Water, markets complicate farms’ planting plans


Issue Date: April 13, 2016
By Kate Campbell
Fewer processing tomatoes will be planted in California this year, according to the California Tomato Growers Association, which says concerns about water, markets and currency exchange rates all contribute to farmers’ cropping decisions.
Photo/Paolo Vescia

Food production in California—always risky business—has become increasingly complex and unpredictable. Farmers say recent meager irrigation water-supply announcements for some of the state's growing regions have further complicated planting and operating decisions for 2016.

In some areas of the state, where adequate surface water supplies are expected for the first time in several years, farmers say the prospect of future water supply instability—along with increasing regulations, wage hikes, soaring input costs and softening U.S. and world commodity markets—creates huge uncertainties that will affect crop planting decisions this year and into the foreseeable future.

Strong markets the past few years helped California farmers and ranchers weather some of the driest conditions seen in about 1,200 years. But now, economic experts point to global commodity supply imbalances and a strong dollar during the upcoming crop year and warn of a downturn in the U.S. farm economy, including the specialty crop sector.

"It's so complicated that it's hard to give an overview summary of what's happening for me," San Joaquin Valley farmer Bill Diedrich said, noting that his diversified operation includes farm ground in regions that have been given water allocations of 5 percent, 30 percent and 100 percent.

"In the past five years, we haven't waited to hear about allocation announcements to decide how much water we're going to buy and what we're going to farm," he explained. "We're working at least a year ahead of time to secure water. We know (state and federal) contract supplies are absolutely unreliable."

As a result, he said farmers are doing advanced planning for banked water, making spot-market purchases, investing in irrigation technology, trying alternative cropping patterns, experimenting with new cultivars, using a variety of approaches to deficit irrigation and pumping groundwater—all while keeping an eye on volatile domestic and international markets and complying with a growing regime of regulations.

Diedrich said crop revenues posted in recent years demonstrate "resourcefulness and resiliency" among farmers.

"People see record production and think we're a bunch of whiners. What they don't see is how far ahead we're planning to stay alive, how complicated those plans have become, so we can deliver food supplies to the market," he said.

Tulare County farmer Chris Lange, who also farms in Fresno County, said he relies on water supplies from nine different agencies. Managing a farming operation in multiple locations with fluctuating water deliveries is complicated, said Lange, who grows citrus, olives and grapes.

"It takes a small army to manage water efficiently—everything is being captured and recycled, there are continual calculations about each crop's water needs based on locations, soil conditions, age and varieties of the trees," he said.

Federal and state water projects, and a number of local water agencies, have told farmers to expect improved water allocations this year based on wintertime precipitation. But, as Diedrich noted, there's wide variation in water availability around the state.

The generally improved allocations "don't have black-and-white implications" for tomato farmers, according to Mike Montna of the California Tomato Growers Association, who predicted plantings of processing tomatoes will decline 14 percent. A lot of that decline has to do with currency exchange rates and market conditions, he said.

"I'm not saying we're down 14 percent just because of water," Montna said. "Our raw product price is down $7.50 a ton compared to last year. In areas not getting a decent water allocation, they're looking at high water prices and lower market prices. It doesn't make sense to plant a crop that doesn't add up."

Influenced by rising production costs, regulatory constraints and water supply restrictions, total strawberry acreage in California for 2016 will likely be down 12 percent, said the California Strawberry Commission. Production during fall 2016 could drop 27 percent from last year.

Other California crops expected to decline in planted acreage, according to the U.S. Department of Agriculture, include dry edible beans, down 13 percent from last year, and upland cotton, down 4 percent to the lowest intended acreage ever recorded. Record-low hay and oat plantings are also expected.

During the 2015 crop year, California farmland acres fallowed due to drought and unreliable surface water supplies were estimated at about 600,000, said Mike Wade of the California Farm Water Coalition, who said it's hard to predict whether some of those acres will return to production this year.

Farmers and agricultural organizations continue to express concern about the amount of water allowed to flow to the sea uncaptured during the winter's El Niño storms.

California Fresh Fruit Association President Barry Bedwell said the 5 percent allocation to federal water customers in the western San Joaquin Valley demonstrates the problems facing the California water system.

"How can anyone logically explain such a meager allocation when over three quarters of a million acre-feet of water has flowed needlessly out into the Pacific Ocean with no known benefit?" he said.

Coupled with the earlier announcement of a 30 percent allocation for Class I water users on the Friant system on the east side of the San Joaquin Valley, which affects a large percentage of fruit growers, Bedwell said tree fruit and table grape growers in the region will continue to rely on groundwater to irrigate crops during the coming months—a situation he said "could have been avoided to a material degree if we had more flexibility and transparency in the current water distribution system."

For growers such as Shaun Ramirez, who lost his Westside farming business and home last year because his water supply was cut to zero, the small increase in water allocation this year comes too late. He's working now for a farmer in Madera.

"I used to farm in Mendota," Ramirez said. "My family is a victim of the (federal) Endangered Species Act. The community of Mendota is being choked. A 5 percent water allocation for the Westside is laughable, to be honest. The economic conditions in our small communities are horrible—there's no work, no options."

Given the uncertainties about water supplies, Ramirez said, "I think a lot of people in the valley won't survive this. With four years of no water, I see people who used to produce food standing in food lines. I can't grasp why our state and federal leaders are letting it happen."

(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at kcampbell@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.