Noch einmal Holzzellstoff, Herr Ober.

By Jock O’Connell

The Port of Savannah has lately been trying to pass itself off as America’s foremost gateway for containerized agricultural exports. Back in June, Georgia Governor Brian Kemp even went so far as to boast to the American Journal of Transportation: “As this country’s No. 1 port for the export of agricultural products, Savannah provides vital support for the state and nation, helping our farmers reach overseas buyers efficiently.”

I deign to quibble, sedulously.

First off, it’s flat out wrong to think that containerized shipments represent a significant share of U.S. agricultural exports. In tonnage terms, for example, the two largest categories of U.S. agricultural exports are – not surprisingly – Cereals and Oil Seeds (Harmonized System classification codes 10 and 12, respectively). Last year, oceanborne exports of these two commodities totaled 116,861 million metric tons (mmt). Of that, just 10.9% (12,721 mmt) were shipped in containers. In neither category did Savannah figure as a prominent export conduit.

Secondly, Savannah’s boast has some validity only if you believe wood products ought to be considered as agricultural commodities. Technically, I guess we should. Trees do grow from the earth, like corn, wheat, and soybeans. And, in fact, timber and forest products are statutorily considered agricultural commodities under 7 U.S. Code §1518.

Still, I don’t believe Chemical Woodpulp (HS 4703), Savannah’s top export commodity by weight, is likely to turn up on the tasting menu when I’m dining abroad. (Personal experience does suggest, though, it could have been the main ingredient in a brand of cigarettes popular in Moscow in the mid-1970s.)

More to my point, Woodpulp (Holzzellstoff, in German) does not turn up in export reports from the U.S. Department of Agriculture (USDA), the federal government’s official bean counter when it comes to all things agricultural. Perhaps unfairly to Savannah, USDA seems to think mainly in terms of food and fiber for humans and livestock and such non-edibles as cotton and tobacco. Nothing the least bit woody, though.

None of this is to say that Savannah is not a major point of departure for overseas shipments of items widely recognizable as food. Last year, some 1,015 mmt of the 5,489 mmt of U.S. maritime exports of Meat and Edible Meat Offal (HS 02) sailed from the port, mostly (96.7%) in containers, making the Georgia port the nation’s leader in overseas shipments of this particular commodity…but only on a tonnage basis.

In terms of dollar value, overall U.S. seaborne exports of Meat and Edible Meat Offal last year were valued at $13.15 billion. Savannah’s share ($944.9 million) was just 7.2%. By contrast, the Port of Oakland held a 29.2% share, while the two San Pedro Bay ports accounted for another 28.1% of the trade. Indeed, in 2019, U.S. West Coast ports accounted for 61.9% of the value of U.S. HS 02 exports by sea. Which only goes to show that pork and beef are both more valuable than chicken parts.

If you’re serious about agricultural exports, you really have to talk about Cereals (corn, wheat, rice) and Oil Seeds (soybeans and forage crops) in 2019. At least those are the commodities on which trade negotiators and politicians counting on the farm vote lavish their attention. But Savannah doesn’t figure prominently as an exporter of either. Savannah’s share of America’s Cereal exports by sea (59,753 mmts) amounted to all of 0.3%. Its share of Oil Seed exports (55,717 mmts) was a more respectable, but still meager 4.6%.

The nation’s biggest exporter in the Cereal and Oil Seed trades has long been the Port of New Orleans, chiefly by virtue of being the export terminal for farm products barged down the Mississippi from sundry Midwestern states. Last year, New Orleans held a 29.3% share of U.S. exports of Cereals and 25.6% of Oil Seed exports. Of particular interest to West Coast readers, 26.0% of the Oil Seeds trade was funneled through ports in Washington State last year. Meanwhile, ports in Washington State (led by the Columbia River ports of Kalama, Vancouver, and Longview) and Oregon handled 35.2% of America’s Cereal export trade in 2019.

So, what about Oakland? Long regarded as an indispensable partner of California’s robust agricultural economy (by far the nation’s biggest), the Port of Oakland last year handled $18.15 billion in containerized exports. On a dollar value basis, the port’s leading export commodities were not high-tech products from nearby Silicon Valley. (Those principally depart by air from the Bay Area’s three international airports.) Nor were they Elon Musk’s Teslas manufactured in nearby Fremont. (They go out of the Port of San Francisco across the Bay.) Instead, Edible Fruits and Nuts accounted for 26.2% of Oakland’s exports, while Meat and Edible Meat Offal accounted for another 20.8%. Beverages (wouldn’t you know) and Dairy Products (say cheese) together accounted for another 8.7% before the first non-agricultural commodity (Industrial Machinery) joined the list of Oakland’s top exports by value.

The Port of Oakland’s especially vital role in supporting Northern California’s vast and diverse agricultural economy should come as no surprise, unless, of course, you’re a clueless government official in Sacramento. Apart from the fact it is often the last West Coast stop for vessels heading back across the Pacific, its location could hardly be more ideal. The port sits at the center of what is arguably the most valuable agricultural real estate on the planet, an arc of farms, ranches, dairies, and wineries that stretch from coastal Sonoma County to the north through Napa’s wine country before sprawling out into the Great Central Valley and then sweeping back to the coast through the Salinas Valley and Monterey County.

As Exhibit A indicates, Oakland last year accounted for 47.7% of the nation’s entire export trade of containerized Edible Fruits and Nuts (HS 08). The two San Pedro Bay ports collectively held a 26.2% share, while the Northwest Seaport Alliance Ports of Tacoma and Seattle handled 19.4% of the trade.

As Exhibit A further reveals, the Big Five USWC ports shipped more than 93% of the nation’s containerized exports of Fruits and Nuts last year. Of more than passing note, Oakland has steadily overtaken the San Pedro Bay ports as the country’s leading export gateway for these treats in the years since the Great Recession. The reason has less to do with port efficiency but rather to the explosive increase in the production of almonds, pistachios, and walnuts in recent years, much of which has been geared to meet foreign demand and almost all of which comes from counties within 175 miles of Oakland.

According to the Agricultural Issues Center at the University of California at Davis, almond orchard acreage more than doubled from just over 510,000 acres to more than 1 million acres from 2000 through 2018. During the same period, yield per acre surged from just under 1,400 pounds to about 2,000 pounds. Just under two-thirds (65.9% last year) of the state’s almond production is exported. Similarly, 64.3% of California’s walnut production in the latest marketing year was exported.

California, according to the American Pistachio Growers, produces 99% of the nation’s crop, with a farm gate value of $1.6 billion to the state’s economy. (Farm gate value is essentially what the farmer gets.) In 2017, before tariff wars erupted, U.C. Davis researchers found that some 78% of the state’s pistachios found their way to foreign markets. Pistachios are now second only to almonds among California’s leading agricultural exports, outranking dairy products, wine, and walnuts, table grapes, and rice.

Oakland’s proximity to the Sacramento and San Joaquin Valleys, where the great majority of the state’s nut crops are grown, has propelled the growth of its farm export trade from a 44.5% share of all U.S. nut exports (by tonnage) in 2003 to a 68.9% share last year.

Would you care to see our wine list, madam? If you were to order a bottle of American wine while traveling abroad, there’s a 91.7% chance it was produced in California. That’s according to the folks at UC Davis, where they know a thing or two about grape-growing, wine-making, and marketing. While most consumers probably think Napa when they think about California wines, nearly 80% of the state’s wine grapes are actually grown and vintaged in the hot, dry expanse of the San Joaquin Valley.

So it is not entirely surprising that the Port of Oakland is the preferred port for California’s wine exporters, as Exhibit B clearly attests. Oakland’s extraordinarily high share of the trade (91.3% in 2019) reflects both its proximity to Northern California’s wine-producing regions but also the rapid increase in wine production in the upper San Joaquin Valley around Lodi and in the Sierra Foothills (Nevada and Placer Counties).

In many instances, American travelers might not recognize the wineries shown on the labels of American wines sold abroad. That’s because almost sixty percent of U.S. wine exports (58.0% last year) are bulk wines shipped in tanks or bladders that may hold as much as 24,000 liters. Most of these bulk wines have been exported to English bottlers for distribution throughout Europe, often under fanciful labels. (Chateau de Turlock?) How, exactly, the United Kingdom’s departure from the European Union will affect this business remains to be seen.

Wines shipped in bulk are not necessarily all in the “vin de plonk” category, although on average their value per kilogram is generally three times less than wines exported in bottles. For a variety of reasons, though, bulk wine shipments are gaining in popularity among wine exporters and importers. Shipping costs are lower, as is the environmental impact, since a 24,000-liter plastic bladder contains the equivalent of 32,000 bottles of wine, meaning that tons and tons of glass bottles don’t have to make the long-haul trip.

How about a side dish of wholesome vegetables from America? If you’re a really finicky eater, and it’s a plate of mixed grown-in-the-USA greens you want with your dinner abroad, Exhibit C indicates they more than likely traveled your way through USWC ports, especially the Northwest Seaport Alliance Ports of Tacoma and Seattle. Together, those two gateways accounted for 49.8% of containerized U.S. exports of Edible Vegetables (HS 07) last year. Savannah’s share? Oh, that would be all of 0.2%.

What’s the next big agricultural export commodity that will come through USWC ports? How about all of those forest leaves we’ll be raking once the western fires subside. While it’s not clear there’s much of an overseas market for mulch, there are definitely lots of empty outbound containers begging to be filled.

Disclaimer: The views expressed in Jock’s commentaries are his own and may not reflect the positions of the Pacific Merchant Shipping Association.