Posts Tagged: Korea
Listening and Learning
Last week I was fortunate enough to attend two excellent meetings that focused on different aspects of forest products and biomass utilization. The first was the Restoring the West Conference held at the Utah State University Campus in Logan. The conference was sub-titled “sustaining forests, woodlands and communities through biomass use” and covered a wide range of topics ranging from forest and range management to marketing and biomass utilization technologies. The focus was very much on pinyon-juniper ecosystems found throughout the inland west including areas in California (such as east of the Sierra Nevada and the north eastern part of the state).
It is great to visit other geographic areas outside of California as it helps to put our situation and challenges with respect to forest ecosystem restoration and the utilization of woody biomass in context. California is lucky that it still has a forest products industry infrastructure. There are still 23 operational sawmills in the state along with 30 operational biomass power plants, and 7 other primary processing facilities (including veneer, panelboard and wood shavings). It is easy to forget how fortunate we are that some industry continues to exist in California and gives land managers options for material disposal that are simply not available in the interior west. We are also lucky that we deal with a variety of tree species that means that we have a choice of utilization options from sawmilling down to compost and electricity generation.
Presentations from the conference were recorded and I believe they will be available online soon.
On Friday I headed to Anderson for a workshop organized by the California Licensed Foresters Association on California’s Forest Products Markets. There was a significant focus on the export markets for logs which is having a major impact on west coast saw log prices. Prices for log export at west coast ports (including Samoa and Oakland) range from $500-$1100 per MBF. The major historical markets were Japan and Korea which allow export of logs with the bark on. In the past couple of years China has become the major player and requires the bark to be removed from the logs. There was an interesting discussion on the different business practices of the alternative markets. It appears that the Chinese market can be very volatile compared to Japan and Korea. It was interesting to hear descriptions of the Chinese sawmills where the logs go – they typically consist of two bandmills, lots of workers and no other mechanization. It was questioned how it is possible for them to make money based on Chinese lumber prices versus the prices paid in the US for logs and the transportation costs. The presenters were excellent and also covered topics such as the state and Federal log export bans, Forest Service Stewardship Contracting, distribution centers, transportation systems, specialty markets, electrical markets and carbon. It was a full day and very informative.
Links:
California Licensed Foresters Association
Restoring the West Conference
UC economists project farm export gains from free trade agreements
Legislation implementing the Korea free trade agreement, along with smaller agreements with Colombia and Panama, were negotiated several years ago. They finally gained Congressional approval on Oct. 12 and are set to be signed by President Obama on Oct. 21.
By phasing out or eliminating tariffs and other trade barriers, free trade agreements create larger markets for California-produced farm commodities. Since South Korea has no significant prospects to export farm goods to the United States, California agriculture is a clear winner from this agreement.
Hyunok Lee and Daniel Sumner from the Department of Agricultural and Resource Economics at UC Davis and the UC Agricultural Issues Center document the current importance of South Korea to California farm exports, the size of the trade barriers these exports have faced (many facing tariffs of more than 30 percent) and the advantages currently afforded by South Korea’s existing free trade agreements with important competitors, such as Chile and Australia.
“Lower trade barriers will allow California agriculture to better compete in a large, growing and lucrative market,” said Sumner.
“Food product prices are high in South Korea and consumers are willing to pay premiums for the high-quality products produced in California,” added Lee.
South Korea has a strong economy with about 50 million consumers and per-capita income of $30,000, higher than many European countries. In 2010, the value of California farm exports to South Korea was more than $400 million. Given the size of South Korea’s economy and the high trade barriers being erased, Sumner and Lee say the accord will do more for farm exports than agreements negotiated for almost 20 years.
Among other findings, the authors report that:
- The top California ag exports to South Korea are fresh oranges, with tree nuts, rice, and beef and beef products also in the top five.
- Other California crops that hold a double-digit share of the South Korean market are hay, grape juice and kiwifruit.
- With an import tariff of about 45 percent, South Korean imports of California table grapes, fresh strawberries, fresh apples and lettuce and rice are small, but have great potential for growth.
- South Korea is becoming a major export market for California grapefruit and lemons. Lower tariffs will increase demand.
- The United States is South Korea’s only supplier for almonds and the U.S. has more than a 90 percent share of walnuts. The current 8 percent almond tariff will be eliminated and walnut tariffs will be phased out over the next 6 to 15 years.
- Beef products are the top agricultural import (from all sources) into South Korea by value. With the new agreement, the within-quota tariff will fall by 2.7 percent each year, providing a gain for U.S. producers compared to import competitors.
- South Korea has high trade barriers for many dairy products, but with gradual reductions under the new agreement, the market will grow.
MEDIA CONTACTS:
Daniel Sumner is available to comment on the free trade agreements with South Korea, Panama and Columbia. He can be reached at dasumner@ucdavis.edu, (530) 752-1668.
Hyunok Lee can comment about the size and potential growth of the Korean market. She can be reached at (530) 752-3508, hyunok@primal.ucdavis.edu.
Delegation of Korean farmers visits Kearney
A group of farmers from Tongyeong, South Korea, visited the UC Kearney Agricultural Research and Extension Center today to learn about the scope of research activities under way at the facility.
The visit was arranged by the City of Reedley, situated 4 miles east of Kearney. Reedley and Tongyeong are sister cities.
The visiting farmers produce a diversity of crops in South Korea, including citrus, strawberries, orchids, kiwis, mangos and figs. At Kearney, they toured the post harvest facility, research plots and the greenhouse. This afternoon and tomorrow they will visit local farms and packing houses.
The Korean farmers showed particular interest in UC's Navel and Valencia Export to Korea (NAVEK) program. In 2004, Korea rejected incoming citrus from California when inspectors detected fruit infected with Septoria spot, which is caused by a pest that has not been reported in Korea. UC scientists developed a fruit certification program to ensure that fruit with Septoria spot isn't shipped to Korea.
The Korean farmers' week long trip to the United States will not be all business. They plan to take time to visit the Grand Canyon National Park in Arizona and Las Vegas, Nev., according to their guide, Sonny Er.
Governor wants more trade with South Korea
California Governor Arnold Schwarzenegger, on a trade mission in Asia, signed an agreement with South Korea yesterday to increase collaboration on trade and technology, according to a San Francisco Chronicle column by Andrew S. Ross. Today the governor was scheduled to call for ratification of the U.S.-South Korea Free Trade Agreement.
The state's current trade relationship with South Korea includes exports of $500 million in California agricultural products - beef, rice, nuts, oranges. UC Agricultural Issues Center, Dan Sumner, told Ross South Korea is an ideal export market for the state.