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California dreamin' faces economic realityCalifornia may be the land of milk and honey, but the cows and bees are a bit shaky right now. That's my observation after four days of touring farms and talking to growers from Sacramento to Fresno. It was a great experience, and although California farming is under intense economic, regulatory and population pressure, the people of the land have the same values and determination as those of the Plains or Midwest. The only thing cheap in California agriculture is the water. The farmers openly talk of the very low cost of their annual allotment of 4 acre feet (48 inches) that comes in from the Sierra Mountains through dams and canals that were built by farmer led water districts over 100 years ago. The water is now desired by the urban population in the huge coastal cities who are now moving into the central valleys where agriculture has flourished. The price of land is shocking by any standard with the lowest prices from $5,000 to $15,000 for bare ground and over $25,000 for land growing a permanent crop such as almonds or grapes. The developers are paying $125,000 or more for the same land to build houses. Agriculture still remains the lowest valued use regardless of its location. The livestock farmers in California have the greatest challenge as every drop of water is monitored and the dairies have become a closed system as the water is recycled and the manure is dried, composted and used as fertilizer and bedding. The cost of operation is high and every operator brought up the recently elevated corn price as a major problem in maintaining their herds. Indications are that corn will be planted on every marginal acre with almost all of it going to silage production. Even though most operations are quite large--500 cows is a small farm--the economy of scale is a delicate balance with an unsure supply of workers, high costs for all feed inputs and strong regulatory monitoring. The alternative is to sell the land and move to another state. A dairyman said that there were 14 states with booths at the Tulare Farm Show this year. All were recruiting dairies and many have been successful. We toured a large cheese plant that will soon start up operations in Dalhart, Texas. Water quality compliance, political scandal and intense media attention have taken their toll. The crop farmers have the world's greatest microclimates and produce over 350 crops in Fresno County alone. The tree fruits go from nuts and citrus to peaches. Ground crops are now being planted, such as sweet potatoes, melons, squash and leafy vegetables. Input costs are in the thousands of dollars per acre without a government safety net but with the potential for a good profit if labor, technology and demand merge at the right place and time. Hand labor has allowed these growers to produce crops like peaches and vegetables but the U.S. immigration policy, or lack thereof, is causing many to move toward mechanization. Almonds are the crop that is increasing most. (Pronounced "Amonds" by the growers with the joke that they are "Almonds" on the trees, but "Amonds" on the ground because they have to shake the "L" out of them.) Almonds can be almost totally mechanized with drip irrigation, mechanical shakers and harvesters. Currently they fetch an excellent price with potential profit of several thousand dollars per acre. One farmer, who was increasing his almond acreage, said: "Give us an up market and we'll grow a large enough crop to destroy it." Some human characteristics seem to be universal. Our last stop provided examples of the hope and determination of the new generation of California agriculture. Fresno State University once sat in an unpopulated interior valley surrounded by a ring of mountains. It now is a city of 800,000 with the campus and its fields hemmed in by a ring of houses. The land is intensively farmed with crops from grapes to pistachios and summer harvests of sweet corn and other vegetables. A degree can be obtained in enology (wine making) and students in all areas of specialization are in strong demand according to their professors. The school emphasizes retail value in all production courses. Olives are now crushed and the "Extra Virgin Olive Oil" carries the bulldog logo of Fresno State University and sells for $14.95 per pint. The wine is of similar value. Even the sweet corn goes for a premium as it is brought to the very popular university farmer's market and sold to the new residents who have migrated there looking for affordable housing and quality of life. To achieve these goals, they now drive as far as 75 miles each way to jobs in the Bay Area. We met several farm and business families that are transitioning to a new generation. All express the hope that there is a future for farming in the fertile region and are willing to face uncertainty to keep their farms intact. The younger generation is sensitive to the requirements of government and eager to try new technologies to produce food for an affluent, if not always appreciative, public. Editor's note: Thanks to the California Farm Bureau Federation and Nationwide Insurance for making this trip possible. They provided resources and guides. As usual, my opinions are my own. Ken Root is now celebrating his 34th year as an agricultural professional. His career began as a vocational agriculture teacher then turned to agricultural broadcasting and writing as well as environmental consulting and association management. He was the original host of AgriTalk (1994-2001) and now is lead farm broadcaster for WHO Radio in Des Moines, Iowa. B 8 3/26/07 1 Star WK Date: 3/22/07
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