11% 14% 18% 4% 0% 32% North Coast 75 17% 5% 23% 8% 5% 0% 41% Central Coast - North 134 10% 1% 17% 13% 34% 0% 25% Central Coast - South 90 18% 9% 20% 17% 17% 0% 20% South Coast 283 8% 7% 20% 20% 15% 2% 27% Sacramento Valley 45 7% 0% 22% 4% 4% 0% 62% San Joaquin - North 28 14% 11% 11% 18% 7% 0% 39% San Joaquin - Central 22 14% 5% 23% 14% 9% 0% 36% San Joaquin - South 21 19% 14% 29% 0% 10% 0% 29% Sierra Nevada 56 18% 2% 11% 9% 4% 0% 57% Desert 41 15% 5% 15% 12% 5% 0% 49% By Crop Floriculture 209 11% 6% 13% 15% 37% 0% 18% Nursery 541 12% 5% 22% 15% 7% 1% 38% Christmas Trees 73 21% 8% 12% 10% 4% 0% 45% 131 Giannini Foundation Research Report 348 Or.El-E5. Risk Management Table Or.El . Risk Management - Ranking of Risk Sources (in Order of Importance): Mean Ranking by Crop and Distribution of Ranks by Risk Source Mean Ranking of Risk Sources Adverse Temper- ature Floods Drought Disease Irrig. Water Supply Problems Input Price Fluctu- ation Output Price Fluctu- ation Pests Quar- antine Hail All Ornamental Crops Mean Ranking 2.2 6.7 4.1 3.2 4.3 3.5 3.0 3.1 7.2 6.8 Observations that Provided Ranks 658 273 347 481 362 464 519 550 264 296 By Crop Floriculture Mean Rank 2.2 6.5 4.7 3.1 4.3 3.1 2.3 3.0 7.8 6.4 Obs. (n) 161 62 79 112 84 114 150 116 51 67 Nursery Mean Rank 2.0 7.0 4.7 3.6 4.3 3.3 3.0 3.4 6.5 6.7 Obs. (n) 439 184 224 320 243 312 336 381 191 207 Christmas Trees Mean Rank 2.4 6.8 3.1 2.8 4.4 4.1 3.8 3.1 7.2 7.1 Obs. (n) 58 27 44 40 35 38 33 53 22 22 Rank Distribution Rank n = 658 273 347 481 362 464 519 550 264 296 1 56% 4% 12% 14% 17% 22% 36% 17% 3% 5% 2 18% 10% 18% 24% 13% 24% 22% 24% 6% 8% 3 11% 4% 12% 22% 14% 15% 13% 22% 5% 8% 4 6% 7% 10% 15% 12% 14% 9% 15% 8% 6% 5 5% 7% 13% 9% 12% 8% 6% 12% 8% 6% 6 2% 8% 9% 7% 12% 6% 5% 4% 9% 6% 7 and Greater 3% 61% 26% 8% 20% 11% 10% 7% 61% 60% Total 100% 100% 100% 100% 100% 100% 101% 100% 100% 100% 132 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Or.E2. Risk Management - Ranking of Selected Risk Sources That May Be Specific to Region: Mean Ranking by Region Mean Ranking of Risk Sources Irrigation Water Region Drought Supply Problems Hail Far North Mean Rank 5.1 3.9 6.9 Observations (n) 12 13 1 1 North Coast Mean Rank 3.7 4.0 6.6 Observations (n) 36 42 JO Central Coast - North Mean Rank 4.7 4.2 6.6 Observations (n) 52 50 47 Central Coast - South Mean Rank 5.0 5.1 8.0 Observations (n) 39 43 36 South Coast Mean Rank 4.1 4.0 6.4 Observations (n) 111 114 92 Sacramento Valley Mean Rank 4.8 5.1 6.0 Observations (n) 21 20 23 San Joaquin - North Mean Rank 6.7 4.4 7.6 Observations (n) 8 1 1 8 San Joaquin - Central Mean Rank 4.7 4.9 4.2 Observations (n) 8 11 10 San Joaquin - South Mean Rank 5.7 6.0 7.8 Observations (n) 100 1 1 8 Sierra Nevada Mean Rank 3.8 3.8 5.8 Observations (n) 37 35 23 Desert Mean Rank 5.0 3.9 9.2 Observations (n) 13 L2 8 133 Giannini Foundation Research Report 348 Table Or.E3. Risk Management - Preference for Risk Management Tools: Mean Ranking by Region and Crop Mean Ranking of Risk Management Tools Hedging Multiple Govern- with Forward Crop Different Com- ment Futures or Con- Diversified Insurance Regions modities Programs Options trading Marketing Other All Ornamental Crops Mean Ranking 3.4 3.7 2.1 4.7 6.0 3.8 2.4 2.1 Observations (n) 332 237 406 230 159 225 393 215 By Region Far North Mean Rank Observations (n) North Coast Mean Rank Observations (n) Central Coast - North Mean Rank Observations (n) Central Coast - South Mean Rank Observations (n) South Coast Mean Rank Observations (n) Sacramento Valley Mean Rank Observations (n) San Joaquin - North Mean Rank Observations (n) San Joaquin - Central Mean Rank Observations (n) San Joaquin - South Mean Rank Observations (n) 4.3 9 2.9 50 3.1 66 2.8 39 3.6 95 4.2 15 16 2.8 16 3.1 9 3.5 11 4.1 18 4.5 37 2.8 33 3.2 73 4.6 L6 4.3 4.3 2.4 14 2.1 3ft 2.1 72 59 1.9 126 1.8 23 2.3 1 1 2.3 1 1 2.2 9 4.2 12 5.6 17 4.0 4 3 5.0 23 4.7 72 4.8 1ft 5.6 9 5.6 9 5.3 3 6.3 7 6.7 13 6.2 28 5.8 17 5.9 45 5.8 1 1 5.6 8 5.6 8 4.5 2 3.4 11 3.8 17 4.0 43 3.9 27 ft4 4.5 1 1 3.2 9 3.2 9 3.3 4 2.3 16 2.6 39 2.7 73 2.7 44 2.2 119 2.5 22 2.3 12 2.3 12 2.0 9 1.2 10 2.1 17 2.6 39 3.0 21 1.9 7ft 1.5 17 4.0 6 4.0 6 2.2 ft continued on following page 134 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Or.E3. Continued Mean Ranking of Risk Management Tools Hedging Multiple Govern- with Forward Crop Insurance Different Regions Com- modities ment Programs Futures or Options Con- tracting Diversified Marketing Other By Region (continued) Sierra Nevada Mean Rank 3.4 4.8 3.1 4.8 6.8 3.5 3.4 7.0 Observations (n) 17 1 1 14 1 1 10 13 15 2 Desert Mean Rank 3.0 3.8 2.8 4.9 5.6 3.4 2.0 1.3 Observations (n) 17 10 18 11 7 1 1 19 8 By Crop Floriculture Mean Rank 3.1 3.4 1.8 4.2 5.9 4.0 2.4 2.2 Observations (n) 85 62 113 63 38 53 100 49 Nursery Mean Rank 3.4 3.6 2.1 4.9 6.0 3.6 2.4 2.1 Observations (n) 225 162 268 152 109 159 267 143 Christmas Trees Mean Rank 4.2 5.9 2.4 5.0 6.7 5.9 2.6 2.3 Observations (n) 22 13 25 15 12 13 26 23 135 Giannini Foundation Research Report 348 Table Or.E4. Risk Management - Availability and Utilization of Risk Management Tools: Rates of Availability and Utilization and Mean Ranking of Preference by Crop Mean Ranking of Risk Management Tools Crop Different Insurance Regions Multiple Com- modities Govern- ment Programs Hedging with Futures or Options Forward Con- tracting Diversified Marketing Other All Ornamental Crops (Total Observations = 936) Obs. with Availability 164 107 260 42 21 83 242 35 Availability Rate" 18% 1 1 % 28% 4% 2% 9% 26% 4% Utilization Rate b 37% 45% 78% 36% 19% 66% 73% 74% Mean Ranking 3.0 3.0 1.6 3.9 4.9 2.8 2.1 2.1 By Crop Floriculture (Total Observations = 226) Obs. with Availability 33 31 83 8 4 19 67 7 Availability Rate 15% 14% 37% 4% 2% 8% 30% 3% Nursery (Total Observations = 624) Obs. with Availability 122 70 165 31 16 64 160 26 Availability Rate 6 7 % 1 1 % 26% 5% 3% 10% 26% 4% Christmas Trees (Total Observations = 86) Obs. with Availability 9 6 12 3 1 0 15 2 Availability Rate 10% 7% 14% 3% 1% 0% 17% 2% a Availability rates were calculated as a ratio of the number of observations with availability to the total number of observations. Utilization rates were calculated based on the number of observations with availability Utilization rates by crop are not provided due to too few number of observations that utilized the tool. 136 A Statistical Profile oj Horticultural Crop Farm Industries in California Table Or.E5. Risk Management - Status of Receipt of Government Disaster Payments or Loans by Crop Receipt of Government Disaster Payments or Loans Total Observations Received Not Qualified Unaware All Ornamental Crops Observations (n) 839 58 405 376 Row Percent 7% 48% 45% By Crop Floriculture Observations (n) 205 19 106 80 Row Percent 9% 52% 39% Nursery Observations (n) 560 36 273 251 Row Percent 6% 49% 45% Christmas Trees Observations (n) 74 3 26 45 Row Percent 4% 35% 61% 137 Giannini Foundation Research Report 348 Or.Fl-F6. Crop Insurance Table Or.Fl . Crop Insurance (Any) Purchase - Purchase History and Average Number of Purchases for the Last Five Years by Crop Purchased Crop Insurance in Last Five Years No. of Years Purchased Observations Distribution Yes Observations Distribution No 123 13% Observations 797 Distribution 87% 1 2 3 4 5 16 12 25 10 58 13% 10% 21% 8% 48% Mean Number of Purchases by Crop for the Last Five Years by Vegetable Category Observations Average Years Floriculture L9 3.8 Nursery 99 3.6 Christmas Trees 3 4.3 138 A Statistical Profile of Horticultural Crop Farm Industries in California Table Or.F2. Crop Insurance - Number of Farmers Who Purchase Single-Peril Insurance against a Specific Peril by Crop Peril Total Number of Farmers Fire Frost or Freeze Rain Hail All Ornamental Crops Observations (n) Percent 936 39 4% 29 3% 26 3% 24 3% By Crop Floriculture Observations (n) Percent 226 9 4% 3 1% 4 2% 4 2% Nursery Observations (n) Percent 624 29 5% 26 4% 11 4% 20 3% Christmas Trees Observations (n) Percent 86 0 0% 0 0% Q 0% Table Or.F3. Crop Insurance - Mean Ranking and Distribution of Reasons for Purchasing Crop Insurance Risk of Crop Loss Was High Expected Water Supplies to Be Cut Back Insurance Req'd to Qualify for Other USDA Programs Expected to Receive Lower Prices for Crops Bank or Other Lender Required Insurance Other All Ornamental Crops* Mean Ranking 1.5 3.0 3.0 2.7 2.7 1.2 No. of Observations that Provided Ranks 7 3 27 25 31 32 80 Due to too few observations, we do not provide the means for a further disaggregated level. 139 Giannini Foundation Research Report 348 Table Or.F4. Crop Insurance - Mean Ranking of Reasons for Not Purchasing Crop Insurance by Crop Major Never Lost Couldn't Source of Too Enough Find Do Not Not Risk Not Much Prod'n or Premium Know- Understand Available Insured Paper- Revenue Cost ledgable Crop for My Cause work to File Too Insurance Insurance Crop of Loss to Apply Claim High Agent Program Other All Ornamental Crops Mean Rank 1.9 2.7 3.3 1.9 2.3 3.5 2.8 1.6 Total obs. (n) 366 187 164 297 268 147 264 182 By Crop Floriculture Mean Rank 1.7 2.7 3.1 2 : 1 2.0 3.3 2.6 1.7 Obs. (n) 101 38 42 64 64 37 75 39 Nursery Mean Rank 2.0 2.8 3.3 1.9 2.4 3.5 2.8 1.6 Obs. (n) 224 132 111 215 181 99 166 130 Christmas Trees Mean Rank 1.7 2.1 4.0 2.1 2.7 4.4 3.3 1.0 Obs. (n) 41 17 11 18 23 11 23 13 140 A Statistical Profile of Horticultural Crop Farm Industries in California Table Or.F5. Crop Insurance - Mean Ranking of Suggestions to Modify Crop Insurance by Crop Compensate for a Compensate Compen- Guaran- Guarantee Higher for a sate Guaran- tee Costs of Replace- Level of Loss of for a tee Cash Establishing ment Costs Production Gross Loss of Production Orchard or of a Crop Loss Sales Profit Costs Vineyard Inventory Other All Ornamental Crops Mean Ranking 2.7 2.3 2.5 3.0 3.8 2.3 1.2 Obs. (n)that 213 228 210 204 148 261 307 Provided Ranks By Crop Floriculture Mean Rank 2.7 2.2 Obs. (n) 56 64 Nursery Mean Rank 2.5 2.3 Obs. (n) 142 144 Christmas Trees Mean Rank 4.4 2.5 Obs. (n) 15 20 2.5 2.9 3.8 2.7 1.2 57 56 36 60 83 2.5 3.1 4.1 2.2 1.2 136 130 93 181 200 3.2 3.0 2.8 2.8 1.3 17 18 19 20 24 Table Or.F6. Crop Insurance - Importance of Risk Management and Familiarity with Crop Insurance Compared with Five Years Ago Risk Management Is Becoming More Familiar Becoming More Important with Crop Insurance Response Obs. (n) Percent of Farms Obs. (n) Percent of Farms All Ornamental Crops Yes 314 37% 244 29% No 536 63% 609 71% By Crop Floriculture Yes 81 39% 48 23% No 127 61% 162 77% Nursery Yes 213 37% 186 33% No 357 63% 384 67% Christmas Trees Yes 20 28% 10 14% No 52 72% 63 86% 141 Giannini Foundation Research Report 348 Or.Gl-G3. Financial Characteristics Table Or.Gl . Financial Characteristics - Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts: Mean Values by Region and Crop Gross Off-Farm Agricultural Income Share Sales Assets Debts Obs. Mean Obs. Mean Obs. Mean Obs. Mean (n) (%) (n) ($) (n) ($) (n) ($) All Ornamental Crops 530 61% 815 $814,287 512 $1,574,914 529 $394,742 By Region Far North 21 66% 28 $2,070,078 17 $2,882,587 17 $204,269 North Coast 55 61% 68 $219,222 39 $422,661 41 $42,740 Central Coast - North 75 48% 135 $778,141 84 $1,240,994 85 $290,453 Central Coast - South 47 54% 87 $1,787,237 54 $3,632,727 55 $1,109,930 South Coast 181 63% 284 $661,278 167 $1,124,109 176 $277,226 Sacramento Valley 33 72% 43 $416,638 26 $382,143 26 $39,584 San Joaquin - North 14 51% 26 $1,933,373 19 $7,546,150 20 $1,180,731 San Joaquin - Central 12 63% 21 $545,467 14 $620,116 14 $60,830 San Joaquin - South 15 59% 24 $1,260,646 18 $3,017,235 18 $2,044,263 Sierra Nevada 51 74% 57 $105,811 45 $347,893 40 $87,641 Desert 26 64% 42 $631,146 29 $716,276 31 $88,500 By Crop Floriculture 133 64% 209 $646,808 120 $1,406,897 126 $316,624 Nursery 325 58% 528 $995,038 337 $1,798,894 348 $480,546 Christmas Trees 72 71% 78 $39,500 55 $569,115 55 $30,796 142 A Statistical Profile of Horticultural Crop Farm Industries in California Table Or.G2. Financial Characteristics - Distribution of Off-Farm Income Shares and Gross Agricultural Sales Observations (n) Distribution (Percent) Cumulative Percent Range of Off-Farm Income Shares 1-10% 62 12% 14% 11-20% 35 7% Zl 70 21-30% }0 6% 27% 31-40% 22 4% 31% 41-50% 67 13% 43% 51-60% 19 4% 47% 61-70% 20 4% 51% 71-80% 70 13% 64% 81-90% 60 11% 75% 91-100% 133 25% 100% Range of Gross Agricultural Sales (in $1,000) 0-10 166 20% 20% 10-50 178 22% 42% 50-100 113 14% 56% 100-500 188 23% 79% 500-1,000 59 7% 86% 1,000-2,000 48 6% 92% 2,000-5,000 36 4% 97% 5,000 and Greater 27 3% 100% 143 Giannini Foundation Research Report 348 Table Or.G3. Financial Characteristics - Mean Agricultural Sales, Mean Assets, and Mean Debts by Off-Farm Income Share Class and Ornamental Acreage Class Gross Agricultural Sales Assets Debts Obs. Mean Obs. Mean Obs. Mean (n) ($) (n) ($) (n) ($) By Off-Farm Income Share 0% 12 $2,156,061 6 $9,131,871 7 $5,209,203 1-10% 57 $1,738,435 43 $3,240,704 44 $957,232 11-20% 34 $868,814 22 $1,078,161 23 $259,062 21-30% 30 $490,219 20 $698,502 21 $87,037 31-40% 21 $570,741 15 $1,173,460 15 $207,000 41-50% 64 $1,036,283 44 $1,874,909 46 $218,087 51-60% 18 $172,617 15 $741,200 15 $93,533 61-70% 20 $67,499 16 $331,563 16 $15,000 71-80% 70 $104,425 47 $492,085 48 $48,658 81-90% 55 $30,892 32 $424,545 34 $75,015 91-100% 118 $137,384 77 $557,688 77 $98,000 By Acreage Class (Acres in Ornamentals) 0-10 220 $45,917 138 $245,089 146 $24,928 11-20 276 $223,414 173 $619,154 181 $94,627 21-30 113 $370,110 67 $916,362 68 $97,242 31-40 82 $1,104,444 56 $1,476,823 58 $431,466 41-50 47 $2,091,670 29 $2,696,724 29 $853,552 51-60 31 $2,891,679 18 $2,084,061 18 $596,507 61-70 34 $7,734,728 24 $16,079,326 24 $4,860,786 144 A Statistical Profile of Horticultural Crop Farm Industries in California Aquaculture Table Aq. 1 . Profile and Marketing - Regional Distribution, Years of Farming, Organic Farms, Number of Farms by Use (Processing versus Fresh), and Marketing Channels Regional Distribution Observations (n) Distribution Far North + North Coast + Sierra Nevada 9 22% Central Coast North + Sacramento Valley 9 22% San Joaquin Valley (North + Central + South) 15 37% South Coast + Desert 8 20% Years of Farming Observations (n) Mean Average Years of Farming 40 18.4 Number of Farms by Use Observations (n) Mean Processing 0 - Fresh 4L 100 Marketing Channels Observations (n) Average Volume Share Direct to Consumers 6 64% Marketing Cooperative Independent Shipper/Broker 6 85% Direct to Commercial Buyers 15 90% Other 5 62% Table Aq.2. Largest Yield, Price, and Profit Fluctuations: Number of Farms by Fluctuation Range Yield Price Profit Fluctuation No. of Percent No. of Percent No. of Percent Range (Percent) Obs. of Farms Obs. of Farms Obs. of Farms 0-9 11 48% 10 45% 6 30% 10-24 5 22% 8 36% 7 35% 25-49 3 14% 3 15% 50-74 4 17% 75 or More Total 20 21 16 145 Giannini Foundation Research Report 348 Table Aq.3. Risk Management and Crop Insurance - Risk Sources, Risk Management Tools, Government Disaster Payments and Loans, Reasons for Not Purchasing Crop Insurance, and Suggestions to Modify Crop Insurance Rate of Observations (n) Mean Ranking Availability Risk Sources Adverse Temperature 22 2.7 Floods 12 5.1 Drought 15 4.7 Disease 21 2.3 Irrigation Water Supply Problems 15 4.0 Input Price Fluctuation 13 3.3 Output Price Fluctuation 16 3.3 Pests 20 2.6 Quarantine 10 6.8 Hail 9 8.7 Risk Management Tools Crop Insurance 16 3.0 15% Locating Production in Different Regions 12 3.3 15% Diversification into Multiple Commodities 1 3 2.5 17% Government Programs 12 5.4 <5% Hedging with Futures or Options 9 5.7 < 5% Forward Contracting 1 1 4.5 < 5% Diversified Marketing 1 3 2.9 < 5% Other 15 2.5 < 5% Government Disaster Payments or Loans Received 5 14% Not Qualified 12 34% Unaware 18 51% Reasons for Not Purchasing Crop Insurance Not Available for My Crop 17 1.3 Major Source of Risk Not an Insured Cause of Loss 8 2.1 Too Much Paperwork to Apply 5 4.8 Never Lost Enough Production or Revenue to File Claim 6 3.8 Premium Cost Too High I 1 2.0 Could Not Find Knowledgeable Insurance Agent 7 3.6 Do Not Understand Crop Insurance Program 11 3.3 Other 7 2.0 continued on following page 146 A Statistical Profile of Horticultural Crop Farm Industries in California Table Aq.3. Continued Observations (n) Mean Ranking Rate of Availability Ranking of Suggestions to Modify Crop Insurance Compensate for a Higher Level of Production Loss 11 2.9 Compensate for a Loss of Gross Sales 10 2.3 Compensate for a Loss of Profit 9 2.0 Guarantee Cash Production Costs 6 3.0 Guarantee Costs of Establishing an Orchard or Vineyard 2 7.0 Guarantee Replacement Costs of a Crop Inventory 11 1.6 Other 17 1.6 Table Aq.4. Financial Characteristics - Off-Farm Income Share (Percent), Gross Agricultural Sales, Assets, and Debts Observations (n) Mean Standard Deviation Median By Region Off-Farm Income Share 25 Gross Sales of Agricultural Products ($) 32 Assets ($) 23 Debts ($) 23 56% $776,274 $5,357,832 $139,087 40 $1,778,045 $20,687,389 $218,406 48% $300,000 147 Giannini Foundation Research Report 348 148 A Statistical Profile oj Horticultural Crop Farm Industries in California APPENDIX 3 Survey Questionnaire Risk Management Survey of Specialty Crop Producers ombno. o^oosq^ California - 2001 Crop Year How many acres are in your current farming operation? In what county was the largest value of your agricultural products produced? How many years have you been farming/ranching? (whole number) Acres County 4. Please list MAJOR crops grown, acreage, and the approximate percentage of the total gross sales of each individual crop produced in 2001 . (For nursery and greenhouse crops, please indicate if area is in square footage.) Crop Acreage Percent of Total Sales 005 006 007 % 008 009 010 % 011 012 013 % 014 015 016 % 017 018 019 % n?n 021 022 % 5. Did you produce any specialty crops as organic or transitional organic in 2001? □ YES - continue NO * go to Question 6 a. Please list the MAJOR organic or transitional organic crops grown in 2001 . OFFICE USE Crop Total Crop Acres Organic Acres Transitional Acres 024 025 026 027 028 029 030 031 032 033 034 035 036 037 038 039 040 041 042 043 044 045 046 047 ' * * INSTRUCTIONS: * * * Questions 6-11 concern your primary specialty crop. (The primary specialty crop is defined as the one with the highest percentage of sales.) What is your primary specialty crop? \_04a a. How much of your primary specialty crop is used for: Processing Fresh Market (include ornamentals) What percentage of your primary processed specialty crop is marketed through the following outlets? Marketing cooperative Sold to a processor under contract with a predetermined price Sold to a processor under contract without a predetermined price Spot market Participation Plan Other (specify): 049 % 050 % 100% (If none, write zero.) 051 % 052 % 053 % 054 % 065 % 056 % 100% 149 Giannini Foundation Research Report 348 7. If you produce for fresh market, are you a grower-shipper or a grower only? 1—1 Grower-Shipper - complete 7a, then go to Question 9 D Grower only - go to Question 8 a. What percentage of your volume is sold with a predetermined price (negotiated with retail or food service buyers)? 8. If you are a grower only and produce for the fresh market, what percentage of your volume is delivered to the following marketing channels? a. Directly to consumers (farmers markets, roadside stands, U-pick) b. Marketing cooperative c. Independent shipper/broker d. Directly to commercial buyers (wholesalers, retailers, restaurants) e. Other (specify): 9. What was your actual yield per acre for your primary specialty crop for each Of the last five years? (Please answer in whole numbers. If you do not remember exactly, provide approximate numbers ) Nursery/Greenhouses, please skip to question 10. Year Actual Yield Per Acre Unit Unit Weight in Pounds 2001 064 065 066 2000 067 068 069 1999 070 071 072 1998 073 074 075 1997 076 077 078 10. For your primary specialty crop over the last five years, please indicate the largest fluctuation from your five-year average. Item Check (S) only 1 percentage range for each item. Less than 10% 10-24% 25-49% 50-74% 75-100% a. Annual yield per acre 079 080 081 082 083 b. Annual average price 084 085 086 087 088 c. Profit (after deducting production and marketing expenses from revenue) . . 089 090 091 092 093 What was the main cause of your lowest profit from your primary specialty crop over the last five years? a. Poor yield per acre (Please check (/) only 1 box.) 094 b. Poor quality 095 c. High input costs 096 d. Low market price due to high domestic production 097 e. Low market price due to increased imports .... 098 f. Inability to market a crop due to quarantine 099 g. Other (specify): 100 OFFICE USE 057 058 % 059 % 060 % 061 % 062 % 063 % 100% 150 A Statistical Profile of Horticultural Crop Farm Industries in California REMAINDER OF THE QUESTIONS REFER TO YOUR ENTIRE FARM OPERATION * * ' 12. Please rank the following sources of risk in terms of their effect on your net farm income. a. Adverse temperature (heat, frost, etc.) b. Floods c. Drought d. Disease Irrigation water supply problems Input price fluctuation Output price fluctuation (low price/no market) Pests (insects, wildlife, etc.) Quarantine Hail (Rank according to 1-most effect, 2-next in degree of effect, etc.) 13. Please rank the risk management tools in the order of your preference. Preference Rank Available Used (Rank according to: 1=most preferred. 8=least oreferred) (Please check (S) all that apply.) 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 Risk Management Tools a. Crop insurance b. Locating production in different regions . c. Diversification into multiple commodities d. Government programs e. Hedging with futures or options f. Forward contracting g. Diversified marketing h. Other (specify): 14. Have you ever received government disaster payments or loans? a. Yes b. No, I wasn't qualified c. No, I am not aware of such programs 1 5. Have you purchased any crop insurance within the past five years? D YES - continue I— I NO - go to Question 18 a. How many of the last five years? Years 16. Have you purchased any private crop insurance for damage from: a. Fire b. Frost or freeze c. Rain d. Hail e. Other causes (specify): f. None (Please check (S) only 1 box ) 151 OFFICE USE (Please check (/) all that apply.) 155 157 131 Giannini Foundation Research Report 348 17. Please rank the reasons why you purchased crop insurance. (Rank according to Reasons 1=most important, 2=next most important etc ) Risk of crop loss was high Expected water supplies to be cut back Insurance was required to qualify for other USDA programs Expected to receive lower prices for my crops Bank or other lender required insurance Other (specify): 161 162 163 164 165 166 18. In the most recent year that you did not purchase crop insurance, please rank the reasons for not participating in a crop insurance program? a. Not available for my crop b. Major source of risk is not an insured cause of loss c. Too much paperwork to apply d. Have never lost enough production or revenue to file a claim e. Premium cost is too high f. Could not find a knowledgeable insurance agent g. Do not understand the crop insurance program h. Other (specify): 19 How could the crop insurance program better serve your needs? a. Compensate for a higher level of production loss (more than 75%) b. Compensate for a loss of gross sales c. Compensate for a loss of profit d. Guarantee cash production costs e. Guarantee costs of establishing an orchard or vineyard f. Guarantee replacement costs of a crop inventory g. Other (specify): 20 - Has risk management become more important to your business in the last five years? 21 . Are you more familiar with crop insurance than you were five years ago? 22. How many risk management education meetings or seminars have you attended over the last five years? Number 23. What percentage of your household's total income in 2001 was from non-farm activities? Percent 24. What was your total GROSS sales of all agricultural commodities in 2001? Dollars 25. What is the approximate current value of your operation's: a. Assets Dollars b. Debts Dollars Reported by: Phone: Date: According to the Paperwork Reduction Act of 1 995, no persons are required to respond to a collection of information unless it displays a valid OMB control number The time required to complete this information collection is estimated to average 35 minutes per response (Rank according to: Inmost important, 2=next most important, etc ) 167 (Rank according to: 1=most important, 2=next most important, etc.) 178 YES NO 184 185 186 187 OFFICE USE 152 The University of California prohibits discrimination or harassment of any person on the basis of race, color, national origin, religion, sex, gender identity, pregnancy (including childbirth and medical conditions related to pregnancy or childbirth), physical or mental disability, medical condition (cancer-related or genetic characteristics), ancestry, marital status, age,' sexual orientation, citizenship, or status as a covered veteran (covered veterans are special disabled veterans, recently separated veterans, Vietnam era veterans, or any other veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized) in any of its programs or activities. University policy is intended to be consistent with the provisions of applicable state and federal laws. Inquiries regarding the University's nondiscrimination policies may be directed to the Affirmative Action/Staff Personnel Services Director, University of California, Agriculture and Natural Resources, 300 Lakeside Drive, 6th Floor, Oakland, CA 94612-3550, (510) 987-0096. Giannini Foundation Research Report 348 GIANNINI FOUNDATION RESEARCH REPORTS The Giannini Foundation Research Report Series (ISSN 0899-3068) is designed to communicate research to specific professional audiences interested in applications. The first Research Report was issued in 1961 as No. 246, continuing the numbering of the Giannini Foundation Mimeographed Report Series, which the Research Report replaced. The Giannini Foundation of Agricultural Economics was founded in 1930 from a grant made by the Bancitaly Corporation to the University of California in tribute to its organizer and past president, Amadeo Peter Giannini of San Francisco. The broad mission of the foundation is to promote and support research and outreach activities in agricultural economics and rural development relevant to California. In line with those goals, the foundation encourages research in various areas of interest to agricultural and resource economists and supports dissemination of research findings to other researchers and to the public. Foundation membership includes agricultural economists (faculty and Cooperative Extension specialists) at the Department of Agricultural and Resource Economics, Davis, and at the Department of Agricultural and Resource Economics, Berkeley. Associate members include forestry economists in the College of Natural Resources, Berkeley, and economists in the Department of Environmental Sciences at Riverside. This and other Giannini Foundation publications are available in PDF format online at http://giannini.ucop.edu/publications.htm. Hard copies of this report may be ordered from University of Cali- fornia Agriculture and Natural Resources Communication Services. University of California Agriculture and Natural Resources (ANR) Communication Services 6701 San Pablo Avenue, 2nd Floor Oakland, California 94608-1239 Telephone: 800.994.8849 / 510.642.2431 Fax: 510.643.5470 E-mail: danrcs@ucdavis.edu Visit the ANR Communication Services Web site at http://anrcatalog.ucdavis.edu Peter Berck Giannini Foundation Series Editor University of California, Berkeley Julian Alston Associate Editor University of California, Davis Julie McNamara Managing Editor University of California, Davis Angie Erickson Technical Editor University of California, Berkeley Natalie Karst Production Visit the Giannini Foundation Web site at http://giannini.ucop.edu