Lessons Learned for the Future by krj18645

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									Lessons Learned for the
        Future
           Ed Kee
    Secretary of Agriculture
      State of Delaware
Lessons Learned for the Future
“Those who cannot learn from the past are
condemned to repeat it.”
  George Santayana, 1906


This is not a sentimental journey, but
rather a business or industry case study
Agricultural Eras in Maryland
The Tobacco Coast
Breadbasket of the
Revolution
By 1900 –
  Southern Maryland:
  Tobacco
  Central Maryland: Dairying
  Eastern Shore: Vegetables
  Western Maryland:
  Dairying and Fruit
 Emergence of a Diversified Ag
         Economy
Grain, Dairy, Tobacco, Fruit and Vegetables
Emergence of a Market Driven Agriculture
Emergence of Technology
  1st Manufactured Fertilizer, 1849 in Baltimore
  Science and Technology
   • Maryland State College of Agriculture, 1856
   • USDA
Emergence of the Food Preservation Industry
  Canned Products
Emergence of the Poultry Industry
Broiler Industry –
1923, Ocean View,
Delaware
A Delmarva Industry

An amazing Industry
  $903 million industry
  Coupled with corn &
  soybeans = 75% of
  Maryland’s ag sales
   The Canning Industry:
     A Founding Pillar
of America’s Food Industry
  A Case Study for Maryland
           Baltimore
           Maryland
           Delaware
Focus on the Rise and
  Fall of an Industry


The Canned & Frozen
 Vegetable Industry


    Why it Grew?


  How Big Was It?


 Why did it Decline?
    It’s an Important Story
Economic History, and much more –
Capital, Land, & Labor
Immigration & Assimilation
Race and Ethnic Groups
Industrialization of Agriculture
Feeding the World
 1842 – 1st Canning in Baltimore – Oysters in Winter
Soon year round canning with Vegetables and Fruits in
                      Season
    Canning was a new, revolutionary technology
Oyster Buyer
& Skipper on
a Baltimore
Dock - 1886
         Why Baltimore?
1830 – 2nd Largest City in US – 80,000
people
Chesapeake
Farms Nearby
Railroad – B&O and the Baltimore,
Wilmington & Philadelphia
Civil War – great impetus
Labor - Immigration
 Today’s Discussion: Focus on
Parallels to Today’s Agricultural
            Economy
Industry created jobs
  1884: 56,000 jobs in Maryland
Enterprise Opportunity for Farmers
Why the industry grew and spread
Why it declined
  What public policy could have been
  implemented to keep it as a local industry
  Hindsight is 20/20
        Canneries in 1889
Location      Number   % of U.S.
United States 1,042        100
Maryland        387         37
  Baltimore     110         11
Delaware         49          5
New Jersey       74          7
Virginia        120         12
          Baltimore City
1876 – 14 Picklers & Preservers

1889 – 110 Canners & Packers

1919 – 45 Canners

1927 – 38 Canners
 Why did the industry grow?
Civil War stimulated demand
Railroads connected canners with
consumers (later highways)
Exploding urban populations
The region’s soil and climate conditions
excellent for many crops

The region was the Silicon Valley of the
Food Industry from 1830s to 1950s
       Baltimore Canners - 1894




Perhaps the Biggest Reason: Entrepreneurs
J.S. Ferran Packing Company – Baltimore – Cutting String Beans - 1910
1919 – 3228 Processors in U.S.
State        # Companies   % of U.S.
Delaware          71          2
Maryland         450         14
New Jersey        55         1.7
Virginia         584        18
  TOTALS        1160         36%
         Canneries in 1919
Delaware, Maryland, New Jersey
  585 Canneries
536 did tomatoes and/or ketchup
  93 %
289 did tomatoes and/or ketchup
exclusively
  49%
Cutting Corn for
  Canning in
  Baltimore –
     1930s
Phillips Packing Company – Cambridge,
                Maryland
   “World’s Largest Tomato Packer”
   Maryland Vegetable Processors

Year    # Firms # Plants   # Tomato    # Tomato     % Firms % Plants
                               Firms       Plants   Tomatoes Tomatoes
1927      392       430         328         363        84        84


1938      184       308         186         224       100        73


1959      123       144          77          86         63        60


1980       40       40           20          20        50         50


Today       3        3            0          0         --        --
What Happened Since 1945?
Chronic Overproduction
  Affect price
  Especially critical to small Companies
Competition from Grain crops
  Government safety net
  1970s grain boom
  Delmarva Poultry Industry
Labor Availability and Costs
  Farm and Factory Level
What Happened Since 1945?
“We can grow good crops in this area, but there
is always some other region that can grow a
particular crop a little better than we can.
Tomatoes in California, peas in Wisconsin,
sweet corn in the Pacific Northwest and so on.”
  Dr. Pete Twigg, University of Maryland

California – 30 tons/acre in 1975; Delmarva – 20
tons/acre

Speaks to Ag Research and Technology
What Happened Since1945?
Competition from other regions

California
  Our tax dollars paid for their irrigation
  Interstate Highway system gave the west
  access to eastern markets
  New Industry out there, more efficient
  operations
  Ultimate Example
 California Processed
  Tomato Industry –
  95% of Processed
 Tomatoes in the US!
  Maryland was the
  leader until 1924!
 Maryland, Delaware
   and NJ leader
      until1954
 California – based on
science and technology
 – plant genetics, plant
    physiology, and
 harvester engineering
 Coupled with perfect
       Climate
What Happened since 1945?
2000 issue was
resolved
Local, family owned
processors felt
threatened,
overwhelmed by new
environmental
regulations that
emerged in the 1960s
  What Happened Since 1945?
                Regulations-
Environmental Regulations-
“All of a sudden, what had been the lifeblood of the
  community became an eyesore.”
    Sylvia Jarboe Gannon, Easton/St. Michaels
       Harrison-
     • Harrison-Jarboe Canning Company
Other Issues
  Hesitancy to invest capital for production
  upgrades and waste water facilities
  Generational Transfer – Often the next
  generation had had enough
What Could Have Been Done?
                                advantage?
Did we squander our competitive advantage?
Ag Research & Technology
Public financed promotions
  Emphasize Maryland or our region in large markets
  Irony in buy local movement of today
Public investment in upgrades
  New Technologies
  Waste Water/Pollution Mitigating Technologies
Population within 8 hours drive
MD, VA, PA, DE, NJ, NY, NC, OH, WV,
DC
75 Million People, or 25% of US
 8,000,000 in NYC


How Do We Reach Them????
 Processing Acreage - 2003
Delaware       41,700
Maryland       13,900
New Jersey     10,900
Pennsylvania   10,550
Virginia        1,970
What Does a Viable Farming
   and Ag Industry Do!
Diversity – Farm Income
Preserves Land – Environmental Quality
Processing Adds Value – Partnership allows
many farmers to reach markets
Jobs, Economic Development
  5-7 multiplier effect
Stronger Ag Economy – Proves Agriculture is a
viable enterprise
Connect Farmers and Consumer on all levels
               Fundamentals
A prosperous Maryland (or Delaware) agriculture must
rely on exports
  To our population centers
  To the world
  Connection of farm to food processing, or
                                 ag-
  Perhaps Energy or some other ag-based output
Land
Farmers
  Expectation of Making a good living
Capital
Labor
Transportation costs that are manageable
Need farmers, Land, Technology, economically
viable plans in the private sector; good public
policy to support agriculture; and a common
resolve that agriculture is important!
Will We Squander
      This?




 Will We Lose Our
   Competitive
   Advantage?
               Thank You!!

A Founding Pillar of the Greatest Food Industry
in the World has moved elsewhere.
WHAT IS THE NEXT NEW AG INDUSTRY
MAINTAIN & ENHANCE OUR EXISTING
INDUSTRIES
Public Policy that gets it and enhances the
private sector
Hot, Flat & Crowded by Thomas Friedman
  We don’t want the sequel to be about agriculture!!

								
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