California Ag Network

Category: Non-Video

  • Opportunities for U.S. Ag Products in Vietnam and Thailand

    USDA Foreign Ag Service — Vietnam offers abundant opportunities for exporting consumer-oriented products, despite the challenges of recovering from the COVID-19 pandemic and dealing with high inflation. The Vietnamese economy is poised for significant expansion in the coming decades. With a burgeoning population and a growing middle class, Vietnamese consumers are becoming more discerning about the origin and composition of their food. As suppliers of safe and high-quality agricultural products, U.S. agricultural exporters are in a good position to bolster sales in the Vietnamese market for commodities such as tree nuts and dairy products. Vietnam also has growing sectors able to absorb high-value U.S. products such as retail, tourism, and food processing, and consumers are increasingly focused on health and wellness. For similar reasons, notably a growing middle class and strong domestic industries, there are also opportunities in Thailand for consumer-oriented agricultural products from the United States.

    Macroeconomic Perspective of Vietnam

    Vietnam, a country of 105 million people, is among the fastest growing economies in the world. In 2024, the real gross domestic product (GDP) growth of Vietnam is expected to stabilize – at 6.0 percent after reaching 8.1 percent in 2022. This growth is supported by the vast expansion in the services and industrial sectors and the continued recovery of tourism following the COVID-19 pandemic. The GDP per capita in 2023 was $4,284, an increase of $160 from 2022. According to the World Bank, interest rates in Vietnam remain steady due to domestic monetary policy actions. Vietnam is strategically located in Southeast Asia maintaining influentially positive regional ties. Overall, Vietnam is a dynamic market with a rapidly growing middle class and young population influenced by global consumer patterns, rising per capita income, and an expanding economy in key sectors such as retail, tourism, and food processing.

    Vietnam Agricultural Trade Overview

    In 2023, Vietnam imported $32 billion of agricultural products from the world. Imports have increased over the past three years as Vietnam recovered from COVID-19 related trade and travel disruptions. In 2023, the top suppliers of agricultural products to Vietnam were China, Brazil, and the United States, followed by Australia, India, and Cambodia. Over the last thirty years, Vietnam has ratified several regional and bilateral Free Trade Agreements (FTAs) with major trading partners. Where trading partners do not have an FTA in place, Most Favored Nation tariff levels apply.

    Opportunities for U.S. Exports to Vietnam

    Robust opportunities exist for U.S. agricultural products thanks to projected overall market growth and strong preference for high-quality, safe U.S. goods. The United States exported $3.1 billion in agricultural products to Vietnam in 2023, the third largest agricultural product exporter to Vietnam behind China and Brazil. Top exports were in bulk commodities related to feed and manufacturing. While these products make up a large portion of the U.S. market share, many consumer-oriented goods are also among top products exported and represent exciting growth opportunities. Despite a rapidly growing middle class and preference for U.S. high-quality products, Vietnam is a price sensitive market.

    Demand for high-value consumer-oriented products

    Vietnamese consumers demand high-quality and safe products. U.S. exporters of consumer-oriented products are well poised to fill this demand as both the population and the middle class continue to grow. U.S. products are sold at various levels – retail, hotel, and food processing– all growing industries in Vietnam. In 2022, Vietnam’s retail sales increased by 13 percent, the hotel, restaurant, and institutional (HRI) market grew by 51 percent, and the food processing and manufacturing sector grew by 9 percent. According to Euromonitor International, Vietnam’s HRI sector is comprised of over 330,000 outlets in the following subsectors: restaurants, bakeries, cafés and bars, street stalls, hotels, and institutional catering services. Consumer-oriented U.S. products are also further used as ingredients in Vietnam’s food processing sector. Food processing ingredients include dairy products, other edible bovine products, processed fruits, tree nuts, peanuts, and potatoes.

    Dairy Products

    In 2023, U.S. exports of dairy products to Vietnam were $146 million. Non-fat dried milk powder and fresh cheese represent high value prospects for U.S. exporters. While cheese is typically not consumed as part of the traditional diet, food service establishments and the exposure of younger generations to global diets continue to drive the demand for both hard and soft cheeses. According to Euromonitor International, an increasing consumer focus on healthy living is also bolstering the demand for higher protein and calcium cheeses like packaged hard cheese but may present challenges for cheeses with higher sodium and saturated fat contents. Non-fat dried milk powder for use in nutritional drinks and reconstituted milk are also popular in Vietnam and offer a safe and shelf-stable alternative to fresh milk. Other dairy products with good export potential include lactose and whey, which currently constitute 17 percent and 10 percent of U.S. dairy exports to Vietnam respectively.

    Fresh Fruits

    Vietnam holds high market potential for increased exports of fresh fruits from the United States. Exports of U.S. fresh fruits in 2023 reached $105 million (a 13-percent decrease from 2022 due, in part, to domestic inflation) and consisted mainly of apples, cherries, and grapes. USDA worked with other USG agencies to gain market access for U.S. grapefruit in February 2023. In total, Vietnam has granted access for seven fresh fruits of U.S.-origin: apples, cherries, grapes, pears, blueberries, oranges, and grapefruit. Imported fruits will become increasingly popular as their affordability improves because of economic growth and as Vietnamese consumers adopt healthier diets.

    Meat Products

    As the economy and international tourism continue to rebound, consumption of imported meat is expected to grow in both value and volume in the coming years. According to Euromonitor International, the increased focus on health and fitness is also fueling a shift towards leaner proteins such as chicken, although demand for red meat remains strong. High-prospect meat products include frozen/chilled beef (boneless and bone-in), frozen chicken (leg quarters, legs, and paws), and turkey. Price competitive imported frozen products do well over local chilled options.

    Processed Products

    In 2023, Vietnam was the United States’ 11th largest market for processed agricultural products. Fifteen years ago, it was the 24th largest market. Products with high growth over the period include processed egg products, chocolate and confectionary, non-alcoholic beverages, pet food, condiments and sauces, processed vegetables, and snack foods. According to the FAS Exporter Guide for Vietnam (VM2023-0074), the COVID-19 pandemic resulted in many shifts in the shopping habits of Vietnamese consumers. One such shift is the increased purchase of shelf-stable foods using online shopping and door-to-door delivery services, with e-commerce sales increasing 26 percent in 2022.

    Condiments and sauces: According to Euromonitor International, pickled, and low-salt products have high potential in the Vietnamese market. Overall, the country is becoming more health conscious, and the government is trying to reduce the incidence of noncommunicable disease. These goals have shifted demand to lower sodium condiments and sauces, as well as plant-based products, dairy-free products, sugar-free products, and products with fewer ingredients.

    Processed fruits and vegetables: Dried and processed fruits are used domestically as ingredients and for snacking. Increasing demand for healthy foods will continue driving consumption as local production is unable to keep up with domestic demand. While Vietnam is a large producer of vegetables, food manufacturers in Vietnam use a mix of locally produced raw materials and imported food ingredients in their operations. The top selling U.S. products in this category are raisins and frozen potatoes.

    Tree Nuts

    Tree nuts are the fifth largest U.S. agricultural export to Vietnam. In 2023, U.S. tree nut exports reached $238 million, a 37-percent increase over 2022. Major U.S. exports include pistachios, almonds, walnuts, cashews, and pecans. Recovery of the manufacturing and tourism sectors has increased demand for U.S. tree nuts. While demand remains strong, when imported for local consumption, tree nuts are subject to import tariffs from 8 to 30 percent. However, most U.S. tree nuts imported into Vietnam are further processed and re-exported to third countries and are therefore exempted from import tariffs.

    Opportunities for U.S. Consumer-Oriented Goods in Thailand

    Many opportunities for U.S. consumer-oriented good exports also exist in Thailand, which boasts the fourth highest per capita income in the Association of Southeast Asian Nations after Singapore, Brunei, and Malaysia. With a population of 70 million and real GDP growth of 3.0 percent forecast in 2024 compared to 2.5 percent in 2022, private consumption is expected to grow with the expansion of the middle class. GDP growth is forecast to reach 3.5 percent by 2027.2 As much of the Thai economy relies on tourism, post-pandemic recovery is paramount for continued economic growth. After a period of high consumer price inflation in 2022, prices have stabilized while inflation is expected to remain below 2 percent in the near term. According to the World Bank, per capita GDP in 2022 was $6,910, $150 lower than in 2021. Strong fiscal and monetary policy in Thailand have resulted in growing investment in the country. As a result, the prospects for Thai economic growth are promising.

    Thailand Agricultural Trade Overview

    In 2023, Thailand imported $17 billion of agricultural products, the top suppliers of which were Brazil, China, and the European Union. The United States was the fifth largest supplier of agricultural products to Thailand with $1.2 billion in exports. Top U.S. agricultural exports to Thailand were in bulk commodities related to feed and manufacturing, but strong opportunities exist for U.S. consumer-oriented products as well. Like Vietnam, Thailand also has large retail, tourism, and food processing sectors that rely on U.S. agricultural products. According to the FAS Exporter Guide for Thailand (TH2022-0083), demand for high-convenience processed foods as well as ready-to-eat meals, healthy food products, and food delivery are rising among Thai consumers. Plant-based and free-from products are also growing in popularity. Over the last twenty years, Thailand has ratified several regional and bilateral FTAs with major trading partners. Where trading partners do not have an FTA in place, Most Favored Nation tariff levels apply.

    Products with growth potential include:

    • Beef Products: U.S. exports of beef and beef products to Thailand have more than doubled in the last ten years, driven by exports of boneless frozen beef. Demand for imported beef is increasing because of urbanization, rising incomes, tourism, and the slow recovery of the domestic livestock sector following severe pandemic-related disruptions.
    • Dairy Products: Consumption of cheese and non-fat dried milk powders for nutritional drinks is expected to grow in Thailand. As in Vietnam, consumers are increasingly influenced by western-style diets, which incorporate cheese products into healthy lifestyle messaging.
    • Dog and Cat Food: The dog and particularly cat pet populations in Thailand are expanding, as highlighted in FAS reporting (TH2021-0063
    • ). As consumers shift to healthier lifestyles themselves, they have increased purchases of premium packaged pet food products like treats and pet foods labeled as natural and healthy. Thailand allows dry and wet pet food imports from the United States.
    • Fresh Fruits: The United States consistently ranks as a top five supplier of fresh fruit to Thailand. Top exports include fresh apples and cherries, both of which grew in 2023, increasing 35 percent and 83 percent by value. Fresh fruit imports are challenged by fluctuations in the Thai baht, but demand for imported fresh fruit remains strong.
    • Wine: In February 2024, Thailand removed its high import tariff and reduced the excise tax on wine to promote tourism and increase spending by foreign and domestic tourists. These measures are expected to improve the competitiveness of U.S. wines. Wine consumption is increasing among Thai consumers due to the growing middle class, large tourism industry, and expansion of “wine culture” in hotels, restaurants, and bars. U.S. exports of wine and related products grew by both value (6 percent) and volume (18 percent) in 2023.

    Conclusion

    With projected population and economic growth, Vietnam will remain a market with high growth potential for U.S. agricultural exports. Consumer-oriented products present particularly good opportunities, as Vietnamese consumers increasingly demand high-quality, safe, and nutritious products. Dairy products (cheese, non-fat dried milk powder), fresh fruits (apples, cherries), meat products (beef, poultry), processed products (condiments, pet food), and tree nuts (pistachios, almonds) are all exciting growth areas for U.S. exports. Thailand also presents opportunities for premium consumer-oriented products for many of the same reasons as Vietnam: a growing population and middle class, increased preference for healthy and nutritional products, and strong sectors able to absorb high-value U.S. products. In both countries, there is strong and growing consumer preference for U.S. branded products and exporters of U.S. agricultural products are sure to find exciting prospects in these markets.

  • Westlands Water District Announces 2024 Scholarship Winners

    Westlands Water District is proud to announce the recipients of its 2024 Westlands Scholarship. The annual Westlands Scholarship program recognizes and rewards exceptional graduating seniors from westside high schools. This year, the District is proud to extend the scholarship to support 20 youth in achieving their higher-education goals. Each scholarship recipient was selected based on a combination of academic achievements, leadership, contributions to the local community, and future career goals.

    “Westlands is honored to support the educational journey of some of our region’s outstanding youth for the 18th year,” said Allison Febbo, General Manager, Westlands Water District. “Recognizing that education can be expensive, we hope to help reduce barriers for students in our communities to pursue college and career paths so that they can achieve their dreams. These talented students are the ones who will define the future of the Central Valley.”

    The District congratulates the following 20 recipients of the 2024 Westlands Scholarship. Amongst our recipients we have future leaders in education, healthcare, business, and science.  Below are excerpts from each recipient’s application when asked about the importance of agriculture and water in the San Joaquin Valley.

    Moises Solorio, Future Ag. Business Leader

    Avenal High School – California State University, Fresno

    “Agricultural water plays a crucial role in sustaining communities and livelihoods. Many families in the West Side of the San Joaquin Valley depend on agriculture for employment and income. Whether they work directly on farms, in agricultural support industries, or in businesses that benefit from the agricultural sector, water is essential for maintaining these jobs and preserving the fabric of rural communities.”

    Angelina Lee, Future Nurse

    Coalinga High School – California State University, Fresno

    “My family comes from a generation of farmers. It is all my family has known since immigrating to the United States since they never realized or learned the importance of getting an education… Agriculture has opened many doors for my family. It has helped keep my family alive and well and provided many opportunities for us.”

    Susana Licea, Future Registered Nurse

    Coalinga High School – West Hills College

    “Agriculture plays a crucial role in the economy of California and the west side of the San Joaquin Valley. The agricultural industry provides employment opportunities for thousands of people, from farmers and farmworkers to truck drivers and food processors. Without reliable access to water for irrigation, farms wouldn’t be able to operate efficiently, leading to job losses and economic instability in rural communities.”

    Nolan Herrin, Future Business Leader

    Coalinga High School – California State University, Fresno

    “I was born in 2006. I have been riding around the farm for as long as I can remember. However, it wasn’t until 2020 that I got my first job checking wells for my dad. Then, from there in the summer of 2022, I started working with my grandpa Chuck, learning the many aspects of farm labor contracting. I did that again in the summer of 2023, and plan on working for either my dad or grandpa again this summer. During my lifetime, I have had a first-hand view of how important agriculture is and how many lives are affected by it. Not only does agriculture put food on the table for every person in the world. It is also how my family and so many others make a living within the Westlands Water District.”

    Angela Rosa, Future Biologist

    Firebaugh High School – California State University, Fresno

    “Once I grew older I realized the importance of agriculture in our community, and how it helped my father stay secure, so I became involved in agriculture at our school. I volunteered at our annual Ag Awareness Day, to ensure young children know and understand the opportunities agricultural jobs provide. Although it might seem that agriculture affected my life negatively because of the circumstances we faced, without my father working in this field we would not have a home. And so for that I encourage agricultural education because this is a pathway that will always be secure in California.”

    Isabella Silva, Future Nurse

    Sierra Pacific High School – California State University, Fresno

    “Its impact extends beyond serving as a cornerstone that has shaped the opportunities available to my parents in ways that were previously inconceivable to my grandparents. Agriculture has bestowed upon my family a foundational platform that we cherish deeply, filled with immense gratitude. As Steve Jobs famously remarked, “Your time is limited, don’t waste it living someone else’s life.” I am thankful to leverage the successes that agriculture has bestowed upon my family, using them as stepping stones to further elevate my achievements and pave the path for future prosperity.”

    Brayson Gillio, Future Ag. Business Leader

    Sierra Pacific High School – California State University, Fresno

    “I am devoted to assisting my father with our 65-year-old family business, which I hope to be the owner of one day. This will make me the fourth-generation owner of our company. My goal would be to expand this business and gain the education to help better assist the community.”

    Sofia Godinho, Future Speech Pathologist

    Sierra Pacific High School – San Diego State

    “The west side of the San Joaquin Valley, with its fertile soil and ample water supply, supports the growth of a wide variety of crops. Without sufficient agricultural water, the region would struggle to meet the demand for fresh produce, impacting the availability and affordability of food for millions of people.”

    Jason McDonald, Future Education Leader

    Lemoore High School – Minot State University

    “Water to the San Joaquin Valley is crucial for the people who own farms and those making a living providing the state its rich products. Products such as fruit and vegetables, cotton, feed for the meat products that we purchase and the dairy products we consume. Water makes all of this happen. When the farmers do not get the water needed it creates a ripple effect. Less water equals less crops, equals higher prices for all products. Less crops equal less workers needed. This effects towns and cities as people follow the work and towns dry up people move away.”

    Daisy Albarran, Future Administration of Justice Leader

    Lemoore High School – West Hills College Lemoore

    “While my parents were able to further their education in college, my grandparents continued to work in the fields for Wonderful Company for years after my parents had left Avenal. It is thanks to our valley’s agriculture that has kept my grandparents employed, supported their families, and brought greater opportunities to each generation after them. I am forever grateful for the sacrifices they have made to come to this country and the hard work that they have put in to make their dreams come true. The Central Valley is my home, and I hope to help my local community continue to thrive as I become a working member of it myself after I graduate high school.”

    Paige Orton, Future Teacher

    Lemoore Middle College High School – Brigham Young University Idaho

    “Agriculture is a part of our lives every single day. Despite taking care of the land and animals and it being very time-consuming, I enjoy it. I enjoy raising chickens. I enjoy helping my father when he needs it. I enjoy any opportunity to see and hang out with him when he isn’t outside or at the ranch. I enjoy being deemed responsible for taking care of other lives. I raise my own plants too. Having agriculture as a part of my life every single day makes me want to keep doing it.”

    Arley Melendez, Future Political Science Leader

    Mendota High School – UC Berkeley

    “The loss of water will impact thousands of families who work in the fields. Families who have no high school degree, who can’t speak English, and who don’t have citizenship. Families like mine. According to Maven’s article, over 42,000 jobs are expected to be lost due to groundwater restrictions from SGMA. Moving forward, there is still uncertainty, but one thing is evident: water keeps the world and society revolving.”

    Aylany Macias, Future Medicine/Public Health Official

    Mendota High School – UC San Diego

    “Despite its challenges, agriculture has been the one factor that has helped us survive. Due to agriculture, we’re allowed to have a roof above us and a food on the table every day. My exposure to agriculture has also allowed me to realize that I want to aspire for bigger and better things. Everyday as I see my parents leave the house at three in the morning to work in those fields, I think of the opportunities I can take advantage of to make my future better.”

    Cherrilyn Segovia Ruiz, Future Pediatrician

    Mendota High School – UCLA

    “Across our community, many families rely on agricultural jobs to make ends meet and create better prospects for their loved ones. It’s a testament to their hard work and dedication to providing for their families while contributing to the agricultural industry’s vitality.”

    Maria Mendoza, Future Public Health Official

    Mendota High School – Cal Poly

    “The summer of eighth grade was the first time I got to go work with them. I remember

    that day we were told we had to clean tomatoes by removing weeds. The hot sun was unbearable, but I was somehow able to do it for the entire two months of summer break. In those two months, I learned agriculture’s invaluable effect on my life. Agriculture wasn’t just a means to an end; it was the very foundation upon which my dreams were built. It provided not only a source of income but a sense of pride and purpose.”

    Leonel Solorio, Future Biologist

    Riverdale High School – California State University Monterey Bay

    “The agricultural industry has affected my life because it was my job in the summertime. Even though I was working under extreme conditions it has made me value education. My family thinks that agriculture is just manual labor, however, there is so much more. When I was younger, we struggled to have food on the table. Knowing the struggle of going hungry pushed me to want to make a difference and help others not go through hunger. I volunteer for my local Lanare Community Food Bank four times per month, sometimes even more. I coordinate food deliveries, pack food, distribute to families, and translate. I derive more satisfaction from making a lasting difference in my community than spending my free time at home.”

    Angela Vazquez Solorio, Future Mathematician

    Riverdale High School – Lemoore College

    “My dad used to work in a dairy, where his schedule would change every few weeks. Because of his experience working in agriculture, he taught me to be a person who can adapt. Now, he does tractor maintenance on a farm. Agriculture has affected how comfortable my life is. My family can have food on the table because of the jobs agriculture provides. Not only that, everyone has food on the table because of the agricultural business and the hard work of agricultural workers.”

    Jimena Arias Estrada, Future Business Administrator

    Riverdale High School – CSU Sacramento

    “Both of my parents came to California from Mexico to give me and my siblings a better future. I have 2 older siblings and 1 younger brother. Since I was born, my dad has been my family’s only financial provider. He has always worked in the agriculture industry. He transfers and spreads soil in the fields. Although he has had a few different jobs as time has progressed, they have all been in the agriculture field and his job alone has been able to support me and my family throughout all my life.”

    Denise Torres, Future Psychologist

    Tranquility High School – CSU San Francisco

    “I am the oldest child in my family and the daughter of two immigrants. I knew I wanted a better future for my family and myself as I saw my father’s daily struggles and spent the few hours a day he spent with me at night and after he got home from work. I had to take on the role of mother to my siblings at this point. My mom’s death left our family struggling as a whole. In our tiny apartment, my dad was the only one who could support the family.”

    Oscar Duran Vega, Future Food Scientist

    Tranquility High School – California State University, Fresno

    “My family’s livelihood also depends on agriculture. Both my parents work as agricultural workers. If agriculture didn’t exist, my parents would not have jobs. If agriculture also didn’t exist, some of my favorite classes for high school work would not be available. Some of my favorite teachers are also a part of the Ag industry. My two favorite classes are Ag banking, and Mech 2. I have learned a lot from these two classes.”

    About Westlands Water District

    Westlands Water District is recognized as a world leader in agricultural water conservation and has served the farmers and rural communities on the west side of Fresno and Kings counties for more than five decades. As stewards of one of California’s most precious natural resources, Westlands continually invests in conservation, and champions farmers deploying innovative irrigation methods based on the best available technology.

  • Small But Promising Ag Export Opportunities in Denmark

    Although a small market in the European Union, Denmark offers export opportunities for U.S. exporters of wine, seafood, tree nuts, and several other products. The exporter guide focuses on Consumer Oriented Products and Seafood products and provides practical tips for U.S. exporters on how to conduct business in Denmark.

    Market Fact Sheet: Denmark

    Denmark, a Member State within the European Union (EU), is a high-income country in Scandinavia. The country’s open economy is dependent on foreign trade and the government supports a relatively liberal trade policy. Its population totaled almost six million in 2023.

    Imports of Consumer-Oriented Products:
    Products from other EU Member States lead Danish imports of consumer-oriented products. In 2023, the United States was the 12th largest supplier of these products to Denmark, with imports valued at over $104 million.

    Food Processing Industry:
    Denmark’s food and beverage industry comprises over 1,500 companies with a collective turnover of over $30 billion. Denmark is one of the world’sleading exporters of meat products, in particularly pork. Other notable Danish exports include cheese, food preparations, and seafood (salmon).

    Food Retail Industry:
    The Danish retail sector is rather consolidated, with Coop, Salling, and Dagrofa dominating the market. In 2023, exports of consumer-oriented products totaled $14.2 billion. Denmark continues to be a price sensitive market and the Danes spend about ten percent of their disposable income on food and beverages. The sector’s turnover for 2023 is forecasted $16 billion.

    Foodservice – HRI Industry:
    Despite the rising costs of living, the foodservice industry’s turnover is back on track. Consumers returned en-masse to HRI foodservice outlets. Last year, total sales were valued at $9.2 billion and exceeded the pre-pandemic level.

    Quick Facts CY 2023
    Imports of Consumer-Oriented Products, total: $10.1 billion

    List of Top 10 Growth Products in Denmark (imported from the World):

    1. Dairy products

    2. Bakery goods

    3. Wine

    4. Fresh fruit

    5. Beef products

    6. Pork products

    7. Food preparations

    8. Fresh vegetables

    9. Processed vegetables

    10. Cocoa products

    Food Industry by Channels 2023, in $ billion: Consumer-Oriented Products Imports $10 Consumer-Oriented Products Exports $14 Agricultural & Related Products Imports $22 Agricultural & Related Products Exports $26 Food Industry $30 Food Retail $16

    Food Service

    Top 10 Food Retailers in Denmark: SuperBrugsen Meny Spar Føtex Netto Rema1000 365discount Lidl

    Bilka

    GDP/Population: Population: 5.9 million GDP: $415 billion
    GDP per capita: $70,368

    Strengths/Weaknesses/Opportunities/Challenges

    Strengths:
    U.S. producers offer a great variety of food products with a consistent quality and have a great story to tell about sustainability.

    Weakness:

    Transatlantic transportation is costly and takes time. Some U.S. food products suffer from a negative perception among the Danes.

    Opportunities:
    The Danish processing industry increasingly demands U.S. seafood. Strong demand for U.S. wines in environmental- friendly packaging and products that are healthy and nutritious.

    Threats:
    There is fierce competition on price, quality, uniqueness, and innovation from other EU Member States.

    Data and Information Sources: Trade Data Monitor, industry experts, company websites Contact: FAS The Hague, agthehague@usda.gov

    Macroeconomic Situation

    Denmark is a small country with just under six million inhabitants. The Danish labor force totaled just over three million people at the end of 2023, and approximately 32 percent are employed in the public sector. Denmark’s OECD-harmonized unemployment rate was 5.3 percent in January 2024, lower than the EU-27’s average rate of six percent but above the OECD average of 4.8 percent. The labor force participation rate is among the highest in the world. In the fourth quarter of last year, 81.2 percent of working-age population participated in the labor force, and the employment rate was 77 percent.

    Many independent observers regard Denmark as one of the world’s most attractive business environments and the country ranks highly in indices measuring political, economic, and regulatory stability. Denmark is a constitutional monarchy which shares a southern border with Germany and is connected, via a bridge, with Sweden. The country has been a member of the European Union (EU) since 1973. It maintains a fixed exchange rate policy, with the Danish Krone linked closely to the Euro. Denmark is a social welfare state with a thoroughly modern market economy heavily driven by trade in goods and services. It has one of the highest GDP’s in the world. More information can be found in the Investment Climate Statement, https://www.state.gov/reports/2023-investment-climate- statements/kingdom-of-denmark/

    Read the full USDA Foreign Ag Service Report HERE.

  • USDA Now Accepting Applications to Help Cover Organic Certification Costs

    Through the Organic Certification Cost Share Program (OCCSP), USDA’s Farm Service Agency (FSA) will cover up to 75% of organic certification costs at a maximum of $750 per certification category. FSA is now accepting applications, and organic producers and handlers should apply for OCCSP by the Oct. 31, 2024, deadline for eligible expenses incurred from Oct. 1, 2023, to Sept. 30, 2024. FSA will issue payments as applications are received and approved.

    “Costs associated with obtaining organic certification can be a barrier for California producers wanting to get certified,” said Blong Xiong, FSA State Executive Director in California. “Through OCCSP assistance, FSA helps California organic producers obtain certification and leverage related benefits like premium prices for commodities and access to broader markets and additional technical assistance.”

    OCCSP was part of a broader organic announcement made by Agriculture Secretary Tom Vilsack on May 15, 2024, which also included the Organic Market Development Grant program and Organic Transition Initiative.

    Eligible Applicants, Expenses and Categories

    OCCSP provides cost-share assistance to producers and handlers of organic agricultural commodities for expenses incurred obtaining or maintaining organic certification under USDA’s National Organic Program.  Eligible OCCSP applicants include any certified organic producers or handlers who have paid organic certification fees to a USDA-accredited certifying agent.

    Cost share assistance covers expenses including application fees, inspection costs, fees related to equivalency agreement and arrangement requirements, inspector travel expenses, user fees, sales assessments and postage. OCCSP pays a maximum of $750 per certification category for crops, wild crops, livestock, processing/handling, and state organic program fees (California only).

    How to Apply

    To apply, producers and handlers should contact FSA at their local USDA Service Center and be prepared to provide documentation of organic certification and eligible expenses. OCCSP applications can also be submitted through participating state departments of agriculture.  For more information, visit the OCCSP webpage.

    Opportunity for State Departments of Agriculture

    FSA is also accepting applications from state departments of agriculture to administer OCCSP. FSA posted a funding opportunity summary on grants.gov and will electronically mail the Notice of Funding Opportunity to all eligible state departments of agriculture. Applications are due July 12, 2024.

    If a state department of agriculture chooses to participate in OCCSP, both the state department of agriculture and FSA county offices in that state will accept OCCSP applications and make payments to eligible certified operations. Producers or handlers can receive OCCSP assistance from either FSA or the participating state department of agriculture but not both.

    More Information

    USDA offers other assistance for organic producers, including the Organic Transition Initiative (OTI), which includes direct farmer assistance for organic production and processing and conservation. For more information on organic agriculture, visit farmers.gov/organic.

    To learn more about FSA programs, producers can contact their local USDA Service Center.  Producers can also prepare maps for acreage reporting as well as manage farm loans and view other farm records data and customer information by logging into their farmers.gov account. If you don’t have an account, sign up today.

  • Unofficial Facility Registration Websites: Warning for Ag Exporters

    The USDA Foreign Ag Service (FAS) has received inquiries about several websites that offer facility registration to export various food and agricultural products to the People’s Republic of China (PRC). Many of these websites, however, are not official PRC government websites. Exporters should register their facilities through official government websites or through a U.S. government agency.

    The General Administration of Customs of the PRC (GACC) requires establishments exporting specific categories of food products to the PRC to register with either the Bureau of Import and Export Food Safey (BIEFS) or with the Department of Animal and Plant Quarantine (DAPQ). Depending on the product, businesses can either self-register or are required to work with a U.S. government agency to register. Those establishments self-registering with BIEFS will do so through the China Import Food Enterprises Registration (CIFER) system.

    FAS has received inquiries about several websites or service providers that purportedly offer facility registration services. These websites disguise themselves as an official GACC website or as a website of the State General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), an agency that no longer exists after merging to become GACC. These non-official websites attempt to lure overseas manufacturers to register their facilities to export their product to China in exchange for a fee. Several of these websites look legitimate, and contacts who have engaged these websites have shared that customer service representatives are responsive to inquiries. These websites will often have“GACC” or “CIFER” in the name, while others may reference “AQSIQ” in the name. Some of the websites mirror the layout of the official website and display official logos, which has misled exporters to believe the website is the official website for registering facilities in the PRC. In addition, these websites are usually the top results of internet searches making it even harder to determine that they are not legitimate. These websites, however, are not official PRC websites for facility registration and, GACC staff have shared that, when questioned, these spurious websites are not official.

    The official GACC CIFER single window portal website address is https://cifer.singlewindow.cn. It is the only website to register products that fall under Decree 248 with BIEFS, while DAPQ facility registration must be done via a government agency.

    BIEFS Registration

    BIEFS requires establishments to register in the CIFER system prior to shipping products covered under Decree 248. Please see the latest USDA GAIN Report updating the list of products subject to Decree 248: Decree 248 Product List Update – May 2024 | CH2024-0064. Depending on the product, exporters can register their facilities through a self-registration process or will need the assistance of the U.S. competent authority. The attached spreadsheet in the report lists products covered by Decree 248 by HS code and indicates whether the facility can be self-registered or if it needs assistance from the U.S. competent authority.

    NOTE: U.S. exporters of meat, poultry, dairy, infant formula, and seafood products should follow the procedures for exporting to the PRC as outlined by relevant U.S. food safety regulators: the Food Safety and Inspection Service (FSIS) and the Food and Drug Administration (FDA). For further assistance, FDA-regulated facilities may contact: cfsanexportcertification@fda.hhs.gov. mailto:FSIS-regulated facilities are encouraged to seek assistance from FSIS In-Plant Inspection Personnel at their establishments and can also send inquiries to the USDA Food Safety and Inspection Service’s AskFSIS mailbox at https://www.fsis.usda.gov/contact-us/askfsis.

    DAPQ Registration

    DAPQ requires exporters and traders whose commodities fall under DAPQ’s authority, such as grains and oilseeds under PRC Decree 177, pulses, fresh fruits and vegetables, pet foods, compound and mixed feed, feed ingredients and additives, live animals and genetics, and some aquatic products, to register via a government agency. Currently, USDA China offices, FAS and APHIS, manage or administer 43 lists transmitted to GACC DAPQ. These include lists compiled by USDA’s Agricultural Marketing Service (AMS), the USDA AMS Federal Grain Inspection Service (FGIS), the Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA), and industry associations.

    For general information regarding Decree 248, please contact: Decree248Inquiry@usda.gov. For general information regarding DAPQ’s registration process, please contact:

    FASChinaDAPQRegistrations@usda.gov.

  • Organic Trade Association, The Organic Center Awarded $4.4 Million Market Development Grant

    The Organic Trade Association (OTA) and The Organic Center are pleased to be the recipients of $2.2 million in Organic Market Development Grant (OMDG) matching funds from the U.S. Department of Agriculture (USDA) to expand organic markets through consumer education and promotion.  The funds provided by USDA match those provided by the OTA, The Organic Center and Organic Voices for a three-year project totaling $4.4 million.

    The joint project by the trade association and The Organic Center is designed to stimulate the demand for and increase the sales of organic products by promoting the science-backed benefits of USDA certified organic products and farming to consumers. The project will be done in collaboration with Organic Voices and an Industry Advisory Committee.

    “We thank USDA for making this project possible with this important funding. Consumers lack information about all that the USDA Organic label stands for and all the benefits it delivers for human health, the environment, and businesses,” said OTA co-CEO Tom Chapman. “Our project aims to increase the consumption of organic by giving consumers access to more credible information about what organic production and processing means, and the advantages it provides.”

    “We want to educate people about the difference organic makes, and inspire them to choose organic,” said Dr. Amber Sciligo, Director of Science Programs for The Organic Center. “This project will highlight organics’ ability to protect natural resources, sequester carbon and regenerate soil health, while also providing nutritional benefits and protecting us from synthetic pesticides, preservatives, antibiotics and more. The more educated consumers are about organic, the more likely they will seek out that Organic label.”

    The project will develop fresh creative content on the regulatory and science-based environmental, animal and human benefits of organic, focusing on targeted information to motivate consumers to purchase organic products, prioritizing organic dairy, grain and fiber. A full-scale integrated marketing campaign will be launched, and particular focus will be made to ensure that the promotion reaches beyond mainstream organic markets into regions and communities where organic production is not prevalent.

    The project will culminate with a final comprehensive report on effective organic consumer marketing strategies, content, and messaging which will be shared with the entire organic industry through the distribution of printed copies of the report, and availability through social media channels.

    “The longevity of this project will extend far beyond its 3-year timeframe,” said OTA co-CEO Matthew Dillon. “The creation of valuable educational content and marketing resources will continue to benefit organic producers and brands, while the consumer promotion and education campaign will yield a lasting impact by expanding the community of informed organic consumers to create a growing and stable market for organic.”

    The Organic Market Development Grant Program is part of the USDA Organic Transition Initiative, a $300-million initiative launched in 2022, to help existing organic farmers and those transitioning to organic production and processing.

    About the Organic Trade Association

    The Organic Trade Association (OTA) is the membership-based business association for organic agriculture and products in North America. OTA is the leading voice for the organic trade in the United States, representing more than 500 organic businesses across 50 states and 9,500 farmers through its Farmers Advisory Council. Its members include growers, shippers, processors, certifiers, farmers’ associations, distributors, importers, exporters, consultants, retailers and others. OTA’s Board of Directors is democratically elected by its members. OTA’s mission is to promote and protect ORGANIC with a unifying voice that serves and engages its diverse members from farm to marketplace.

    About The Organic Center

    The Organic Center is a nonprofit research and education organization whose mission is to convene credible, evidence-based science on the health and environmental impacts of organic food and farming and to communicate the findings to the public. The Center works to fill critical industry knowledge gaps by managing research projects and providing tools and training to help organic farmers and businesses thrive. Its research projects focus on climate change mitigation and environmental health, human health, and building tools and solutions to support organic operations. The Center operates under the administrative auspices of the Organic Trade Association.

    About Organic Voices

    Organic Voices is a nonprofit organization whose mission is to help consumers better appreciate and eliminate confusion about all the benefits of Organic. It is dedicated to educating consumers about the significance of the USDA Organic seal, ROC certification, and GOTS certification through its Only Organic campaign. It creates compelling educational content tailored to inform and engage consumers, using multiple online channels to reach new audiences through large-scale consumer-facing campaigns. Partnering with brands, retailers, farmers, and consumers, Organic Voices strives to amplify the message of the benefits of organic and establish a unified voice throughout the organic industry.

  • US Organic Marketplace Posts Record Sales in 2023

    U.S. sales of certified organic products approached $70 billion in 2023, a new record for the sector. Dollar sales for the American organic marketplace hit $69.7 billion last year, up 3.4 percent, according to the 2024 Organic Industry Survey released by the Organic Trade Association (OTA).

    Despite stubborn price inflation seen throughout retail aisles, consumers remained clear-eyed about their priorities in the products they chose for themselves and their families, valuing health and sustainability, and seeking out the USDA Organic label. The organic marketplace recalibrated its supply chain and reconciled the cost of doing business in part with increased retail pricing. The industry continued to grow, with organic food sales in 2023 totaling $63.8 billion and sales of organic non-food products totaling $5.9 billion.

    “It is encouraging to see that organic is growing at basically the same rate as the total market. In the face of inflation and considering organic is already seen as a premium category, the current growth shows that consumers continue to choose organic amidst economic challenges and price increases. Although organic is now a maturing sector in the marketplace, we still have plenty of room to grow,” says Tom Chapman, co-CEO of OTA.

    Matthew Dillon, co-CEO of OTA, adds that to achieve this growth, “It is essential to educate consumers that choosing organic is a straightforward way to tackle some of the greatest challenges we face. Whether it’s accessing healthy foods, improving transparency in supply chains, mitigating climate change, supporting rural economic resilience, protecting natural resources, or realizing the multitude of other benefits, effectively communicating and delivering on these promises is the key to expanding organic’s share of our dinner plate.”

    In 2023, the increase in dollar sales in the organic market was driven more by pricing than unit sales. But that said, consumers boosted their purchases of many organic products. Increases in unit sales were reported for up to 40 percent of the products tracked in this year’s survey. The survey also showed that prices for many non-organic products climbed at a faster rate than organic products. This means the price gap between conventional and organic is closing, which should help fuel growth for organic products in 2024.

    The top organic sellers 

    Produce held its spot as the largest organic category in 2023, continuing to be the primary entry point for consumers into the organic market. Organic produce meets the consumer’s desire for clean, healthy food, and the importance of organic’s critical benefit of no toxic

    synthetic pesticides is easy to grasp when buying organic berries or carrots. In 2023, the category grew by 2.6 percent to $20.5 billion. Organic produce now accounts for more than 15 percent of total U.S. fruit and vegetable sales. Top sellers in the organic produce section were avocadoes, berries, apples, carrots, and packaged salads, and organic bananas saw stronger growth in 2023 than non-organic bananas.

    The second biggest-selling food category in the organic aisles was the grocery category with sales of $15.4 billion for a 4.1 percent growth. This new category represents many of the products previously grouped under breads and grains, condiments, and packaged and prepared foods. With 21 different subcategories, close to 40 percent of the sales in the grocery category were driven by the top three performers —in-store bakery and fresh breads with sales of $3.1 billion for a gain of almost 3 percent, dry breakfast goods up around 8 percent to $1.8 billion in sales, and baby food and formula at $1.5 billion for a hefty gain of nearly 11 percent.

    Beverages were the third largest category for organic in 2023, posting $9.4 billion in sales, up 3.9 percent. As always, this category was a driver of innovation with functional beverages, whether for enhanced hydration or mental focus, playing a prominent role.  2023 also saw a surge in new organic non-alcoholic beverages and mocktails. On the flipside, organic wine sales were up 2.5 percent to $377 million, and organic liquor and cocktails, while still the smallest sector of beverages at $59 million, posted over 13 percent growth.

    Organic dairy and eggs, the fourth-largest category in the organic food market is another entry point for consumers who want clean, ethical sources of protein with lower environmental impacts. In 2023, organic dairy and egg sales were up 5.5 percent, reaching $8.2 billion. Organic dairy and eggs now account for over 8 percent of all dairy and egg sales. Milk and cream sales were up almost 5 percent to $4.2 billion, and the organic dairy alternative category grew almost 14 percent in 2023 to around $700 million.

    The rate of growth in the sales of the organic non-food categories was mixed. Personal care products saw the strongest growth in 2023 with sales reaching $1.3 billion up almost 7 percent, and sales of organic supplements were up over 4 percent to $2.1 billion. Organic fiber continues to be the largest segment of the U.S. organic non-food products, representing 40 percent of the category’s sales in 2023 of around $2.4 billion. Sales for organic fiber were essentially flat year-over-year, not due to lack of buyer interest but restricted more by supply chain issues.

    Organic remains a stand-out in a growing sea of labels 

    The number of claims and labels continued to expand in the retail aisles in 2023, but the organic seal stayed a stand-out with consumers. A growing consumer focus on personal and family health, sustainability, and a desire for clean products free from antibiotics, hormones, preservatives, and dyes kept shoppers turning to organic. More consumers are aware of the potential health benefits associated with organic foods, and many consumers, especially the Gen Z generation, are increasingly conscious of the ethical implications of their food choices and are looking for products that align with their values, such as animal welfare, fair trade, and support for organic farmers.

    Research is showing a consistent and growing interest in organic from Millennials and Gen Z. These generations grew up with organic and sustainability, and the health of people and planet, are all top-of-mind for these consumers. Industry experts see this as an opportunity for organic, with the sector well positioned to meet the product attributes and values sought by consumers today and for future generations. By 2030, the U.S. population will consist of a majority driven by Millennial, Gen Z and younger generations.

    But the future for organic is not without its challenges. The latest term adding confusion to the marketplace is “regenerative.” While regenerative labels are not necessarily top of mind for consumers yet, the attributes they claim to represent include soil health, animal and human welfare, and biodiversity — attributes already embodied by the USDA Organic seal. As new certifications develop around regenerative agriculture, there is concern of consumer confusion, making it all the more important to elevate organic education.

    Methodology 

    This year’s survey was conducted early in 2024 and was produced on behalf of the Organic Trade Association by Nutrition Business Journal (NBJ). Numerous data sources were compiled to create as complete a picture as possible of the organic industry which consists largely of private companies. Inputs include but are not limited to point-of-sale data, expert interviews, annual report data, and in-depth direct survey data. Roughly 65 companies completed a significant portion of the in-depth survey.

    In an effort to better represent how products are marketed within the grocery aisles, newly arranged organic product categories are being presented in the 2024 report. Shelf stable and fresh products that have traditionally been part of the packaged and prepared foods, breads and grains, and condiments category are now largely part of the new grocery category. Fresh produce, the largest organic subcategory, is now a full-fledged category of its own, as frozen and canned produce is now in the grocery category.

    Executive summaries of the survey are available to the media upon request. The full report can be purchased; online orders can be placed on this page.

    The 2024 OTA Organic Industry Survey is available in full as a benefit to association members.

    About the Organic Trade Association

    The Organic Trade Association (OTA) is the membership-based business association for organic agriculture and products in North America. OTA is the leading voice for the organic trade in the United States, representing more than 500 organic businesses across 50 states and 9,500 farmers through its Farmers Advisory Council. Its members include growers, shippers, processors, certifiers, farmers’ associations, distributors, importers, exporters, consultants, retailers and others. OTA’s Board of Directors is democratically elected by its members. OTA’s mission is to promote and protect ORGANIC with a unifying voice that serves and engages its diverse members from farm to marketplace.

  • NorCal Dairy Tour Provides Beef/Dairy Nutrition and Sustainability Insights

    If you think school lunch begins in the cafeteria, you’d be mistaken. It starts back at its nutritional roots…on the farm. Recently, the California Beef Council (CBC), in partnership with the Dairy Council of California, took 55 future healthcare professionals, students, educators, and school nutrition professionals to DeSnayer Dairy in Lodi, California to learn about and see firsthand the critical role dairy farms play in sustainable agriculture and supporting school nutrition programs.

    “We chose DeSnayer Dairy Farm for this tour because they operate sustainably, with practices that optimize resource use and reduce environmental impact,” said Kori Dover, the CBC’s Director of Food & Nutrition Outreach. “Attendees were able to engage with firsthand experiences and demonstrations that showcased the interconnectedness of food production, consumption, and sustainability.”

    Participants gained insights into the lifecycle of dairy production from feed management to milking, and learned how the dairy industry contributes to the beef supply chain. Most importantly, the group gained a deeper understanding of how these two agricultural sectors-beef and dairy-contribute to providing nutritious food options for school programs and consumers.

    “Tours like this help foster an open dialogue about production practices,” Dover said. “They go a long way toward dispelling myths, clarifying common misconceptions, and building trust. Our goal with events like these is to develop and nurture strong connections between agricultural sectors and educational entities.”

    So, how are these two agricultural sectors connected? Beef and dairy-both top agricultural commodities in California-are nutrient-dense foods that provide high-quality protein and other essential nutrients necessary at all stages of life. In addition, dairy cattle are a significant part of the U.S. beef supply, contributing between 18% and 24% to the total U.S. beef supply since 2002. This contribution equates to a larger amount of choice and prime cuts for consumers.

    “Open dialogue about dairy and beef cattle farming and production practices goes a long way toward building trust between our beef and dairy producers, and educational stakeholders,” Dover said. “It’s an important partnership with significant benefits for all concerned.”

    For more information about food and nutrition outreach programs, contact Kori Dover at kori@calbeef.org. For more information on the CBC, visit calbeef.org.

    About the California Beef Council

    The California Beef Council (CBC) was established in 1954 to serve as the promotion, research, and education arm of the California beef industry, and is mandated by the California Food and Agricultural Code. The CBC’s mission is to amplify the voice of the California beef industry to strengthen beef demand through innovative promotions, research, and open communication. For more information, visit calbeef.org.

    About the Beef Checkoff

    The Beef Checkoff Program was established as part of the 1985 Farm Bill. The checkoff assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States may retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen’s Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval.

    About the Dairy Council of California

    Dairy Council of California is a nutrition organization overseen by the California Department of Food and Agriculture. Funded by California’s dairy farm families and milk processors, we are the dairy community’s philanthropic contribution to community health, positively impacting countless lives advancing milk and dairy’s unique and essential contributions to healthy, sustainable eating patterns.

    Dairy Council of California also works to secure grant funding for community nutrition projects. We value collaboration and partner with organizations with shared values to extend our collective impact through collaboration and co-creation. For more information, visit dairycouncilofca.org.

  • $5.87 Million Awarded To Dairy Businesses In California And Other Western States

    $5.87 million in grants have been awarded to dairy processors along the Pacific Coast, strengthening the region’s food systems. The Pacific Coast Coalition – Dairy Business Innovation Initiative (PCC-DBII), hosted by California State University, Fresno, has named 28 winners across California, Oregon, Washington, Nevada and New Mexico. While all grants are pivotal to the sustainability and longevity of each respective business, Rosa Brothers Milk Company (Hanford, CA) was awarded almost $1 million for the purchasing of ice cream equipment to meet demands, produce novelty items, provide healthier alternatives and expand into the pet food market with Greek-style frozen yogurt pet treats. Grants of $500,000 were given to Pacific Cheese Co. (Reno, NV) for an upgraded cheese cuber that will almost triple production in a growing market, Petit Pot (Emeryville, CA) for launching a more affordable paper cup 2-pack without compromising on quality, and CheeseBits (Riverbank, CA) for reducing COGS through automation, adding jobs and expanding into new markets. With $4.78 million going towards equipment-related investments, all grants support the economics of innovation in the dairy industry.

    Grouped by state, grant awardees include:

    California

    Oregon

    Washington

    Nevada 

    New Mexico
    Camino de Paz (Santa Cruz)

    “Each grant awardee embodies the passion and initiative to build a stronger dairy presence on the West Coast, and to forge bonds between food producers/processors and consumers,  said PCC-DBII Project Director Carmen Licon Cano, Ph.D. “Recipients range from adding a creamery location where people can watch cheese being made on a small scale to transitioning a production line with automation, allowing employees to free up for other important tasks, like creating new value-added dairy products.  All projects are exciting, allowing dairy processors to make nutritious, delicious dairy products available locally, regionally, nationally, and internationally.”

    Grant winners’ intentions range from upgrading equipment, streamlining processes, optimizing packaging, adding more jobs, developing new products, and generating new market growth. From first-generation businesses to multi-generational legacies, these grants support the future of the dairy industry and the strength of our nation’s food systems.

    Dairy processing businesses and farmsteads throughout the West Coast are actively investing grant funds to catalyze change via their product offerings, production efficiencies, job retention/growth, and market expansion.  Dr. Susan Pheasant, Director of the Institute for Food and Agriculture and the “cowkeeper” for the PCC-DBII commented “We are thrilled to work with each of these businesses and honored to steward the USDA AMS dairy innovation funding for product development, business resiliency, access to high-quality food nutrition, and the rebuilding of communities.

    About the Pacific Coast Coalition

    Dairy Business Innovation Initiative is funded through the USDA Agricultural Marketing Service and hosted by California State University, Fresno. The initiative is in collaboration with Cal Poly Humboldt, Cal Poly San Luis Obispo, Chapman University, Chico State, Oregon State University, Oregon Dairy and Nutrition Council, UC Davis, Washington State University, New Mexico State University and the California Dairy Innovation Center. This is the fourth round of grant funding through the PCC-DBII. Via four rounds of funding, PCC-DBII has made nearly $10.7 million in grants from the USDA AMS available to regional dairy businesses for innovation-related investments, helping dairy processors evolve their operations and adopt more sustainable practices. For more information on the PCC-DBII and available resources, please visit their website at https://www.dairypcc.net/

  • New Report on Intersection of SGMA and Cover Crop Water Use in California’s Central Valley

    A multi-disciplinary authorship group of over 30 individuals has published a report comprised of literature review, policy analysis, and recommendations pertaining to the water impacts of cover crop practices in California’s Central Valley under the Sustainable Groundwater Management Act (SGMA).

    The report, entitled “Cover Cropping in the SGMA Era,” is the product of a convening process jointly developed by the California Association of Resource Conservation Districts (CARCD), California Department of Food and Agriculture (CDFA), Natural Resources Conservation Service of California (NRCS-CA), and University of California Agriculture and Natural Resources (UC ANR) and assembled by Sustainable Conservation.

    Cover Crops and their Potential

    Cover crops are non-income generating crops that are used to protect and improve the soil between regular annual crop production (such as tomatoes), or between rows of perennial tree and vine crops. The benefits of cover cropping include improved pollinator habitat, infiltration, water storage, carbon capture, and soil health, as well as decreased runoff and erosion – all vital factors in California’s changing agricultural context. These potential benefits are especially salient in the San Joaquin Valley (SJV), where groundwater challenges are more acute. Thus, this report evaluates the water implications of cover cropping practices to lay the groundwork for their adoption in the context of SGMA.

    Report Findings and Recommendations

    To understand the potential of cover cropping under SGMA, the report’s authors came together to answer the following questions:

    1. What are the impacts of cover crops on water cycles (both benefits and use) for California farms?
    2. How does SGMA management account for cover cropping and is it capturing cover crop benefits alongside their water use?
    3. How can we ensure that this practice remains available to growers where and when it makes sense?

    This report synthesizes the learnings from the collaborative initiative including 100+ multidisciplinary experts, a policy analysis, interviews with Groundwater Sustainability Agency (GSA) staff and consultants, and the expertise contributed by its 30+ authors. In light of these findings, the report advances a series of recommendations aimed at bridging critical knowledge gaps, enhancing the integration of cover crops into policies and incentive programs, and bolstering data infrastructure and other mechanisms to support sustainable groundwater management initiatives. One vital throughline is the need for additional guidance from the state to support local GSAs in facing the complex challenges of developing and implementing groundwater management strategies for their local watersheds. These measures aim to maximize the water benefits of cover crops within SGMA frameworks and promote sustainable water management practices crucial for the region’s agricultural resilience and environmental health.

    Side-by-side of Donny Hick’s almond orchard without (left) and with (right) cover crops after a big rain event

    Testimonials

    “Cover crops are one of the most popular practices we see farmers employ through our Healthy Soils Program,” said Karen Ross, Secretary of the CDFA. “Cover crops supply a host of benefits, such as helping to protect against soil erosion, improving soil health, crowding out weeds, controlling pests and diseases, and increasing biodiversity; and they can bring increased profitability as the number of other inputs are reduced. They also provide water benefits such as improved infiltration and reduced runoff. Yes, cover crops require a nominal amount of water to establish – and sometimes rainwater is sufficient — but the myriad co-benefits are worth it.”

    “This report is unique because the University collaborated closely with state agencies and private sector partners to ensure that the different perspectives provided both the best science available as well as viable policy options,” said Glenda Humiston, University of California Vice President for Agriculture and Natural Resources (UC ANR). “By taking a comprehensive view, we can advance recommendations for cover crop policy that help us meet multiple goals, manage our natural resources more effectively, and avoid unintended consequences.”

    “Cover crops are a valuable soil health practice that can help ensure the resilience of California farms to climate extremes,” said Sarah Light, UC Cooperative Extension Agronomy Farm Advisor. “As we balance the complexities of water and soil management, it is important to understand the role that cover crops play in an annual water budget so that they are not disincentivized in certain parts of the state. UC ANR expert participants provided science-based information during the convening sessions and co-authored the white paper. This paper can provide guidance to GSAs and policy makers who are charged with implementing SGMA in their regions.”

    View the Executive Summary

    View the Full Report