Fresno County Agricultural Value Declines in 2015

Fresno County Agricultural Value Declines in 2015

Drought, Lower Commodity Prices and Production Issues Drive Report Down

The Fresno County Department of Agriculture’s 2015 Crop and Livestock Report was presented to the Fresno County Board of Supervisors TODAY.  Overall, agricultural production in Fresno County totaled $6.61 billion, showing a 6.55 percent decrease from 2014’s $7.04 billion.

“The strength of Fresno County’s agricultural industry is based upon the diversity of crops produced.  This year’s report covers nearly 400 commodities, of which, 62 exceed $1 million in value,” said Fresno County Agricultural Commissioner/Sealer of Weights and Measures Les Wright“The lack of a reliable water supply continues to fallow productive land,” Wright continued.

Les Wright Fresno County Ag Commissioner
Les Wright, Fresno County Ag Commissioner
The annual crop report provides a chance to examine changes and trends in crop acreage and yields.  Amounts in the report reflect the gross income values only (income before expenses) and does not reflect net return to producers.

According to the released figures, an increase was seen in vegetable crops (4.95% = $59,025,000). Decreases occurred in field crops (41.99% = $134,995,000), seed crops (30.80% = $10,437,000), fruit and nut crops (6.6% = $229,551,000), nursery products (25.65% = $16,088,000), livestock and poultry (9.44% = $118,769,000), livestock and poultry products (31.38% = $199,769,000), apiary (2.39% = $1,735,000) and industrial crops (54.38% = $3,992,000). 

“Every day, millions throughout the world are eating food that originated in Fresno County,” said FCFB CEO Ryan Jacobsen. “The magnitude of this industry does not occur by happenstance. Generation upon generation of agricultural infrastructure has been built to feed an unbelievably productive, wholesome and affordable food supply.

Ryan Jacobsen
Ryan Jacobsen, CEO Fresno County Farm Bureau

“I continue to remind all—eaters; elected officials; local residents who benefit from a healthy, vibrant farm economy; and those whose jobs depend upon agriculture—that we must not take what we have for granted,” continued Jacobsen.  “By not addressing our challenges head-on, whether it be water supply reductions, labor issues, governmental red-tape, etc., we are allowing our economy, our food and our people to wilt away. The direction of the Valley’s agricultural industry explicitly determines the direction of the Valley as a whole.”

One popular component of the report is review of the county’s “Top 10 Crops,” which offers a quick glimpse of the diversity of products grown here. In 2015, these crops accounted for three-fourths of the report’s value.  Added to this year’s list were mandarins (9) and oranges (10).  Mandarin demand continues to push acreage upwards.  Dropping out of the Top 10 was pistachios and cotton.  Pistachio production was significantly reduced last year due to the “blanking” issue that left many shells without nuts, and cotton acreage continues to be depressed due to reduced water supplies and fallowed land.

For a copy of the full crop report, contact FCFB at 559-237-0263 or info@fcfb.org. 
Fresno County Crops 2015
Fresno County Farm Bureau is the county’s largest agricultural advocacy and educational organization, representing members on water, labor, air quality, land use, and major agricultural related issues. Fresno County produces more than 400 commercial crops annually, totaling $6.61 billion in gross production value in 2015.  For Fresno County agricultural information, visit www.fcfb.org.

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Nut Yields May Be Reduced by Drought

Source: Christine Souza; Ag Alert

Enduring a drought that has lasted several years, growers of California’s primary nut crops—almonds, walnuts and pistachios—are finishing this year’s harvest and planning for what Mother Nature may or may not bring in the coming year.

“Location, location, location” proved critical to almond and pistachio crops in particular, and seemed to be the determining factor in whether trees had enough water and the required number of chilling hours.

Some farmers were luckier than others, including Larry Lowder of Madera. A grower of almonds and pistachios, Lowder said he was “very fortunate where we live and this year we were able to produce a crop, where others didn’t have that luxury.” He said his farm is located in a microclimate that received sufficient chilling hours during the winter, something that was lacking in other parts of the Central Valley.

Dealing with a surface water allocation of zero, Lowder said he had to rely on deep wells, and he saved as much water as possible by using drip irrigation, microsprinklers and upgraded wells.

Even with a relatively favorable situation, Lowder said his almond yields were down by about 10 percent, although pistachio yields were much better.

In some California pistachio and almond orchards, the drought resulted in a shorter crop and a higher incidence of “blanks,” when a shell lacks a viable nut or kernel.

“Some growers, who had the effect of poor pollinization as well as lack of water, their crops were significantly off and there will be crop insurance claims filed,” said Richard Matoian, executive director of Fresno-based American Pistachio Growers. “One grower said the orchard looked like it had 3,500 pounds per acre, but ended up with 800 pounds of nuts to the acre.”

The U.S. Department of Agriculture estimated this year’s California pistachio crop at between 485 million and 500 million pounds, Matoian said, which is smaller than expected because it was to be an “on year” for pistachios. New figures from the Administrative Committee for Pistachios have increased the estimate to 515 million pounds, which Matoian said was “larger than expected in midsummer but certainly lower than original expectations.”

Many pistachio growers purchased emergency supplies of water, Matoian said, paying as much as $3,000 per acre-foot. Reports from the almond sector showed some growers paid between $1,200 and $2,200 per acre-foot.

Reflecting on how almond growers negotiated the drought, Mel Machado, assistant director of member relations for Blue Diamond Growers, said some orchards were either removed or abandoned, and water was moved from older blocks of trees to younger blocks.

“Growers have learned a lot about how to manage the water they have, but even with good technology and good application, there are orchards that definitely had increased stress this year,” Machado said. “You can see it in the lack of growth of the trees.”

Farmer Stan Wilson of Shafter grows almonds and other crops, and said he made it through this season on well water, but had to reactivate old wells, add extensions to pumps and install an underground pipeline so that he could move water from one field to another.

“We made it through the year. We had no surface water at all, so the only water supply we had was from wells. It is the first year we had zero deliveries,” said Wilson, who fallowed about 160 acres of row crops as a result of the drought.

With harvest drawing to a close, Machado reported that this year’s almond crop is hovering at around 1.85 billion pounds, down from the earlier government estimate of 2.1 billion pounds. Machado said he has seen higher levels of rejects in the almonds produced, but there were problems in addition to drought that played a part, such as varying degrees of stress and salinity issues.

“Quite frankly, we needed the 2.1 billion pounds. A lot of people look at orchards planted over the past few years and say, ‘What are you going to do with those when they come into production?’ Well, we’re going to market them. There is demand out there for the product. We’re still in a demand-exceeds-supply situation,” Machado said.

With just a few more weeks left of harvest, California walnut growers expect a crop that is 545,000 tons, which would be a record, said Dennis Balint, CEO of the California Walnut Commission. No official production figure will be known until harvest is complete, but Balint attributed the expected increase to newly planted orchards and young orchards that are coming into production with higher yields.

He, too, reported continued strong demand.

“Traditionally, we’ve been the ingredient nut, but demand for walnuts is strong and health benefits are starting to drive demand for walnuts. We are seeing more snacking, which we are pleased with,” Balint said.

Marketers said the increasing demand for California nut crops in domestic and global markets is good news for growers. There are 200,000 bearing acres of pistachios in California, and 100,000 acres are non-bearing, Matoian said. For almonds, USDA reported there are 860,000 bearing acres, with 80,000 non-bearing acres. There are an estimated 280,000 bearing acres of walnuts in California, and 45,000 acres that are non-bearing.

For the almond business, Machado said, “the limitation on the crop is going to be water. Water is going to be the competing factor for the almond crop, just as it is for just about every other crop in the Central Valley.”

As winter approaches, nut growers said they are hopeful that the state’s water situation changes for the better, although, Matoian said, “Even if we have a good rain year, we are going to have a lack of water available to growers; that is inevitable. That is what we’re being told by water regulators.”

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New Farm Bill Program to Help Provide Relief to Farmers Affected by Severe Weather

By: Monique Bienvenue; Cal Ag Today Social Media Manager/Reporter

U.S. Agriculture Secretary Tom Vilsack announced the implementation of a new Farm Bill initiative that will provide relief to farmers affected by severe weather, including drought. The Actual Production History (APH) Yield Exclusion, available nationwide for farmers of select crops starting next spring, allows eligible producers who have been hit with severe weather to receive a higher approved yield on their insurance policies through the federal crop insurance program.

Spring crops eligible for APH Yield Exclusion include corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts, and popcorn. Nearly three-fourths of all acres and liability in the federal crop insurance program will be covered under APH Yield Exclusion.

“Key programs launched or extended as part of the 2014 Farm Bill are essential to USDA’s commitment to help rural communities grow. These efforts give farmers, ranchers and their families better security as they work to ensure Americans have safe and affordable food,” said Vilsack. “By getting other 2014 Farm Bill programs implemented efficiently, we are now able to offer yield exclusion for Spring 2015 crops, providing relief to farmers impacted by severe weather.”

The APH Yield Exclusion allows farmers to exclude yields in exceptionally bad years (such as a year in which a natural disaster or other extreme weather occurs) from their production history when calculating yields used to establish their crop insurance coverage.

The level of insurance coverage available to a farmer is based on the farmer’s average recent yields. By excluding unusually bad years, farmers will not have to worry that a natural disaster will reduce their insurance coverage for years to come.

Under the new Farm Bill program, yields can be excluded from farm actual production history when the county average yield for that crop year is at least 50 percent below the 10 previous consecutive crop years’ average yield.

Federal crop insurance, which is sold through private crop insurance agents, offers a variety of options that may impact coverage and premium costs. Producers are encouraged to work with their crop insurance agent to determine the coverage that best meets their risk management needs. Farmers can find a crop insurance agent in their area at: www.rma.usda.gov/tools/agent.html.

 

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Drought’s impact on crops

Source: Dale Kasler; The Sacramento Bee

It’s harvest time in much of California, and the signs of drought are almost as abundant as the fruits and nuts and vegetables.

One commodity after another is feeling the impact of the state’s epic water shortage. The great Sacramento Valley rice crop, served in sushi restaurants nationwide and exported to Asia, will be smaller than usual. Fewer grapes will be available to produce California’s world-class wines, and the citrus groves of the San Joaquin Valley are producing fewer oranges. There is less hay and corn for the state’s dairy cows, and the pistachio harvest is expected to shrink.

Even the state’s mighty almond business, which has become a powerhouse in recent years, is coming in smaller than expected. That’s particularly troubling to the thousands of farmers who sacrificed other crops in order to keep their almond orchards watered.

While many crops have yet to be harvested, it’s clear that the drought has carved a significant hole in the economy of rural California. Farm income is down, so is employment, and Thursday’s rain showers did little to change the equation.

An estimated 420,000 acres of farmland went unplanted this year, or about 5 percent of the total. Economists at UC Davis say agriculture, which has been a $44 billion-a-year business in California, will suffer revenue losses and higher water costs – a financial hit totaling $2.2 billion this year.

Rising commodity prices have helped cushion at least some of the pain, but more hurt could be on the way. With rivers running low and groundwater overtaxed, the situation could get far worse if heavy rains don’t come this winter.

“Nobody has any idea how disastrous it’s going to be,” said Mike Wade of Modesto, executive director of the California Farm Water Coalition, an advocacy group based in Sacramento. “Is it going to create more fallowed land? Absolutely. Is it going to create more groundwater problems? Absolutely.

“Another dry year, we don’t know what the result is going to be, but it’s not going to be good,” Wade said.

Central Valley residents don’t have to look far to see the effects. Roughly one-fourth of California’s rice fields went fallow this year, about 140,000 acres worth, according to the California Rice Commission, leaving vast stretches of the Sacramento Valley brown instead of their customary green.

“We’d all rather be farming, as would everybody who depends on us – the truck drivers, the parts stores, the mills,” said Mike Daddow, a fourth-generation rice grower in the Nicolaus area of southern Sutter County.

Daddow opted to fallow 150 of his family’s 800 acres this year and counts himself lucky. “We did better than a lot of people,” he said.

Last week, Daddow was gearing up for the harvest, which begins Monday. It was pleasantly warm, but the faint smoky smell from the King fire was another unwelcome reminder of the parched season of discontent.

“It affects me, yes, I will have less profit,” he said. “It affects hourly workers. If there’s no ground to till, I can’t hire them to do anything.”

Daddow hired just six workers during spring planting, instead of the usual nine or 10.

Calculating total job losses related to the drought is difficult, especially in an industry in which many workers are transient and much of the work is part time. The state Employment Development Department, drawing from payroll data, said farm employment has dropped by just 2,700 jobs from a year ago, a decline of less than 1 percent.

But experts at UC Davis say they believe the impact is more severe. Richard Howitt, professor emeritus of agricultural economics, said he believes the drought ultimately will erase 17,000 jobs. He bases that, in part, on the increased number of families seeking social services.

The human cost shows up at rural food banks, which are reporting higher demand for assistance from farmworkers and their families. At the Bethel Spanish Assembly of God, a church in the Tulare County city of Farmersville, the number of families receiving food aid every two weeks has jumped from about 40 last year to more than 200. Farmersville, a city of 10,000, is at the heart of a region that grows an array of crops, from lemons to pistachios to grapes.

“Some of them are working … but they’re not putting in the hours,” said the Rev. Leonel Benavides, who is also Farmersville’s mayor. Thanks to state-funded drought relief, the church has been able to meet the increased demand – and then some.

“Instead of just two boxes, we give them three,” Benavides said.

The effect goes beyond the farm fields. N&S Tractor, which sells Case IH brand farm equipment throughout the Central Valley, has seen business tail off as farmers conserve cash.

“It’s not just our dealership,” said N&S marketing director Tim McConiga Jr., who works out of the company’s sales office in Glenn County. “You talk to John Deere, you talk to Caterpillar, everyone is going to tell you their numbers are down.”

The drought has had varying impacts on different areas of the state, depending in part on who has first dibs on the dwindling water supply. Some growers have stronger water rights than others. Generally speaking, Sacramento Valley farmers have had it easier than their counterparts south of the Sacramento-San Joaquin Delta, where the cutbacks have been more severe.

The Modesto and Turlock irrigation districts are delivering about 40 percent of their usual amounts. The Merced Irrigation District is far worse off, as are many of the West Side areas supplied by the federal Central Valley Project. The Oakdale and South San Joaquin irrigation districts have not had large cutbacks, but leaders worry about a dry 2015.

Regardless of geography, many growers have had to make difficult choices about which fields to water, leaving portions of their farms idle.

Bruce Rominger of Winters, chairman of the California Tomato Growers Association, made the decision to push ahead with his tomato crop at the expense of other commodities. With tomatoes selling for a robust $83 a ton, vs. about $70 a year ago, it was a matter of simple economics.

“Other crops are not getting the water,” said Rominger, who owns and leases a total of about 5,000 acres. “We sacrificed some alfalfa, we sacrified some sunflowers, we sacrificed quite a bit of rice. We fallowed 25 percent of our farm.”

Much of the processing tomato crop goes to canneries in Modesto, Oakdale, Escalon and Los Banos.

Choosing to focus on one crop doesn’t guarantee victory. Even the $4 billion almond industry – the great success story of California agriculture in recent years – could not be shielded from the drought’s effects.

As worldwide demand for almonds has boomed, prices have soared past $4 a pound and farmers have responded with more supply. Orchard plantings have continued unabated, even this year. With water supplies running low, many almond growers set aside other commodities to keep their orchards going.

Even so, the almond yield declined. Blue Diamond Growers, the big farmer-owner almond cooperative based in Sacramento, predicts that production in California will fall this year to around 1.9 billion pounds when the harvest is complete in a few weeks. That compares with the 2 billion pounds harvested last year and the U.S. Department of Agriculture’s forecast, released in late June, that this year’s crop would total 2.1 billion pounds.

What went wrong? Almonds are one of the thirstiest crops around, and there wasn’t enough water to generate big yields.

“I don’t think there was anyone who used as much (water) as they normally do,” said Dave Baker, director of member relations for Blue Diamond. The hot spells in June and July “stressed the trees even further” and curtailed production, he said.

With California accounting for 80 percent of global almond supply, Baker said he’s worried about being able to meet demand. “We have a growth industry,” he said.

Blue Diamond has plants also in Salida and Turlock, and several smaller processors are in or near Stanislaus County.

The lack of water last spring likely also has stunted navel orange production in the San Joaquin Valley, where harvest is expected to begin in a few weeks.

“We’re expecting some kind of damage to the crop,” said Alyssa Houtby, spokeswoman for California Citrus Mutual, a grower-owned association based in Tulare County. “We didn’t have the water in those key months.”

Economist Vernon Crowder, a senior vice president with agricultural lender Rabobank, said farmers went into this difficult season with a couple of advantages: Most commodity prices have risen in recent years, and most growers are in pretty good financial shape as a result. But another dry year could bring more serious hardship, he said.

“They have a little bit of cash to withstand this,” Crowder said. “They’re going to get through it. The real question is what is going to happen next year.”

Similar questions are being raised in the California wine industry, which produces much of its volume in the Modesto area. The last two grape harvests were extraordinarily strong, leaving an overhang of product that should help offset the slight declines in this year’s harvest. “Pricing should be steady,” said industry consultant Robert Smiley, a professor emeritus of business at UC Davis.

That doesn’t eliminate fears that next season’s crop could shrink substantially. Craig Ledbetter of Vino Farms, a Lodi grape producer, had enough water this year but said he’s afraid he’ll receive “curtailment notices” from the state signaling significant cutbacks in next season’s water supply.

“I’m very nervous about water,” said Ledbetter, who also raises wine grapes in Sonoma County. “If we don’t have a rainy winter, I can pretty much guarantee we’re all going to be receiving curtailment notices. If that happens, we’re going to be concerned about keeping the vine alive rather than harvesting it.”

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