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"As far as the Monterey economy is concerned, it's outside competition. We used to ship a lot of broccoli into Japan, and in the past few years, China has pretty well taken over that market."
— Basil Mills, President, Mills Family Farms
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Cluster Projects - Agriculture
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C2 is a unique opportunity to bring agricultural industry leaders together — combining forces — to further create one of the world's strongest and most resilient agricultural clusters.
Click here to view a flowchart illustrating the interdependent relationships of the Monterey County Agricultural Cluster.
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Introduction
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This cluster is defined very broadly to include: crop production and services, livestock, food processing, agricultural machinery and equipment, as well as agricultural-related transportation and distribution.
Crop Production and services involve companies primarily engaged in performing soil preparation services, crop services, veterinary services, other animal services, farm labor and management services, and landscape and horticultural services. Employment in Monterey County is highly concentrated in these activities.
Food Processing, while not quite what it was in the heyday of Monterey's canning industry, still holds potential. Today it encompasses activities like bagging pre-cut lettuce, preserving and dehydrating fruits and vegetables, and winemaking. This cluster offers excellent employment opportunities at higher skill and wage levels than created by crop production alone.
Agricultural Machining & Equipment, because agricultural and horticultural industries have been so significant in Monterey County's economy for so long, there may be unique advantages present in the production, repair and maintenance of farm, garden, and construction machinery and equipment.
Agricultural Transportation and Distribution provides local and long-distance trucking or transfer services, the storage of farm products, the operation of terminal facilities for handling freight, as well as the services incidental to transportation, such as forwarding and packing services, and the arrangement of freight transportation. Many grower-shippers haul their own produce and handle their own transportation logistics prior to the sale of their produce. Most produce is delivered FOB to the buyer, who then is responsible for transporting it out of the County.
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Overview of the Industry
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Agriculture continues to be a mainstay of our regional economy. Over 26 crops are grown. In 2004, revenue from crop sales contributed $3.4 billion to the economy and employed over 50,000 people. We can point with pride to our agriculture industry's high productivity, standard setting product quality, revenue growth (up 3.2% from 2003), and pioneering leadership.
The agriculture cluster picture isn't all roses and champagne though. Overall, incomes are shrinking despite increased shipments as growing and shipping costs eat away margins. Other warning signs are flashing too: fewer educational institutions to train for the next generation of leaders and increasing pressure from foreign growers. The agriculture cluster's complex framework of companies, including growers, service providers, livestock breeders, food processors, equipment sales, and transportation and distribution services hamper attempts to create longstanding linkages and alliances.
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Action Strategies
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Improved market focus: The increasing reliance upon global markets, the commensurate increase in foreign competition, changing consumer demands, and fast-paced innovations are pushing marketing resources to the breaking point. One way to optimize resources is to collaborate on pre-competitive areas such as market intelligence, supplier development and joint policy advocacy.
Cluster development: While farmers are fiercely independent and intensely competitive, they do understand the value of certain collaborations: witness the Grower Shipper Association and the Vintners and Growers Association. These cluster members realize how important it is to speak with a loud, unified voice, especially in relations with regulatory and public policy agencies.
Build specialized county economic infrastructure: Agriculture, like all industries, has special needs to keep current with trends and maintain the competitive edge. This strategy focuses on three economic infrastructure issues: education institutions to provide the special skills and training; emerging technology and sources for research and development; and finance tools and financiers sensitive to this market.
Public-private collaboration: Growing regulatory pressures are making collaboration between the private and public sectors a challenge. C2 is a safe forum for the two groups to voice issues, find common ground and build consensus.
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