All Posts Tagged: agriculture

California Economic Outlook: Blowback

Scott Anderson
Chief Economist

The Golden State’s outlook is actually less than golden. The trade war between the U.S. and China has negative implications for California, which would have the fifth-largest economy in the world if it were a country. Around half of U.S. trade with China currently passes through Los Angeles area ports.

port-of-long-beach-cranes

Tough tariffs

Agricultural exports from the state’s Central Valley could suffer because they are on the list of goods subject to retaliatory tariffs by China.

Indeed, a study from the University of California, Davis, estimates that higher tariffs may cost major U.S. fruit and nut industries $2.6 billion per year in exports to countries imposing higher tariffs, including China. In addition, Bay Area tech companies are also in the crosshairs. For example, higher tariffs mean higher component costs. That could ultimately push prices of devices higher and reduce demand.

Sputtering jobs engine

California’s job growth engine is not dead yet, but it is sputtering. Job growth year-on-year slipped below the national rate in December 2018, after exceeding U.S. growth for nearly seven years. Annual job growth in California has moderated for three consecutive years, and the slowdown is projected to continue through 2020.

For more insights, see highlights of my report below, followed by a link to the California Economic Outlook.

Key observations:
  • California’s unemployment rate rose to 4.3% in April 2019 from an all-time low of 4.1% in July 2018. It is expected to average 4.9% by 2020, the highest since 2016.
  • Job growth is forecast to moderate across all regions in 2019 and 2020 except for the Central Coast where some acceleration is expected in 2019. The slowest job growth is forecast in Southern California over both years.
  • California’s home price increases will moderate to more sustainable rates of around 2.0% over the next two years due to decelerating job growth, slowing economic activity, continued out-migration, and weak population growth.

Read my full report.

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Investment Insights: Don’t cry over spilt milk

Wade Balliet
Posted by Wade Balliet
Investment Strategy
Dairy farm in Canada, with field of cows in the foreground on a cloudy day.

While dairy was one of the most contentious topics in U.S.-Canada trade talks, there were other changes in the trade agreement affecting all three nations.

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Future of farming: How new challenges are affecting agribusiness

Newsroom
Posted by Newsroom
Corporate News
Jeff Burch (center) in panel about climate change and agribusiness.

A major concern for farmers today is water shortages caused by major droughts in the West.

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California Economic Outlook – September 2018

Scott Anderson
Chief Economist
View of downtown Los Angeles, with semi-crowded freeway in the foreground on a sunny morning.

California’s job creation continues to outpace that of the United States as a whole, a trend that has been firmly in place since March of 2012.

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From drones to robots: How digital technology is revolutionizing the wine industry

Adam Beak
Posted by Adam Beak
Agribusiness Banking
Aerial view of vineyards in hilly terrain on a cloudy day.

Wine makers are increasingly looking toward disruptive technologies to make the industry more efficient and profitable.

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