California. Wineries seeking opportunity in China market

Aug. 01--San Joaquin County exported $2 billion of goods in 2008, which generated more than 18,000 jobs.

That's a good base to build on, the Brookings Institution said last week.

The nation's 100 largest metropolitan areas, of which San Joaquin County is one, together account for more than 64 percent of the nation's exports.

Why that's important, Brookings experts said in a report called "Export Nation," is that the U.S. economy struggles against substantial structural weaknesses: middle- and lower-income wage stagnation; a lack of opportunities for people without college degrees; and a speculativebubble- inducing trade deficit.

Dramatically increasing exports would improve each of those conditions, said Bruce Katz, a Brookings vice president and director of the Metropolitan Policy Program.

"If we grow our exports, we could have a job-filled recovery," he said.

"If we grow our exports, we could raise the standard of living, because exports tend to pay higher wages and decent benefits. If we grow our exports, we can meet the rising demand coming out of countries like Brazil, India and China."

While agriculture, San Joaquin County's leading export sector, paid a relatively low average wage of more than $27,000 in 2008, exports still accounted for a substantial -- nearly 9 percent -- share of the gross metropolitan product.

Export volumes have been rising at the Port of Stockton in recent years.

Since Jan. 1, the port has seen departing shipments of nearly 135,000 metric tons of dry bulk sulfur, more than 113,000 metric tons of bagged rice and 60,000 metric tons of unmilled rice, Port Director Richard Aschieris said. That's roughly 30 percent of the Stockton port's total volume, up from roughly 20 percent share of the export trade a few years ago. "Our port marketing efforts are highly focused on export markets right now and export opportunities," he said.

And while the port has historically handled only bulk cargoes, such as sulfur, rice, dry and liquid fertilizers, steel, cement, lumber and petroleum, it recently received a federal grant to develop container-handling capabilities.

The intent is to create a so-called marine highway, where cargo containers would be loaded on barges in Stockton and towed to Oakland for loading onto ocean freighters, instead of using trucks to haul the containers

by freeway.

"Our marketing people are already spending a lot of time educating the Central Valley on not only what our capabilities are today but what they will be in the future," Aschieris said.

Export markets are already a vital outlet for California walnuts, one of San Joaquin County's leading cash crops and exports, which also include almonds, cherries and wine. The walnut industry ships roughly half of its crop overseas every year, said Pete Turner, chairman of the California Independent Handlers Coalition, a walnut wholesalers group.

With the coalition looking for a record-shattering crop of 473,000 tons this fall, walnut growers and shippers count heavily on sales to China, Turkey, Europe, Korea and Japan.

"It would be a disaster if we didn't have those markets," Turner said.

The Brookings Institution expects future growth in exports to come primarily from large, emerging markets, especially Brazil, India and China.

San Joaquin County winemakers and winegrape growers will certainly find opportunities in the growing middle class of those emerging markets, said Stuart Spencer, program manager for the Lodi-Woodbridge Winegrape Commission.

"As they develop a taste for luxury products of the West, wine fits right in," he said.

The Lodi grape-growing district, which is generally northern San Joaquin and southern Sacramento counties, leads the state in production of top grape varietals, including chardonnay, cabernet sauvignon and zinfandel.

"With the amount and volume of grapes ... and wine we produce here in Lodi, it's in our interest to look at these developing opportunities," Spencer said.

While giants such as E&J Gallo and Constellation Brands already produce wines from area grapes and ship them worldwide, some of the newer, small- to midsize wineries in San Joaquin County are beginning to push export sales. Among those, Spencer said, are the Van Ruiten Family Winery, LangeTwins and Michael-David.

"It is the future, and they're starting to lay the groundwork for future opportunities and growth," Spencer said.

But success isn't necessarily assured, he added. "The challenge is it takes a very long time commitment ... to develop those markets."

Rodney Schatz, a longtime area grape grower and the owner of Peltier Station winery in Acampo, is one taking on the challenge.

"We're just about ready to ship our first shipment to Shanghai," he said last week.

That comes after two earlier shipments to Hong Kong.

While there are difficulties in entering export markets, it's even harder for a small winery to win entry to U.S. markets, due to consolidation at both the retail and distribution levels, he said.

"It's the large wineries that have the control of those markets," Schatz said. "That's why I want to send something to China; because I can get in there. It something I have a little opportunity at."

Contact reporter Reed Fujii at (209) 546-8253 or rfujii@ recordnet.com. Visit his blog at recordnet.com/fujiiblog.