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Fairs try to hang on as pandemic reduces revenues

Issue Date: March 3, 2021
By Ching Lee

Already struggling financially due to the loss of revenue from event cancellations related to the pandemic, some county fair boards have decided to pull the plug on their 2021 fairs as they try to maintain operations in the face of dwindling cash flow.

A number of fairs have canceled the main event but are making accommodations for junior livestock sales, so students can still market their animals. Other fairs said they decided to cancel months ago, to spare students the financial hardship of investing in project animals they would not be able to bring to the fair.

Such was the case with the Contra Costa County Fair in Antioch. Its board of directors decided in December to cancel the fair, scheduled for May.

"We didn't want kids to start buying animals in anticipation for a fair that may not be able to happen," CEO Joe Brengle said.

He said the board also considered prospects that mass gatherings would be allowed by May, noting that "we did not figure that the rollout and distribution of the vaccine would have hit the general population by that time."

Another consideration was the sheer expense of planning and producing a fair, Brengle said, noting the cost of staffing, advertisement and other preparations. Having lost more than 90% of its annual income last year, he said, "We can't afford to start planning a fair and then have it canceled."

Though the fairgrounds have been used for COVID-19 testing and for "a few retail-type events," Brengle said he does not expect it will "be able to do much of anything" to bring in revenue until later in the fall. To save money, he said he's had to reduce staff and limit office hours.

Of the state's 80 fairs, 54 are operated by district agricultural associations with fair boards appointed by the state, which also owns those fairgrounds. The remaining fairs are run by county governments or nonprofits; the California State Fair is a separate state agency.

After the state stopped funding fairs in 2011, many began to host more events in order to be self-sustaining and became "more of a center of the community," said Shannon Douglass, first vice president of the California Farm Bureau who serves on the Glenn County Fair Board of Directors.

That was positive, she said, but the reliance on year-round events to generate revenue has "turned around to bite them in COVID times, because they can't sustain themselves right now."

"There's very little revenue coming into the fairgrounds right now," Douglass said, noting "other interim events are what keep everything going, because you can't depend on that one week" of the fair to sustain operations the rest of the year.

For some fairgrounds, the fair itself may not necessarily be a huge money maker, she said, because the cost of producing a fair is "pretty substantial," and weather and other factors could harm turnout.

With no funding from the state, Alan Phillips, CEO of Imperial Valley Expo, which sponsors the California Mid-Winter Fair and Fiesta, said its board of directors and former CEO "made some tough decisions" years ago to build the fair's reserves, which have helped to maintain current operations. More important is that its 2020 fair was one of a few in the state that did not have to cancel, because it was held in February before the state lockdown in March.

As hopes faded that pandemic conditions would improve, Phillips said the board decided in December to cancel this year's fair but still hold a junior livestock grading show for five days, which ended Sunday.

He said the grading show was done to give exhibitors a market option, even though the fair knew it would lose money in the process. The show received about 300 animal entries. In normal years, the fair auctions 700 to 800 animals, he said, noting many students in the region decided not to raise an animal this year.

For Imperial Valley Expo, the fair accounts for about 90% of annual revenue, Phillips said. In talking to other fair managers around the state, he said many agreed that fair capacity would need to reach 70% to 75% to break even. So long as the 2022 fair is not forced to cancel, he said he expects to get through this year, but noted, "We're in conservation mode … trying to do the minimum around here just to keep stuff running."

"For many of the fairgrounds, it's difficult because our business is mass gatherings," he said. "It's very, very difficult for us to be able to do anything to generate revenue."

As a nonprofit organization, the Chowchilla Madera County Fair depends on donations and community partnerships, CEO Gene Beels said. With some of those partners suffering financially due to the pandemic, he said he's had to rely on grants and loans from the federal Paycheck Protection Program.

During the winter, the fairgrounds usually bustle with roping, barrel racing and go-kart events, but because of restrictions on indoor gatherings, the fair has not been able to rent its buildings and has hosted no large events since October.

Beels said the lack of income made it impossible to move forward with the 2021 fair, which the board canceled in January.

He said the organization has considered something more scaled back, including a virtual fair and drive-through events, "but it goes back to the money situation." He said the health and safety of the public and those who work the fair was also a major consideration.

Because the El Dorado County Fair Association in Placerville makes half of its annual revenue from the fair, usually held in June, CEO Jody Gray said not having one last year "was pretty devastating."

With the county's plan to vaccinate most people by summer, she said the fair board decided to push the fair to September, though the junior livestock show remains scheduled for June, to be held either live or virtually.

It's "hard to say" whether the fair itself will be normal in September, Gray said, though "we're actually planning as if it's going to happen."

"We're definitely hurting, and if we don't have a fair this year, we might not have any funds to get into the next year," she said.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

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




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