Early rains help range partially recover

By Ching Lee; Ag Alert

Late autumn and early winter storms that moved through the state have spurred greener pastures, improving grazing conditions on California rangelands, but ranchers say more rainfall is needed for them to begin rebuilding their herds.

“As far as grass growth, this is as good of a feed year as we’ve ever had this early in the season,” said Placer County cattle rancher Joe Fischer. “This early grass growth and early root establishment will really set us up to have a phenomenal feed year come spring if these rains continue.”

But he said he also prepared for additional drought by reducing the herd he manages by 20 percent last winter and leaving more residual feed on the ground in order to promote better grass growth this season.

Mild temperatures have also aided grass growth, Fischer said, but they don’t bode well for a healthy snowpack—sensors measure the Sierra Nevada snowpack at about half of average—and that will affect water supply for this summer where he has irrigated pasture. In addition, many springs are not yet flowing the way they should be, he added, noting that a lack of drinking water on one ranch prevented him from placing any cattle there in early fall, even though it had plenty of residual dry feed.

“I’m still fearful that we aren’t out of the woods yet when it comes to drought in California,” he said.

Despite his fears, Fischer said he’s “hopeful and optimistic that this is going to turn around for us” and that California ranchers will move toward reestablishing their herds, though their cattle numbers will remain conservative at first.

With last month’s deluge, Mariposa County rancher Clarence Borba said it appears he can start retaining some of his cattle, after being forced to cut his herd in half and to buy feed when there was nothing left to graze. Because he leases his ground, which receives no irrigation, Borba said his costs soared when he had to buy feed and pay rent on the land even when no grasses were growing.

“There were times when I didn’t know if we were going to make it through,” he said.

Borba said while he’s trying to build back his herd, he’s doing it slowly.

“Things are looking a lot brighter now than they were a few months ago, but our profit margin is pretty narrow, so you can’t make too many mistakes and spend too much money,” he said.

San Joaquin County rancher Diana Connolly said she sold about a quarter of her herd early last year and didn’t keep any replacement heifers, due to a lack of feed. Like many cattle ranchers around the state, she has had to buy plenty of hay during the last three years. Whether she will keep any replacements this year will depend on how the rest of the rainy season goes, she said, as she doesn’t have to make that decision until May, when she weans her calves.

Though she has filled her barns with hay, Connolly said if more rain does not come this season to improve pastures, “it won’t make any difference how much feed you have right now.” She recalled how the lack of precipitation last winter left ranchers scrambling, even though the fall began with some good moisture.

“The rains are good, but I think the whole cattle industry is still feeling the effects of the three-year drought,” she said.

One lesson that Sacramento County rancher Jim Vietheer said he has learned from the drought is to start buying crop insurance, with this year being the first time he’s signed up for it. He noted that federal disaster aid has allowed him to buy extra hay. Strong cattle prices have also allowed him to cull his herd more heavily than he normally would, so that he could reduce impact on his pastures.

He said even though recent rains “have helped our situation amazingly,” he fears it will be short-lived if the state does not continue to get more, periodic rainfall. For this reason, Vietheer said he’s going to remain conservative on his stocking rate on some of this leased properties, “in case it becomes another bad year.”

“I’m a lot happier, but you don’t want to count your chickens before they hatch,” he said.

For San Diego County rancher Jim Davis, his region has not gotten “significant amounts of rain” and it has “come very gently, with little runoff,” he said, but he also noted that “conditions are very much improved over what they were a month ago.”

He said his cattle will be on supplemental feed for another month and a half, but that is typical for this time of year. Being three hours away from the Imperial Valley, Davis said buying feed has not been a problem, and while the price of hay “is never low enough,” at least there’s an adequate supply.

But for now, he said he will try to maintain his herd at the current level.

“I’d like to see another year of good moisture before we start rebuilding,” he added.

Riverside County rancher Bud Wellman said his herd size has not bounced back because a fire two years ago destroyed much of his summer range, which is on forestland, and the U.S. Forest Service so far has not allowed grazing to resume.

“Right now is when the cattle would do the most good,” Wellman said, adding that cattle grazing would restore the forest ground so that water could penetrate it rather than causing floods.

What has helped him, he said, is that the Girl Scouts of Orange County has allowed his herd to graze its campgrounds for weed abatement and fire prevention.

While his summer range in the mountains has improved with the recent storms, Wellman said where he’s hurting is on his winter range, south of Palm Springs. He has not been able to place his cattle there because many of the springs and creeks cattle use for drinking water are still dry, and what rainfall the region received has not been enough to get them flowing.

“The water situation on the desert side is still very critical,” he said. “If we could get those streams and springs back, we’d be in good shape.”

Access to water proves key factor in farmland value

Source: Kate Campbell; Ag Alert

With drought adding new constraints on the state’s water supplies and farmers and ranchers increasingly turning to groundwater to sustain food production, lawmakers now are contemplating bills requiring changes to how groundwater basins are managed. If adopted, opponents said, the bills have the potential to undermine food production, reduce agricultural land values and hamper the overall economy.

Two pieces of legislation were each amended twice last week and now have identical language, requiring assessment of impacts on local ecosystems from groundwater pumping. The measures will be heard in their respective Appropriations Committees this week. The California Farm Bureau Federation and other agricultural and water organizations oppose both measures.

Jack Rice, CFBF associate counsel, warned of unintended consequences from laws that are hastily passed and implemented.

“Figuring out how to improve groundwater management in California requires figuring out the best possible solution for a highly complex problem,” Rice said. “That doesn’t mean throwing legislation together and passing it before people even have a chance to understand the implications of how a new groundwater management framework will operate. Poorly conceived and executed changes to groundwater management would be very disruptive.”

Among the issues hanging in the balance, he said, are farm and ranch land values, which depend on property rights for access to groundwater supplies, particularly when surface water supplies are unreliable due to drought, plus regulatory and water-system constraints.

In summarizing current farm and ranch real estate trends, the California Chapter of the American Society of Farm Managers and Rural Appraisers concluded in its 2014 trends assessment that acute drought threatens many growers this year, and long-term water policy will have long-term ramifications on the farm and ranch sector.

In a presentation to agricultural land appraisers this spring, the association said “property in areas with threatened ground and surface water is at risk, but property in areas with good water will continue to be attractive.”

Rice said discussions about potential changes to groundwater management raise questions about the ability of affected property to sustain anticipated cash flow.

“Those kinds of uncertainties can have an impact on the value of underlying assets, such as land values, property improvements and equipment,” he said.

The Salinas Valley, which produces much of the nation’s fresh produce, is in a unique situation, according to Monterey County Farm Bureau Executive Director Norm Groot.

“We’ve been working for the past 60 years to manage our water resources—addressing everything from groundwater management and saltwater intrusion to surface supplies and flood control,” he said.

Because landowners have been engaged on many issues at the local level, Groot said, “we think another layer of regulation from the state will only hinder what we’re doing. It’s a hindrance we don’t need.”

Tony Toso, a Mariposa County rancher and professional farm and ranch land appraiser, said land appraisal values are based “on what has occurred in the rearview mirror,” but that how well water is managed at the local level has an impact on values.

“The market is going to start telling me as an appraiser what’s happening to land values in specific irrigation districts and groundwater basins based on reliability and quality of water supplies,” said Toso, who is a CFBF director.

“We do know groundwater is essential to ensuring a consistent agricultural land value,” he said. “Everyone knows that land without water isn’t worth much.”

Overall, appraisers said California farm and ranch land prices have held steady. However, rangeland without access to water has seen a decline in recent years.

Experts warned that not getting groundwater regulation right has the potential to strip some of California’s best farmland of its productive use and set off a decline in asset values.

“It’s hard to prove something that could happen in the future,” Toso said, “but if you don’t analyze water supply problems right, if regulations aren’t implemented right, if it’s turned into an emotional issue, then asset values could start heading for zero.”

Changes to groundwater management regulations could have a “huge” effect on local economies, said Tod Kimmelshue, a senior lender with Northern California Farm Credit, who explained that agricultural lenders always take into account water quantity and reliability for farm operations.

The question lenders need to determine, he said, is what is the highest and best use of a piece of land.

“Farmers need to be heavily involved in deciding who determines beneficial use,” said Kimmelshue, who is a past CFBF director. “It’s important for groundwater users to start monitoring how much water they’re using so they can document how much water they need for beneficial use.”

He said lenders are requiring increasingly more information on a property’s wells and access to groundwater, adding, “It’s a huge part of the collateral we consider when making individual lending decisions. But the impact of poorly designed groundwater management regulations could extend beyond affecting agricultural land values; there could be a ripple effect that moves through local economies from reduced property and business tax revenue and local jobs.”