West Coast Trade Context for May 2024

By Jock O’Connell

Competing Port Performance Indices

The latest Global Port Performance Rankings came out earlier this month, and once again U.S. ports did not fare well. The rankings are compiled by the World Bank and S&P Global Market Intelligence. For 2023, no North American port made the Top 10 list. Unhappily, three made the Bottom 10 list: Oakland, Tacoma, and Prince Rupert.

Washington State’s Drought

As if to remind the rest of the nation that there is a lot more to Washington State than rainy Seattle, word comes that irrigation water allotments to farmers in Yakima Valley are being cut back because last winter was relatively dry.

According to a June 4 report in the Seattle Times, “two-thirds of the state is either abnormally dry or suffering from a moderate drought”. In late May, the Roza Irrigation District — covering 72,000 acres in the Yakima River Basin, including some of the state’s most fertile ground — shut off its spigots in an attempt to conserve water for the dry months ahead. 

The drought will almost certainly have far-reaching consequences, especially for the state’s ports. The Washington State Department of Agriculture reports that, iIn 2023, the value of Washington-grown or processed food and agriculture exports amounted to $7.5 billion. Products that are especially reliant on global trade include wheat (up to 90% of the crop is exported each year), potatoes (up to 70% are exported in the form of French fries), and tree fruit (approximately 30% of apples and 25% of cherries are shipped abroad each year).

U.S. Commerce Department foreign trade statistics show that $12.699 in exports of Agricultural Products sailed from Washington State ports last year. That total includes shipments of soybeans, wheat, and grains produced elsewhere but shipped through the Ports of Tacoma and Seattle as well as the Ports of Kalama, Longview, and Vancouver on the Washington State side of the Columbia River.

Where did America’s export trade go?

We should periodically remind our younger readers that, once upon a time, the United States of America enjoyed surpluses in its foreign trade.  But that was a while back. If you were born in the year the nation’s merchandise trade ledger was in the black, congratulations, you will be turning 50 next year.

In recent years, with the notable exception of Port Houston, the volume of outbound loaded TEUs sailing from U.S. mainland ports has been declining. Exhibit 6 details the situation at the largest U.S. West Coast ports, while Exhibit 7 depicts the trend along the Atlantic Coast. Even the Port of Oakland, which used to regularly export more than it imported, hasn’t seen a year in which its outbound loads exceeded its traffic in inbound loads since 2017.

The growing export trade in polymers, a petrochemical industry byproduct, has made Port Houston the exception among major U.S. mainland ports.

Cornering the Global Strawberry Market

This is likely a little-known fact about the worldwide strawberry growing business. You may suspect that  California grows a lot of the strawberries consumed in the United States. According to the California Strawberry Commission, 90% of all commercially-produced strawberries grown in the United States indeed originate in a narrow band of counties along the state’s Central Coast.

What you more than likely don’t know is that the University of California at Davis holds active patents on 20 strawberry varieties (cultivars), all of which have been licensed to nurseries to seed plants to growers. Outside of North America, UC Davis contracts with master licensees like the Watsonville-based Fresa Forteleza or Britain’s Global Plant Genetics. The Davis-engineered plants produce roughly 60% of all strawberries consumed worldwide. International markets in which UC Davis strawberry varieties are grown include the European Union, the United Kingdom, Switzerland, Mexico, Peru, China, Australia, New Zealand, Turkey, and South Africa, Morocco, Israel, and Egypt.

Annually, the patents generate between $8 and $9 million in revenue for the Davis campus. Although few of California’s strawberry exports are conveyed abroad in shipping containers, there is a certain satisfaction in knowing that the fresh strawberry you were served on your last overseas trip was more than likely cultivated by plant geneticists at the University of California at Davis.