Farm leaders call attention to rising economic pressures

With some of the state’s major agricultural commodities struggling and farmers and ranchers facing increasing economic and regulatory pressures, California farm leaders say the industry will continue to lose farms as more are squeezed out and few people enter the business.

In a meeting last week of the California State Board of Food and Agriculture, farmers and farm advocates representing specialty crops, winegrapes, cattle and dairy voiced their concerns about problems vexing the industry. Analysts also presented findings on trends in agricultural markets, land use and farmland values.

The state board advises the governor and the California Department of Food and Agriculture secretary about important agricultural issues.

Speakers highlighted the economic hardships felt by farmers in key California agricultural sectors such as almonds, walnuts, winegrapes and dairy as they grapple with weak market prices and soaring production costs—some related to inflation and others due to increased regulations on labor, water and the environment.

Even cattle ranchers—who have enjoyed record-high beef prices in recent years—have not had it easy as wildfires burn up grazing land and losses mount due to the state’s growing wolf population (see related story, page 9).

Agricultural leaders warned that these pressures will lead to more consolidation, with smaller family farms being cannibalized by larger players, and send signals to next-generation farmers that they should look for other prospects.

California Farm Bureau President Shannon Douglass, a first-generation diversified farmer from Glenn County, pointed to the 2022 Census of Agriculture, which showed the state shed more than 10% of its farms compared to the previous census in 2017.

“We have really big challenges right now,” she told the state board. “They continue to grow. Challenges are a little bit easier to deal with when at least our pricing is good. But when pricing is not good, those problems feel even bigger.”

On top of the financial difficulties created by falling commodity prices, Douglass said the increased regulatory burdens California farmers and ranchers face hamper their ability to stay in business.

She shared a story about a 72-year-old walnut grower who spoke to her about her frustrations trying to comply with food-safety requirements. Regulators suggested the grower get help from her children.

“And she said, ‘Well, this is why my kids don’t want anything to do with the farm,’” Douglass said, telling the board this is “a common sentiment that people are feeling,” which has been made worse “when you pile that on with the economic crisis.”

With aging farmers retiring, Douglass said it is often suggested that the solution is to teach more people to farm. But she said such a response does not clear the true obstacles that prevent people from entering the profession.

“Never in my experience have I found that people are not able to get into farming because they don’t know how to farm. There’s an abundance of that knowledge, frankly,” she said, adding that people farm “because they love it so much.” What they don’t love, she said, is being “a regulatory paperwork farmer.”

Because of the high regulatory costs farmers face, Douglass said not only are young, aspiring farmers discouraged from jumping in, but existing farms are being pushed into consolidation. This will result in the loss of more small, mid-sized and socially disadvantaged farmers, she said.

“Those are the people that we want to make sure we have in this space,” Douglass said. “I want room for everybody in their sizes and opportunities because we all bring something different to the table.”

Neill Callis, a partner of Turlock Fruit Co. in Stanislaus County, said California farmers are “very anxious” about their business outlook because “not a lot of crops are making money right now.”

Though his company is largely a vertically integrated melon shipper, it is also one of the last three asparagus growers in California. He said competition from Mexico has led to the virtual disappearance of asparagus in California, and the “upward wage pressure California farmers face” is chiefly to blame.

At its most recent peak, the Golden State grew 40,900 acres of asparagus in 2000, according to the U.S. Department of Agriculture. In 2022, planted acreage dropped to 2,200. Callis said his company handles about 400 acres, using 175 workers to harvest the spring crop and 180 workers to pack it.

“Our workers make in a day what our competition’s workers make in a week,” he said, noting the state minimum wage has increased 60% during the past 12 years.

Add to that the state’s higher production and water costs. To break even, he said needs about $2 a pound. But buyers are reluctant to pay that price, he said, as they could get asparagus for $1.79 a pound from Mexico.

“The punchline of the entire story is we went to one of the stores (selling asparagus) in Los Banos, and there was Mexican asparagus under a ‘Buy Local’ banner,” Callis said.

He said while the California-grown and buy-local movement is admirable, it does not immediately address the “loss and lack of opportunity for young, motivated farmers” who want to start their own operation but can’t overcome the high cost of doing business here. In the Panoche Water District where he also farms, for example, a 700-acre piece of ground costs around $4 million, Callis noted.

“Who in their 20s is going to come up with that kind of capital to get started? And who in the world is going to borrow that kind of money?” he said.

Catherine Van Dyke of California Association of Family Farmers echoed the concerns about increased farm consolidation. She also pointed to the most recent U.S. Department of Agriculture census, which showed California lost more than 7,500 small and mid-sized farms of fewer than 500 acres between 2017 and 2022.

Van Dyke said challenges for small farmers include access to land, capital, infrastructure and insurance. Small minority farmers also face language barriers, which make it more difficult for them to comply with regulations.

Others highlighted the benefits of the different agricultural sectors, which contribute to the state’s economic base. For example, dairies and crops such as winegrapes provide year-round employment. Vineyards also add to the state’s aesthetics, said Jeff Bitter, president of Allied Grape Growers. With the voluntary California Sustainable Winegrowing Program, he said certified winegrape growers have led the effort on sustainability for California agriculture.

Geoffrey Vanden Heuvel of Milk Producers Council said dairy cows are the “ultimate up-cyclers,” noting how the animals can turn agricultural waste products such as almond hulls, which used to be a problem to dispose of, into milk and meat. California dairies have also invested “very serious resources” to environmental stewardship, he said, pointing to the amount of greenhouse gases that have been captured by dairy digesters.

“We’re a big part of California reaching its climate goals,” Vanden Heuvel said.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at [email protected].)