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- Summer 1996 "Update" Newsletter Article -
News service report projects losses
From CATI Publication #960701
Copyright © 1996. All rights reserved.
Market news reports that help agricultural businesses track sales and shipping figures for their products may be in short supply soon.
Because of budgetary constraints, the California Department of Food and Agriculture (CDFA) has substantially reduced its financial support to the Federal State Market News Service (FSMNS). The service has operated in one form or another in California for more than 80 years, offering daily, weekly and monthly reports on the prices, sales and shipping volumes of most of California's major agricultural products.
With the CDFA dropping most of its $2 million in support to the service during the last two years, funding has been left almost entirely to the U.S. Department of Agriculture. If that source were to dry up too, California agribusiness could find itself losing millions of dollars annually because of lost sales opportunities, according to a research specialist with the California State University, Fresno's Center for Agricultural Business (CAB).
Agricultural economist and professor James Cothern recently completed an analysis projecting the economic effects of the loss of the FSMNS. According to figures produced in a computer-based analysis, it could be as much as $71 million a year to California's agribusiness industry and overall economy. The figure is arrived at by projecting export sales that would be lost to other suppliers from other states or countries.
Market news reports allow California producers, processors and shippers to keep abreast of the latest in pricing and shipping information and thus allow them to obtain the best prices for their products, Cothern explains in his report. Without that immediate information, marketing specialists would be at a disadvantage in bargaining.
While it is possible that other private entities could take over supplying market information, nothing is certain, and Cothern's report outlines what essentially would be a worst-case scenario for California agribusiness if the FSMNS were dropped completely.
More details of the FSMNS, and the methods used in calculating the direct and indirect losses, are contained in Cothern's report, entitled "Federal State Market News Service and the California Economy." The study was conducted at the request of the CDFA and with support from the California Agricultural Technology Institute. Copies are available and may be requested with the Publications available form on Page 7.
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CALIFORNIA AGRICULTURAL TECHNOLOGY INSTITUTE - CATI
College of Agricultural Sciences and Technology
California State University, Fresno