California's Wine Exports Reach Record-Breaking Levels

Of the various foods that California produces for export, many have faced hard times over the past couple of years, mainly due to the scarcity of water throughout the state. Almonds, California's largest export, grow on trees that require gallons of water to grow properly. Those almond trees have suffered over the past couple of years, and, even though rainfall has increased, the trees may not recover, at least not any time soon. Fortunately, even though the almond market has hit rough times, other exports from California have reached record levels. In his L.A. Times article, Geoffrey Moan discusses increased exports of American wines in 2016, led by California's brands.

Even with the increased strength of the dollar, a limited water supply, and high tariffs, which all had limiting effects on the wine exports, foreign trade revenue still increased from $1.49 to $1.62 billion in 2016. Of all of the wine exported from the United States, around 90% came from California. Not only did the volume of wine increase, so too did the prices of those wines. Golden State labels have gained higher prestige in foreign markets, and vintners take advantage of that "premiumization" to mark up the wines. It seems to be a good business strategy that hasn't negatively impacted demand while still increasing revenue.

The single country that imported the largest amount of U.S. wine was Canada, accounting for $431 million in table wines. Behind them came Germany and Britain who, along with the rest of the countries in the European Union, imported a total of $685 million in American wines. Behind them came Mexico, Switzerland, and several Asian countries, who collectively accounted for the remaining portions of U.S. wine export revenue. Wine exporters have faced some difficulties with laws in British Columbia and other areas that prevent retailers from carrying foreign wine brands, but exports have still increased despite such restrictions.

Exporters throughout the U.S. expect that the demand will continue increasing, so limits on foreign retailers could pose future issues. While some exporters are working with foreign governments to try to gain equal access to their markets, other exporters make "trade tours" through the countries that import the most product, to renew their relationships and remind importers of their company's commitment to the wine market. While American wines have plenty of domestic demand, which is why the wine industry depends much less on exports than other industries, vintners are focusing on foreign markets mainly because they represent the best opportunity for fast growth. Their work right now will help to define their growth in the industry in years to come.

***************************************************************************************************
Find out more about us at www.sepulvedaescrow.net. Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.

***************************************************************************************************

U.S. Takes Second Place in World Oil Reserves

The top oil-producing countries in the world are Russia, Saudi Arabia, Canada, and the United States. A few short years ago, the US was dead last in that hierarchy based on estimates of total recoverable oil throughout each country. As shown in Rob Nikolewski's L.A. Times article, a recent study by Rystad Energy has shown that the United States has beaten out some of its former competition, taking second place behind Canada as one of the world's top oil producers.

The amount of "recoverable oil reserves" is calculated based on how much of a country's oil is both technologically and economically feasible to extract. In other words, if it is too deep to get out or will cost more money to mine than can be earned in the market, then it isn't calculated in the country's total reserves. Leaders in the oil industry have determined that the United States' improved position in the market is likely due to technological advancements, especially those that enable the procurement of shale oil.

Shale oil is a type of oil found in some sedimentary rocks that can be extracted pressurized drilling. It is a type of oil that was previously ignored or not considered useful because it was harder to extract. However, since much of the "easier to access" oil has been extracted and used up over decades of drilling, the technology advanced to keep up with demand. Additionally, other forms of drilling technology, such as hydraulic fracturing, or "fracking," which involves the pumping of pressurized fluid into otherwise-empty oil well in order to force any remaining oil out have added to US reserves. Texas by itself has over 60 billion barrels worth of shale oil, an amount comparable to the total oil reserves in the entire country of Mexico.

The Rystad study concluded that there are approximately 2.1 trillion barrels of oil globally, from over 60,000 oil wells. Over half of the reserves in the US are shale oil deposits, which, since they are more difficult to extract, can incur extra costs. Right now, oil prices are very low, which might seem like a good thing to the average consumer. However, when prices stay low for too long, producers can;t extract more oil in an economical manner, which reduces the total amount in the market, which can cause prices to shoot up.

According to one economist, if oil prices stay below $50 per barrel, miners will not put in the investment to tap shale oil reserves. If prices get closer to $100, he predicts that the US will provide a significant portion of the oil market over the next few years. So, even though the US has plenty of oil deposits in Texas, California, South Dakota, and Alaska, and technology can help the mining along, prices will have to go up in the short-term in order to keep gasoline prices steady in future years.

***************************************************************************************************
Find out more about us at www.sepulvedaescrow.net. Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.

***************************************************************************************************