USDA Climate-Smart Agriculture Projects Now top $3 Billion

By Scott McFetridge, Associated Press

The federal government on Monday announced another $325 million for agricultural projects that are intended to reduce greenhouse gas emissions.

The latest list of 71 recipients for the U.S. Department of Agriculture’s Climate-Smart Commodities program primarily involve small and underserved farmers and ranchers. The payments follow $2.8 billion awarded in September to 70 projects, mostly larger-scale efforts backed by universities, businesses and agricultural groups.

USDA Secretary Tom Vilsack announced the latest round of funding at Tuskegee University, a historically Black college in Alabama, saying it’s vital that small operations benefit from the program.

“It’s important that we send a message that it’s not about the size of your operation, that you don’t only benefit from the programs like this if you’re a large-scale producer,” Vilsack told The Associated Press. “If you’re a producer that historically has not been able to participate fully and completely in programs at USDA, that this program is going to be different.”

The goal of the program is to use financial incentives to expand markets for producers who implement practices that reduce greenhouse gas emissions. More than 1,000 proposals have been submitted to the USDA to participate in the program.

The underserved farmers and ranchers who would benefit from the latest funding are those who are beginners, from socially disadvantaged communities, veterans and those with limited financial resources.

The projects announced Monday, with funding ranging from $250,000 to $4.9 million, include:

— $4.9 million to promote urban, mainly Black, farmers who grow and market crops in Alabama, Louisiana, Michigan, Mississippi and South Carolina.

— $4.9 million to help small and socially disadvantaged farmers in San Diego County, California, by improving soil health through applying compost, reducing tillage of the land and growing trees and shrubs.

— $3 million to help farmers in over 60 Texas counties adopt practices such as regenerative agriculture, which builds healthy soil that is more resistant to drought and heat.

— $4.9 million to help farmers in 10 states and on tribal land grow barley on land using regenerative practices and to pay a premium for crops from those farms.

Agriculture causes an estimated 11% of the nation’s climate-warming emissions, and President Joe Biden has set a goal of cutting greenhouse gas emissions by half in the U.S. by 2030.

Timothy Searchinger, a senor research scholar at Princeton University’s Center for Policy Research on Energy and the Environment, said he welcomes the surge in federal spending to learn how to reduce agricultural emissions and implement practices. However, even as those ideas are tried out in dozens of spots around the country, it still will take years to study the results and replicate what works.

“There are lots of promising ideas, but they are generally not in broad use,” Searchinger said. “There are lots of good ideas about what you can do but they haven’t been proven out.”

After the climate-smart money is awarded, Vilsack said there would be a concerted effort to monitor what programs succeeded and those that struggled so the efforts could be replicated elsewhere in the U.S. and other parts of the world.

“We think this is an effort to really unify this effort on climate, not make it a divisive approach but one that unifies American agriculture and forest landowners and a concerted effort to improve income opportunities, to reduce greenhouse gas emissions, to store carbon, to create healthier soils and clean water,” Vilsack said.

California Ag Today2022-12-13T16:12:49-08:00December 13th, 2022|

USDA Offering Whole-Farm Revenue Protection

Risk Management Agency Offers Virtual and In- Person “Roadshow” Workshops About Improvements to the Whole-Farm Revenue Protection and Micro Farm Insurance Options

USDA is offering a virtual workshop on Dec. 13 for agricultural producers and stakeholders to learn about the latest updates and improvements to the Whole-Farm Revenue Protection (WFRP) and the Micro Farm insurance options. WFRP and Micro Farm are two of the most comprehensive risk management options available. These insurance options are especially important to specialty crop, organic, urban and direct market producers. Both programs serve as safety nets for all commodities on a farm under one policy and are available in all counties nationwide. The roadshow workshops are part of RMA’s broader efforts to increase participation in crop insurance and educate producers about policy improvements.

Improvements include:

Doubling the maximum insurable revenue under WFRP, now up to $17 million
More than tripling the size of farm operations eligible for Micro Farm to $350,000 in approved revenue
Reducing paperwork requirements for WFRP

Virtual Roadshow Workshop:

The virtual workshop will take place via Microsoft Teams events. RSVP is not required. Attendees will have a chance to submit written questions during the virtual event.

Virtual Roadshow Workshop:

December 13, 2022, 11:00 a.m. ET
Virtual: Join the roadshow meeting

California Ag Today2022-12-12T11:13:30-08:00December 12th, 2022|

Many Growers Are in Great Farming Frustration

Almond Grower said the Situation is Tight

By Patrick Cavanaugh with the AgInformation Network

Zach Fowler is a CEO and Director of Asset Management for Fowler Brothers Farming, based in Waterford. He comments on this growing frustration for almond growers.

“We’re seeing a lot of frustration just with the prices, water regulations, and everything like that. People are very frustrated. They’re just keeping their heads down. But I mean, it’s just… really tightening down on people on what they’re spending and what they’re doing coming up, and whether they’re redeveloping ground or just holding tight on what they can do,” said Fowler.

And Fowler said one of the big troublesome areas is the price of almonds.

“It’s pretty low. It’s an all-time low right now,” Fowler said.

We asked Fowler about those prices. “I know we did see in-shell prices for Nonpareil, around two dollars a pound. And it’s low on all varieties like Independence, you’re looking, like a dollar fifty-five. It’s really low,” he said.

We asked Fowler what he thinks about the near and long-term future of ag, especially with the drought issues

“It’s going to be really tough. If we don’t see any water, it’s going to get tight. And it was tight this year, but I don’t think we saw anything yet compared to what it could be this next season. If we don’t get water and get these reservoirs full and get a good snowpack, which is most important, then we will be in deep trouble as farmers,” noted Fowler.

People commonly think, oh, we just need a lot of rain. Well, we need that snow up in the hills, too, because that’s what gives us our long-term storage.

Yeah, oftentimes the rainfall in the mountains just soaks into the ground. It never makes it down to the valley.

“Exactly. That takes years and years to do that,” said Fowler.

California Ag Today2022-12-05T08:32:47-08:00December 5th, 2022|

Thanks California Farmers!

By Patrick Cavanaugh, Contributing Editor

It’s morning, and as the sun rises over the Sierra Mountains, the California farmer rouses early to plan the day and greet his or her employees alongside their pickup trucks.

Side-by-side, they

Walk the orchards of almonds, walnuts or pistachios;
Peruse the groves of citrus, peaches, plums, and nectarines;
Inspect the vineyards of table, raisin or wine grapes;
Survey the fields of lettuce, spinach, broccoli, celery or strawberries;
Raise forage to feed their healthy dairy cows.

We are grateful for the dedication of the California farmer:

Who may also be a rancher or dairyman.

Who takes NO days off from caring for their livestock and poultry.

Who follows the legacy of prior generations on the family farm.

Who contributes to our nation’s security by providing abundant, nutritious, and safe homegrown food to eat.

We are grateful for the lawful vigilance of the California farmer:

Who checks their email for newly registered crop protection materials to prevent pests and diseases from destroying her crops.

Who adapts to ever-changing, complicated and costly regulations.

We are grateful for the responsible “buck-stops-here” accountability of the California farmer:

Who appreciates the dedication and experience of his employees.

Who follows preventive safety measures, such as providing work breaks, ample water, and shade from the heat.

Who pays her employees well and provides training for them.

Who ensures all equipment is well maintained and furnished with all safety features.

Who follows all best management practices whether industry-recommended or regulator-mandated.

Who adheres to all food safety laws and regulations to prevent food-borne illnesses.

Who tracks her produce at every step in the process from seed to farm to fork.

We are grateful for the versatility of the California farmer:

Who farms more than 450 different crops—from artichokes, asparagus, and avocados, to

zucchini—which we all need to eat for great nutrition and vibrant health.

Who raises the wholesome foods that ought to dominate our plates to prevent obesity and other chronic diseases.

Who produces most, if not all, of the nation’s almonds, walnuts, pistachios, processing tomatoes, dates, table grapes, raisins, olives, prunes, figs, kiwi fruit, and nectarines.

Who leads the country’s production of avocados, grapes, lemons, melons, peaches, plums, and strawberries.

Who tends to his fields of stunning and delicate flowers that make so many people happy.

We are grateful for the ambitiousness of the California farmer:

Who produces award-winning, world-renown wine grapes, and vintages.

Who meets consumer demand for organic, gluten-free, low-fat, locally sourced, family-owned and farmed food.

Who increases the contributive value of California agriculture to the economy by stimulating secondary industries and jobs.

Who increases her yields to feed a hungry and growing world population.

Who contributes towards California’s 15% share of all U.S. agricultural exports (2015).

We are grateful for the conservation-minded California farmer:

Who uses drip or micro-sprinklers to conserve every drop of California’s water resources.

Who spends hundreds of thousands of dollars to invest in turnouts and valves to move floodwater onto their land, to build checks around open fields to capture runoff—all in an effort to recharge groundwater basins.

Who uses integrated pest management practices by following regulations and approved crop product directions, with an understanding of residues and the risk of pest and disease resistance.

Who uses fertilizers judiciously at the right time, for the right crop, in the right place, in the right amount, using the right methods.

Who installs solar panels to harness the abundant sunshine to power her operation.

Who floods her rice fields to conserve flyways for migrating birds and water for fish to thrive.

We are grateful for the savvy and social-minded California farmer:

Who advocates for his business and understands financing, accounting, insurance, and business and risk management planning.

Who reaches out to consumers (in her spare time) through social media to reassure excellent quality and safety control of their crops and to share their family’s farming legacy.

Who relays her challenges and achievements—the transparent, complex information that consumers want to know.

We are grateful for the accessible California farmer:

Who answers his phone to give directions on crop pruning, thinning and spraying.

Who responds to employee concerns with mutually beneficial solutions.

We are grateful for the generous California farmer:

Who contributes funding for local school gardens, agricultural curricula, harvest festivals, sports teams, Farm Bureaus, political action committees, and AgSafe.

Who donates to local food banks and homeless shelters.

We are grateful for the intelligent, knowledge-seeking California farmer:

Who regularly attends continuing education training on best practices, pest and disease management, and improved food safety practices.

Who stays current on scientific research and recommendations, and who chooses to fund such endeavors, plus industry associations and trade.

We are grateful for the deeply invested California farmer:

Who sends a text to her PCA to schedule a lunch meeting, then gets out of the truck and grabs a shovel to check soil moisture.

Who knows his field and weather conditions, trade and market variables, and employee concerns on a regular basis.

Who sustains the “California” brand known for exceptional quality, nutrition and safety.

We are grateful for the determination, stamina and perseverance of the California farmer:

Who stubbornly, painstakingly pushes for a good harvest despite growing challenges to his livelihood and way of life.

Who knows when to fallow a field, change a crop, or sell her business.

Who stewards her crop as best she can despite stormy weather, droughts, and floods.

Who relies on one paycheck per year, generally, which may or may not cover the cost of his operations.

We are grateful for the integrity of the California farmer:

Who checks his watch to make sure he arrives on time to his children’s parent-teacher meetings and extra-curricular activities.

Who is dedicated to her family, friends, and community.

We are grateful for the Optimistic California farmer:

Who realizes that hard times don’t last forever.

Who anticipates that next year could be better.

Who never gives up.

Who makes every effort to preserve his soil’s health, so it can produce the crop … for next year.

California Ag Today2022-11-23T09:23:36-08:00November 23rd, 2022|

Lynda and Stewart Resnick Pledge $50M to UC Davis for Sustainability Research

Historic Gift Funds New Center for Agricultural Innovation and Research Grants to Drive a Sustainable Future

The University of California, Davis, today announced that philanthropists Lynda and Stewart Resnick, co-owners of The Wonderful Company, have pledged the largest gift ever to the university by individual donors. The $50 million pledge will support the school’s longstanding commitment to address today’s most pressing challenges in agriculture and environmental sustainability.

The $50 million gift will establish the Lynda and Stewart Resnick Center for Agricultural Innovation, with $10 million of the Resnicks’ gift to be directed toward annual competitive research grants through the Resnick Agricultural Innovation Research Fund. Their donation also supports UC Davis’ $2 billion fundraising campaign, “Expect Greater: From UC Davis, for the World,” the university’s largest philanthropic endeavor to date.

“Protecting and preserving our planet for the future means we must take bold steps and push the boundaries of what’s possible,” said Stewart Resnick, who is also a member of the UC Davis Chancellor’s Board of Advisors. “UC Davis is at the forefront of tackling climate change, developing groundbreaking technologies and solutions to reduce our collective carbon footprint, and creating a more sustainable agriculture system. This gift aims to help our greatest scientific minds rise to the great challenge of our time — the sustainability of our planet for future generations. Lynda, I, and The Wonderful Company are proud to partner with UC Davis to support this all-important work.”

California Ag Today2022-10-18T09:30:14-07:00October 18th, 2022|

Walnut Bargaining Association Asks Handlers to Hold Off on Setting Prices

By Jonathan Field, Walnut Bargaining Association

The Board of the Walnut Bargaining Association (WBA) met last month in Sacramento to discuss the outlook for this year’s walnut crop. Traditionally, this is the time of year when the industry begins to hear estimates from handlers about prices growers can expect to receive for their walnuts. But this year, the WBA is hoping to delay these decisions.

“So much is still uncertain at this time,” said Pete Jelavich, WBA member from Yuba City. “The California Ag Statistics Service (CASS) has set the pre-season crop estimate at 720,000 tons, but many growers believe recent weather events since the estimate was released will reduce yields. We’re also waiting to learn more about global supply conditions and about the volume and quality of last year’s crop that is still available for sale. Both of these factors will play a major role in the price we’ll receive for our walnuts for the new season.”

In general, grower prices for walnuts have been at record lows for the past few years. And while the WBA doesn’t expect things to change dramatically this year, they are cautiously optimistic that things will improve a bit over last year.

According to WBA statistics, last year’s CASS estimate was way off its pre-season estimate of a 670,000-ton crop. The actual crop was significantly larger and eventually came in at 730,000 tons. As a result, actual prices for walnuts were dramatically lower than what was predicted in early fall.

“This year, we could very likely have the opposite scenario,” said Jonathan Field, Executive Director of the WBA. “The CASS crop estimate is just slightly below last year’s actual crop, but the report indicated far fewer nuts per tree and kernel weights that are much lighter than normal. As a result, the crop may come in lighter than predictions, which would hopefully drive prices up.”

“The WBA has sent a letter to handlers asking them not to jump the gun on setting walnut prices until we know more about the crop size and for some of the unstable market conditions to settle a bit,” said Jelavich. “Growers need to receive higher prices for our walnuts than we have for the past few years. So, we’re asking handlers to work with us and wait until we know more.”

According to Jelavich, the whole reason for the existence of the WBA is to improve grower pricing. But many walnut farmers don’t even know the WBA exists. To combat that, the WBA has recently launched a new website and is funding a series of ads in walnut growing trade publications to help raise awareness about the WBA and what it’s all about.

In short, the WBA is a grower-owned cooperative whose only goal is to help farmers get a fair price for walnuts. They do this by providing walnut farmers with accurate data, global market intelligence and information about actual prices walnut farmers receive from handlers.

“Each year, the WBA collects information about the prices our members have received for their walnuts,” says the WBA’s Field. “This information doesn’t come from coffee shop talk. We get it by collecting pay stubs that growers receive from their handlers.”

Grower pricing information submitted to the WBA is confidential. Name, address and ranch information on pay stubs is redacted to ensure anonymity. Specific information on handler names is also not made public. But the pricing information gathered by the WBA is the most accurate available anywhere. It gives WBA members a really good idea if the price they received was in line with the industry average or below it.

“In many cases, the WBA pricing report has empowered our members to go back to their handler and secure an enhanced payment,” said Field. “Our goal is to help make grower prices more transparent and to hold handlers accountable for paying farmers the right price.”

The WBA is embarking on a membership drive in an effort to help all walnut growers receive better prices.

“The more walnut farmers we have in our membership, the more accurate our pricing information will be and the greater unity we’ll have as a walnut farming community,” he said. “Joining the WBA might be the most important thing a walnut farmer can do to improve prices for walnuts.”

The cost to join the WBA is $2 per ton. In addition to information on prices received from handlers, the WBA provides a host of additional economic and market intelligence that is very difficult to get elsewhere. This includes information on sales, supply-demand issues, trade market pricing, quality, and other global economic trends.

To learn more about the information provided by WBA, growers can register here to receive a sample of WBA reports. The new WBA website includes much more information about the WBA and its benefits of members. Grow

California Ag Today2022-10-06T08:18:10-07:00October 6th, 2022|

IFPA Applauds White House for Putting Fresh Fruit and Vegetables at Core of National Strategy on Hunger, Nutrition, and Health

The White House incorporated a majority of IFPA’s eight “Fruit and Vegetable Moonshots” in its national nutrition blueprint and accepted IFPA’s three industry commitments.

By Lee Mannering, IFPA

Washington, DC – The International Fresh Produce Association, the largest and most diverse international association serving the entire fresh produce and floral supply chain, had a significant and impactful presence at the White House Conference on Hunger, Nutrition, and Health held today in Washington. Fruit and vegetable consumption was a central part of the day’s discussions and at the core of the Administration’s new national strategy on hunger, nutrition, and health released this week

“President Biden sent a clear message at today’s bipartisan White House Conference that food and its connection to health are a national priority. It is a precedent-setting moment for our country. For the first time in more than 50 years, we’re taking a systems-wide approach by acknowledging and meaningfully addressing our diet-related health crisis,” said IFPA CEO Cathy Burns, who attended the conference with IFPA Vice President of Nutrition & Health Mollie Van Lieu.

“Seeing our fruit and vegetable moonshot recommendations represented in the nutrition blueprint is a powerful step forward for our industry,” added Burns. “Now it’s time for the industry to continue the work to make these policies a reality and produce healthcare outcomes for every American and across the globe. We are ready.”

In July, IFPA released its Fruit and Vegetable Moonshot, an 8-point plan on a national nutrition strategy, for the White House’s consideration. The final strategy released by President Biden this week incorporates a majority of IFPA’s policy recommendations including:

1. Produce prescriptions and financial incentives for all Americans. The plan calls for “Food is medicine” interventions—including medically tailored meals and groceries as well as produce prescriptions.

2. Increased access to nutrition-related services through private insurance and federal programs beyond Medicare and Medicaid.

3. More transparent labeling to quickly and easily communicate nutrition information.

4. Expanded incentives for fruits and vegetables in SNAP.

5. Updates to nutrition criteria in USDA Foods procurement specifications.

6. A coordinated federal vision for advancing nutrition science.

“Ending hunger and reducing diet related disease by 2030 requires scalable policy,” said Van Lieu. “Today’s conference and blueprint puts the nation on a clear path to improved dietary quality and in turn healthier lives. That’s in no small part to the decades of advocacy of our industry and to the bold Fruit and Vegetable Moonshot we delivered to the White House this summer.”

Burns and Van Lieu both gave voice to the fresh produce industry at the conference, participating in discussions and engaging other food industry groups and advocates in conversations on nutrition, food insecurity, and food safety.

In addition to the Fruit and Vegetable Moonshot, IFPA made several industry commitments ahead of the event that could contribute to the overall goals of the conference but fall outside the purview of the federal government’s capabilities. Today, the White House announced its support for industry commitments, including all three put forth by IFPA:

1. Launch a new public database in 2023 called Produce in the Public Interest to house and disseminate research about fruit and vegetable consumption with a focus on identifying and mitigating barriers to improving national eating habits;

2. Produce and disseminate culturally-informed, consumer-friendly resources to improve the public’s nutrition literacy; and

3. Facilitate a public-private partnership with the Partnership for a Healthier America, Indianapolis, and Denver to double residents’ consumption of fruits and vegetables by 2030 – then using lessons learned as a model to move to additional cities.

“Fresh produce improves lives, but people aren’t eating enough of it. Our job at IFPA is to clear a pathway for more produce in people’s lives, from cultivating personal curiosity to advocating public policy,” said Burns. “Our moonshots, our commitments, and our leadership at the White House Conference are solidifying IFPA’s position in Washington as an impactful champion for fresh produce and for all Americans.”

IFPA was also proud to provide all of the produce for conference attendees.

The White House Conference caps off a busy week for IFPA, which held its Washington Conference September 26-28. More than 400 association members came to town for educational sessions and hundreds of meetings with Hill offices, agencies, and embassies where they advocated for robust nutrition policy, among other priorities. As part of that event, IFPA released its first economic impact study, which evaluates fresh produce’s multi-billion-dollar-role role in the United States economy and nationwide employment. USDA Secretary Tom Vilsack, Senator John Boozman (R-SD), and Representative Dan Newhouse (R-WA), among other policy leaders, addressed IFPA members at the conference.

California Ag Today2022-09-30T08:42:03-07:00September 30th, 2022|

Mexican Fruit Fly Quarantine in Portion of San Diego County

By CDFA

A portion of San Diego County has been placed under quarantine for the Mexican fruit fly following the detection of six flies and one larva in and around the unincorporated area of Valley Center. The United States Department of Agriculture (USDA), the San Diego County Agricultural Commissioner, and the California Department of Food and Agriculture (CDFA) are working collaboratively on this project.

The quarantine area in San Diego County measures 77 square miles, bordered on the north by Wilderness Gardens Preserve; on the south by the Lake Wohlford Park; on the west by Moosa Canyon; and on the east by Hellhole Canyon Preserve. A link to the quarantine map may be found here: www.cdfa.ca.gov/plant/mexfly/regulation.html.

As part of the eradication effort, approximately 250,000 sterile males will be released per square mile per week in an area of 43 square miles around the infestation. Sterile male flies mate with fertile wild female flies but produce no offspring. This reduces the Mexican fruit fly population as wild flies reach the end of their natural life span with no offspring to replace them, ultimately resulting in the eradication of the pest. In addition, properties within 200 meters of detections are being treated with an organic formulation of Spinosad, which originates from naturally-occurring bacteria, in order to remove any live fruit flies and reduce the density of the population. Fruit will also be removed within 100 meters of properties with larval detections and/or female fly detections.

The quarantine will affect any growers, wholesalers, and retailers of host fruit in the area as well as nurseries with Mexican fruit fly host plants. Local residents and home gardeners affected by the quarantine should consume homegrown produce on-site, to include canning, freezing or juicing and should not move host items from their property. These actions protect against the spread of the infestation to nearby regions which may affect California’s food supply and our backyard gardens and landscapes.

The Mexican fruit fly can lay its eggs in and infest more than 50 types of fruits and vegetables, severely impacting California agricultural exports and backyard gardens alike. For more information on the pest, please see the pest profile at: www.cdfa.ca.gov/plant/go/MexFly. Residents who believe their fruits and vegetables may be infested with fruit fly larvae are encouraged to call the state’s toll-free Pest Hotline at 1-800-491-1899.

The eradication approach used in the Valley Center area of San Diego County is the standard program used by CDFA and it is the safest and most effective and efficient response program available.

While fruit flies and other invasive species that threaten California’s crops and natural environment are sometimes detected in agricultural areas, the vast majority are found in urban and suburban communities. The most common pathway for these invasive species to enter our state is by “hitchhiking” in fruits and vegetables brought back illegally by travelers as they return from infested regions of the world. To help protect California’s agriculture and natural resources, CDFA urges travelers to follow the Don’t Pack a Pest program guidelines (www.dontpackapest.com).

Federal, state, and county agricultural officials work year-round, 365 days a year, to prevent, deter, detect, and eliminate the threat of invasive species and diseases that can damage or destroy our agricultural products and natural environment. These efforts are aimed at keeping California’s natural environment and food supply plentiful, safe, and pest-free.

California Ag Today2022-08-24T11:30:52-07:00August 24th, 2022|

Organic Farmers to get Technical Assistance From CDFA and UC ANR

By Pam Kan-Rice, UCANR

The California Department of Food and Agriculture is awarding $1.85 million to the University of California Agriculture and Natural Resources to increase technical assistance for California’s organic farmers.

CDFA’s State Organic Program is executing $850,000 in contracts with UC ANR to run through September 2024, while CDFA’s Office of Environmental Farming and Innovation is awarding a $1 million grant to run from July 2022 to June 2025.

“California farmers provide 36% of all organic production in the United States,” said CDFA Secretary Karen Ross. “This funding expands technical assistance to growers transitioning to certified organic agriculture and supports our strong California community of organic farmers and consumers by conducting field trials and demonstration projects with farmers to improve organic practices.”

California organically farms just over 2 million acres, which is about 8% of the total agricultural acreage in the state, and will likely continue to expand over time as long as consumer demand continues to rise, according to Houston Wilson, director of UC ANR’s Organic Agriculture Institute.

“Demand for organic agriculture has consistently grown every year for the past two decades,” Wilson said. “Organic currently accounts for 5.8% of domestic food sales.”

“We are excited to see CDFA increasing support for organic agriculture as part of a broader climate-smart agriculture strategy,” said Wilson. “As demand for organic continues to rise, California growers need increasingly targeted technical assistance in all areas of organic production and marketing.”

The CDFA funds will allow UC ANR to hire two academic coordinators, which are currently being recruited.

“The academic coordinators will work directly with growers, as well as develop research and extension projects that will involve existing UC Cooperative Extension personnel,” Wilson said. “One of the coordinators will specifically focus on connecting our efforts with small-scale and historically underserved growers through our partnership with the UC Small Farms Program.”

The organic practices can be used by conventional farms as well as organic farms.

“Just as organic farmers benefit from UC ANR’s pest management, irrigation and crop production research, the new knowledge developed on organic practices by the UC Organic Agriculture Institute will be useful for all California farmers,” said Glenda Humiston, UC vice president for agriculture and natural resources.

Some of the key UC ANR project objectives include:

Conduct research on soil health management, carbon sequestration and crop rotations in organic systems
Create new extension and training opportunities for organic growers across California
Provide technical assistance to both certified and transitioning organic growers
Review and summarize organic acreage and practices in California
Develop economic analysis of organic production and markets

The 2022-2023 state budget signed last week by Gov. Gavin Newsom includes $5 million in funds for CDFA to assist farmers with transitioning to organic operations, and the USDA recently announced an investment of up to $300 million for the same purpose.

California Ag Today2022-07-08T10:24:12-07:00July 8th, 2022|

The Story of Rising Fertilizer Prices

High fertilizer prices in the past year have increased costs for farmers, but for some crops more than others. Multiple potential causes could explain these price increases, stemming from both supply and demand factors. If farmers respond to high prices by using less fertilizer per acre, it will provide an environmental benefit in the form of less nitrogen and phosphorus in streams, rivers, and lakes.

By Aaron Smith, DeLoach Professor of Agricultural Economics in the Department of Agricultural and Resource Economics at UC Davis.

https://s.giannini.ucop.edu/uploads/pub/2022/02/24/v25n3.pdf

Fertilizer prices approximately doubled between the summer of 2020 and the end of 2021. Prices had been relatively stable in the prior five years at around $500 per ton for phosphate products (phosphorus) and just below $400 per ton for potash (potassium) and urea (nitrogen). In January 2022, phosphate products hit $900 per ton, and potash and urea prices were $800 per ton (see Figure 1).

What caused these price increases, and how much do they matter?

Agricultural Fertilizers

Most fertilizers deliver one or more of the following macronutrients to plants: nitrogen (N), phosphorus (P), or potassium (K).

Nitrogen makes up three-quarters of the air we breathe and is essential in plant growth. However, atmospheric nitrogen needs to be converted to ammonia (NH3) before it is accessible to plants. This conversion process, known as fixation, occurs naturally through bacteria and archaea that live in the soil or in the roots of some plants. Animals also produce ammonia by eating nitrogen-laden plants and excreting manure.

These natural processes typically do not produce enough ammonia for crops to reach their maximum potential. The invention of the Haber-Bosch process in 1909 enabled the production of synthetic ammonia by reacting nitrogen with hydrogen under high heat and pressure. U.S. nitrogen producers use natural gas as an energy source in this process.

Phosphorus helps plants grow by promoting photosynthesis and other functions important for development. Phosphorus fertilizers are typically produced by mining phosphate rock and treating it with sulfuric or phosphoric acid, causing a chemical reaction that converts it to a form that can be absorbed by plants.

Potassium strengthens plants, making them resistant to disease and higher in quality. Potassium fertilizers are created by mining potash from deep underground, similar to table salt. Chemical reactions convert it into a form usable by plants.

It is impossible to apply the exact amount of fertilizer that plants require, and there is a perception that many farmers over-apply fertilizer because they fear yield and profit losses from applying too little. This extra fertilizer is sometimes called “insurance nitrogen.”

Nitrogen and phosphorus that are not taken up by plants often end up in waterways, where they can cause a massive overgrowth of algae, known as an algae bloom. Certain types of algae emit toxins that are absorbed by shellfish. Consuming these tainted shellfish can lead to stomach illness and short-term memory problems. Drinking or coming into contact with toxins from algae blooms can cause stomachaches, rashes, and more serious problems. Algae blooms also reduce the recreational value of lakes and rivers.

U.S. Fertilizer Consumption

Nitrogen fertilizer use increased by a factor of four from 1960–1980, as shown in Figure 2. This increase coincided with dramatic increases in crop yields. In the 1970s, high agricultural commodity prices created a farm boom in which farmers planted more acres to crops and increased fertilizer applications.

After a slight drop during the farm crisis of the early 1980s, nitrogen fertilizer use has increased steadily, but at a slower rate than in the 1960s and 1970s. Phosphate and potash use has been relatively constant since 1985. Use of all fertilizers dropped substantially in 2009 after fertilizer prices increased fivefold during the 2008 commodity boom—a much larger increase than in 2021.

Nitrogen is by far the most used agricultural fertilizer by weight. It now makes up almost 60% of all fertilizer used, whereas phosphate and potash each comprise just over 20%. However, the trends in phosphate and potassium use mirror those in nitrogen, perhaps because many farmers apply multi-nutrient fertilizers.

Two facts provide insight into the role of fertilizer in the U.S. farm economy. First, corn uses about 45% of each fertilizer type, yet it takes up only a quarter of all cropland—90 out of about 390 million cropland acres in the nation. Second, in 2020 fertilizer made up 35% of operating expenses for corn growers—more than any other crop. Fertilizer is a major expense for the biggest crop in the nation, so the 2021 fertilizer price increases will significantly raise the cost of growing it.

As Figure 3 shows, fertilizer makes up more than 25% of operating expenses for several other major crops, including barley, oats, sorghum, and wheat. Between them, these crops use an additional 50 million acres each year.

In percentage terms, fertilizer is a much smaller expense for major California crops than the major national crops. It makes up about 10% of the cost of growing almonds, less than 2% of the cost of growing wine grapes, and 11% of the cost of growing processing tomatoes.

These percentages are useful for understanding the salience of fertilizer price increases for farmers. A jump in the price of one of your largest expense items will be noticed.

However, these percentages obscure the amount of fertilizer used on each crop because major national crops such as corn are relatively inexpensive to grow. Most corn is grown without irrigation, which saves the cost of acquiring and pumping water. Corn also requires little labor, especially now that tractors practically drive themselves.

According to cost and return studies by the University of California, bearing almonds cost $3,000–$4,000 per acre per year, which is about 10 times as much as growing corn in Illinois. So, although they spend a smaller percentage of their budget on fertilizer, California almond growers spend about three times as much per acre on fertilizer as Illinois corn growers, including about 25% more on nitrogen and multiple times more on potassium.

Fertilizer Production

Fertilizers are produced throughout the world and traded heavily between countries. Figure 4 shows that the United States currently produces about 85% of the ammonia it uses, most of which becomes nitrogen fertilizer, and it produces 90% of the phosphate rock it uses, most of which becomes phosphate fertilizer. It imports 90% of its potash.

Most U.S. ammonia production capacity is in Louisiana, Oklahoma, and Texas—close to natural gas fields. Natural gas constitutes about 80% of the cost of producing ammonia. Domestic production declined substantially from 2000 to 2010, a period when U.S. natural gas prices were historically high. In the latter part of this decade, two major producers merged as part of a period of consolidation in the industry.

After 2010, the deployment of hydraulic fracturing (fracking) increased the supply of natural gas and thereby lowered the cost of production dramatically. Fertilizer prices, however, remained high in this period and U.S. firms enjoyed large margins. In the last five years, production has rebounded, as more plants were built to take advantage of cheap natural gas.

Ammonia imports have mirrored domestic production, increasing as production declined between 2000 and 2010 before declining when production rebounded after 2016. Two-thirds of U.S. imports come from Trinidad and Tobago, and most of the remainder comes from Canada.

U.S. potash production has declined by 80% since 1965. Most of the remaining U.S. production comes from deep mines in southeastern New Mexico. Most potash imports come from Canada, which is the world’s largest producer by a significant margin.

Most domestic phosphate is mined in Florida and North Carolina, although there is also some production in Idaho and Utah. U.S. phosphate production declined steadily from 1980–2019, but phosphate fertilizer use in U.S. agriculture remained relatively constant over this period.

Each year between 1980 and 2019, the U.S. exported about half its phosphate production, mostly to Canada and Mexico. As production declined, the U.S. maintained domestic consumption by increasing imports, mostly from Morocco, Russia, and Israel. In March 2021, the U.S. International Trade Commission ruled that imports from Morocco and Russia had affected the U.S. producers adversely, and they imposed countervailing tariffs ranging from 9% to 47%.

The U.S. Geological Survey (USGS) is an excellent source for data on mineral commodities, and I use this source for ammonia and potash in Figure 4. For phosphate, USGS reports data on phosphate rock, which is the product that is extracted from mines. Production and consumption of phosphate rock shows an incomplete picture of the phosphate fertilizer market. Each ton of phosphate rock generates about 0.2 tons of fertilizer. The U.S. imports some phosphate rock, mostly from Peru, which domestic firms make into fertilizer. In addition, the U.S. imports a significant amount of phosphate fertilizer. Thus, Figure 4 presents phosphate fertilizer data from FAO rather than phosphate rock data from USGS.

Prices

So, why have prices increased? To answer this question, I consider supply- and demand-side factors.

On the supply side, U.S. natural gas prices doubled between the summer of 2020 and the end of 2021, which significantly raised the cost of nitrogen production. Energy is also a component of phosphate and potash mining costs, but it is much less important in the production of these products than for nitrogen. For this reason, the increasing price of natural gas cannot fully explain the fact that all fertilizers increased in price by a similar percentage.

Weather events also disrupted nitrogen supply, including the freeze in Texas in February 2021 and Hurricane Ida in August 2021. There were also some supply disruptions due to COVID-19. However, these events caused only a temporary reduction in production and so do not explain a sustained price increase. Moreover, these events did not hit phosphate and potash production regions.

Also on the supply side, shipping costs increased dramatically in 2021, especially on shipments from Asia to North America. However, most fertilizer imports to the U.S. come from the Americas and would be less affected by shipping costs.

On the demand side, crop prices are high. Corn, soybean, and wheat prices increased by 60% from the summer of 2020 through the end of 2021. High crop prices incentivize farmers to apply more fertilizer per acre, which would place pressure on fertilizer prices.

The high crop prices did not spur a substantial increase in acreage in 2021, and it is too early to know whether we will see an acreage increase in 2022. However, an increase in demand from farmers planning to expand acreage in response to high crop prices is a plausible factor behind rising fertilizer prices.

Conclusion

Predicting commodity prices is a fool’s errand. When natural gas and agricultural commodity prices come down, I would expect fertilizer prices to also come down.

When the price of a pound of fertilizer exceeds the expected increase in revenue from spreading it on the field, it is not profitable to use that pound. Fertilizer prices have increased by more than most crop prices, so in 2022 producers have an incentive to apply less fertilizer per acre. If farmers do apply less fertilizer per acre, it will provide an environmental benefit in the form of less nitrogen and phosphorus in streams, rivers, and lakes.

Moreover, to the extent that farmers apply more than the recommended amount of fertilizer as insurance against low yields, reducing use in 2022 provides an opportunity to experiment and to learn how much such insurance is necessary.

California Ag Today2022-03-14T16:07:26-07:00March 14th, 2022|

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