Chile's earthquake could hurt local ag companies
| Monday, Mar 01 2010 04:13 PM
Last Updated Monday, Mar 01 2010 04:13 PM
U.S.-Chile Trade Facts
* U.S. goods and services traded with Chile totaled $20.2 billion in 2008, according to the Office of the United States Trade Representative.
* U.S. exports of agricultural products to Chile totaled $455 million in 2008. The largest categories were: wheat ($132 million), feeds and fodders, excluding pet foods ($75 million), and coarse grains ($51 million).
* U.S. imports of agricultural products from Chile totaled $2 billion in 2008, making it the nation's 11th largest supplier of ag imports. The largest categories were: fresh fruit ($1.2 billion), wine and beer ($224 million), processed fruit and vegetables ($175 million), and planting seeds ($166 million).
* Grapes were Kern County's second largest commodity in 2008, valued at $561.5 million, according to the Kern County Crop Report.
Saturday's magnitude 8.8 earthquake in Chile comes at the peak of harvest season for Chilean agriculture, and could possibly hurt companies in the region that are part of the Chilean import chain.
The United States imported about $2 billion worth of agricultural products from Chile in 2008, according to federal trade officials. Much of that passes through Kern County companies involved in cold storage, sales and distribution work.
One of them is Delano-based Pandol Brothers, which is a sales agent for Chilean produce.
"This is the equivalent of if our harvest was delayed for three days in September," said John Pandol.
From a consumer standpoint, there shouldn't be any immediate ramifications, but there could be a small surge in prices in a couple of weeks, he said.
"Where you would normally have seen grapes on sale at the supermarket, maybe 99 cents a pound, those specials will be gone and you'll see the normal prices, $2 to $3 a pound," Pandol said.
On the upside, there may be more demand for produce grown by local competitors, Pandol added.
"The apple kiwi fruit area is closest to the earthquake zone," he said. "So maybe in October there will be some opportunities for our kiwi fruit."
It's hard to predict the degree of impact because damage assessments in Chile are still underway, said Barry Bedwell, president of the California Grape & Tree Fruit League.
"There is a potential for disruption of supplies of fruits and vegetables in about 10 days," Bedwell said. "You won't see any problems now because there were ships en route already before the earthquake, so those deliveries still will be coming in."
Lovell "Tu" Jarvis, a professor of agricultural and resource economics at UC Davis, flew to Santiago after the earthquake to get a firsthand look at the condition of an important trading partner.
In an e-mail Monday, he said he didn't think the earthquake would greatly affect Chile's agricultural production.
"Ports are somewhat damaged, but not enough to seriously stop trade, or at least that is my first impression," he wrote.
