Ag Today Monday, April 18, 2016

Ag Today

Monday, April 18, 2016

 

Sacramento Bee

Delta pumping to Southern California restricted despite rainy winter

By Dale Kasler and Ryan Sabalow

For the first time in five years, Northern California’s rivers are roaring and its reservoirs are filled almost to the brim.

But you’d hardly know it, based on how quiet it’s been at the two giant pumping stations at the south end of the Sacramento-San Joaquin Delta. The pumps deliver Sacramento Valley water to 19 million Southern Californians and millions of acres of farmland in the San Joaquin Valley.

While precipitation has been roughly four times heavier than a year ago, the Delta pumps have produced just a 35 percent increase in water shipments. For every gallon that’s been pumped to south-of-Delta water agencies since Jan. 1, 3 1/2 gallons have been allowed to flow out to sea. Pumping activity has decreased considerably the past three weeks, to the rising irritation of south state contractors.

The reason lies in a combination of poor timing, the drought-ravaged status of several endangered species of Delta fish, a suite of environmental laws and regulations that govern the pumps – and the complexities of the Delta’s intricate network of river channels, canals and sloughs. As regulators have taken extraordinary steps to protect nearly extinct fish species, their decisions to restrict pumping have become another flash point in California’s water wars – one that shows the easing of the drought doesn’t calm the fighting over how water gets allocated.

Congress has weighed in, with House Republicans and California’s senior Democratic senator pushing for more pumping. In Sacramento, federal and state bureaucracies are butting heads in response to competing demands on the Delta’s water.

On one side are the California Department of Water Resources, which operates the State Water Project, and the U.S. Bureau of Reclamation, which runs the federal government’s Central Valley Project. These agencies oversee the state’s vast network of dams, pumps and canals, and they are under pressure from their south-of-Delta customers to help replenish groundwater reserves and south state reservoirs that have shrunk after four years of drought.

On the other side are two federal agencies responsible for safeguarding Delta fish protected by the Endangered Species Act: the U.S. Fish and Wildlife Service and National Marine Fisheries Service. Court rulings empower the agencies to govern Delta water flows, which often translate into pumping limits to keep fish from being harmed.

“This year we saw the fishery agencies, particularly the Fish and Wildlife Service, make more conservative calls,” said Mark Cowin, director of the Department of Water Resources. “My sense is they felt compelled to take every conservative action they could … to try to prevent extinction.” He said his agency has engaged in “spirited conversations” with the fisheries agencies about their determinations this year.

Many of the water agencies that depend on the Delta pumps say the restrictions are based on faulty science and harming the economy.

“The state will never recover from this water shortage, if they keep operating (the pumps) the way they have been this first three months of the year,” said Johnny Amaral, deputy general manager for Westlands Water District, an influential San Joaquin Valley farm-water contractor. Westlands has been told to expect just a 5 percent water allocation this year from the Central Valley Project.

Officials with the fishery agencies say their rules are grounded in fish counts, hydrological flows and other factors.

“It’s science-based,” said Steve Martarano, spokesman for Fish and Wildlife’s Sacramento office.

Built decades ago near Tracy, the pumps are so powerful they’re capable of shipping two rivers’ worth of water uphill to the canals that funnel water south and west through California. The federal pumps move water uphill for a mile before dumping it into the Delta-Mendota Canal.

When revved up, the pumps literally cause the Old and Middle rivers – sections of the San Joaquin River – to flow backwards. These “reverse flows” can confuse migrating fish and push them toward predators. Fish also can die as they get sucked into pump intakes, despite the presence of screens designed to save them.

“The reason they’re not (pumping) now is that we know endangered fish are right adjacent to these export pumps,” said Jonathan Rosenfield, a marine biologist with the nonprofit Bay Institute in San Francisco.

Even with the restrictions, south-of-Delta agencies are seeing improved deliveries of water this year compared to 2015, and the pumps are expected to operate full throttle this summer. But contractors say the shipments could have been more generous, given the amount of water sloshing through Northern California.

“We’ve got a really wet year,” said Terry Erlewine of the State Water Contractors, an association of state project customers. “In a year like this, we would ideally be able to recharge the groundwater basins.”

Since Jan. 1, a total of 1.1 million acre-feet of water has been pumped to customers in Southern California, the San Joaquin Valley and small portions of the Bay Area. Nearly 3.6 million acre-feet have flowed to the ocean. During the same period last year, when rains were scarce, it was a more even split: The pumps shipped 806,000 acre-feet south, while 875,000 acre-feet cascaded through the Delta and out to sea.

The tension between sustaining fish populations and supplying the state and federal water projects came to a boil in March. Heavy rains turned a so-so winter into a wet one, at least in Northern California. Bureau of Reclamation spokesman Shane Hunt said nearly half the water that flowed into the Central Valley Project’s major reservoirs this winter materialized during an 11-day stretch.

“That changed everything,” he said.

But that was also the point when biologists say fish were in greatest peril.

In late March, as stormwater surged into the Delta, pumping operations were cut approximately in half to protect the species most emblematic of the Delta’s ecological problems, its namesake smelt. Each year, in response to stormwater entering the estuary, Delta smelt migrate up from the salty Suisun Bay to spawn in the estuary’s fresh water.

Martarano said Delta smelt populations have declined so much that regulators had no choice but to operate the pumps extra carefully this year. As recently as the 1970s, these finger-length fish once numbered in the millions. This year, state trawling surveys are finding mere handfuls of adult fish.

“The numbers are so horrible,” Martarano said.

Another endangered species, the winter-run Chinook salmon, also had fisheries regulators concerned about pumping in March.

While Delta smelt are often described as a “useless minnow” by farmers and others seeking to relax Endangered Species Act protections, the Chinook have a direct impact on California’s $1.4 billion-a-year salmon fishing industry. Officials announced last week that commercial anglers along the coast will see salmon fishing opportunities cut nearly in half compared with last year, in part because of the depleted winter run.

The fish spawn in summer along a stretch of the Sacramento River below Shasta Dam. Last year, regulators held back flows at Shasta to keep more cold water in the system, disrupting water deliveries to downstream farmers. The plan failed and only 3 percent of the wild juveniles survived the overly warm river waters. It was the second straight dismal year for winter-run numbers, putting the species on the brink of extinction.

Winter-run Chinook rely on powerful river flows to push them toward the Pacific. Biologists say the fish that survived the sweltering summer of 2015 were in the Delta, heading toward the sea, as the March storms hit. They were joined by tens of thousands of hatchery-raised salmon that had been released into the Sacramento River earlier in the winter via a federal program designed to prevent the species’ extinction. Some of the hatchery fish were equipped with acoustic tags enabling biologists to know when they had entered the Delta.

Along with smelt and salmon, concerns over another fish have played into pumping decisions. Since April 1, pumping operations have been dialed back further, mainly to safeguard steelhead trout, another fish protected by the Endangered Species Act. Like the Chinook, juvenile steelhead migrate through the San Joaquin River system and swim precariously close to the pumps on their way to the Pacific.

Regulators say concerns should ease as summer approaches and the fish are out of harm’s way, allowing the pumps to operate at a higher volume. “As the season plays out, you’re going to see very big changes from where we were a year ago,” said the Bureau of Reclamation’s Hunt.

To some degree, the slowdown in pumping has been a matter of timing and geography. If it had rained more in November and December, when the fish weren’t in the vicinity of the pumps, more water could have been shipped south, said Hunt, the Bureau of Reclamation spokesman.

Plus, if more rain had fallen on the San Joaquin River basin, as was originally forecast for El Niño, that would have generated a healthier rush of water coming into the Delta from the south. More water flowing in from the San Joaquin would have offset much of the “reverse flow” problem on the Old and Middle rivers, allowing the pumps to run more, said Maria Rea, assistant regional manager at the National Marine Fisheries Service.

State officials point to the “reverse flow” issue as yet another argument for building the Delta tunnels, Gov. Jerry Brown’s controversial $15.5 billion plan to re-engineer the Delta.

The project calls for diverting about half of the Sacramento River’s flow upstream, near Courtland, and shipping it through a pair of tunnels to the pumps at Tracy. State engineers say it would eliminate the “reverse flow” problem and allow the pumps to run more reliably without harming fish.

“The one long-term solution I can point to here is the plumbing fix we’re advocating,” said Cowin, director of the Department of Water Resources.

The Delta tunnels plan faces an increasingly uncertain future, given myriad legal threats and unresolved funding issues. South state water contractors say they are focused on the present – and argue that scientific bungling has kept the pumps from roaring to life this spring.

“The fish agencies entirely botched the science this year, the hydrodynamics of it,” said Jeff Kightlinger, general manager of the Metropolitan Water District of Southern California, an agency that relies on Delta water to help supply its 19 million customers. “This is the kind of year they should have had the pumps on.”

Democratic U.S. Sen. Dianne Feinstein and congressional Republicans have echoed the complaint, calling on the White House to order the fisheries agencies to relax pumping restrictions. Last week, the Republican-controlled House energy and water appropriations subcommittee approved a bill that would require more pumping. Feinstein has publicly called on federal scientists to use “better science and real-time” modeling in their pumping decisions.

That galls fishing advocates and environmentalists such as Rosenfield at the Bay Institute.

Rosenfield said federal biologists draw on an immensely complicated set of real-time data, including fish counts, flows and river conditions to determine how much pumping can be legally allowed. It’s not the science that’s faulty, he said; it’s that south state agencies want to hear a different outcome.

“The message I get is, ‘We need more science to tell us when we can pump more,’ ” Rosenfield said. “When we get the science that tells us we can pump less, (they claim) we need more science.”

Dale Kasler: 916-321-1066, @dakasler, dkasler@sacbee.com

 

 

Fresno Bee

Gerawan workers’ vote to decertify UFW nullified by ag labor board

By Robert Rodriguez

The California Agricultural Labor Relations Board has upheld an administrative law judge’s decision to dismiss a petition by workers for Gerawan Farming of Fresno who sought to decertify the United Farm Workers as their bargaining representative.

As a result, the balloting by Gerawan workers will be nullified, the ALRB said.

The development was a new milestone in what has been a long and often heated process.

In a decision reached Friday, the ALRB said it affirmed the judge’s previous finding that Gerawan officials had tainted the workers’ decertification effort with certain actions and that it was impossible to know the true sentiments of the employees toward the UFW.

On Oct. 25, 2013, Gerawan employee Silvia Lopez filed a petition to decertify the UFW from representing the company’s workers. An election involving Gerawan workers was held several weeks later, but the ballots were impounded after objections were raised and unfair labor-practice complaints were brought.

In his ruling, administrative law judge Mark R. Soble determined that Gerawan had violated the Agricultural Labor Relations Act by supporting and assisting in signature gathering for the decertification petition.

Gerawan also increased workers’ wages as the decertification effort was ongoing, Soble found, which was an unfair labor practice.

The ALRB agreed with Soble that Gerawan “improperly inserted itself into the campaign by discriminatorily permitting decertification petition signature gathering during work time while prohibiting pro-union activity of the same kind.”

The board also agreed Gerawan brought an unfair wage increase, solicited grievances and had approved an unlawful blockage of company entrances to collect signatures of workers for the petition.

For these reasons, the ALRB said, the petition would be dismissed and the election set aside.

In a statement, the Gerawan family sharply disagreed with the board and said it would appeal the ruling.

“In its decision to destroy the ballots, the board ignores the desires of workers to determine their own economic future,” Gerawan said.

The company noted that except for the 2013 election, there had not been such a balloting of Gerawan workers for more than 25 years. “The board states that it does not ‘ignore the fact’ that the employees began this decertification campaign,” Gerawan said. “The board then disregards how its own decisions to impose a forced union contract on the employees started this campaign.”

 

 

San Luis Obispo Tribune

Guest worker program provides labor, poses difficulties for SLO County growers

By Lindsey Holden

Jorge Avila spends his days picking lettuce and his nights in a motel bunk bed.

Avila’s job is not a glamorous one. He said through a translator that his back sometimes hurts from stooping over so much in the fields and that he must share a room with four other men in a converted Santa Maria motel.

But Avila is happy for the opportunity to support his wife and teenage daughters back in Sinaloa, on the western coast of Mexico. He said he can earn about $12 per hour working in California compared with $3 per hour in Mexico.

He smiles, but his dirty shoes and sweatshirt — a tear on one side has been neatly mended — are evidence of his hard labor.

Avila is a guest worker allowed into the United States through the federal H-2A program. Growers can use the program to help bring in foreign workers during a domestic labor shortage, although they’re required to provide food, housing and transportation for their employees. Most workers stay only for a season — Avila will be here until November.

The H-2A program has grown in popularity in recent years. California had 6,043 guest worker positions certified during fiscal year 2014, up from 2,629 in 2010, according to data from the U.S. Department of Labor. The state ranked seventh in total H-2A positions, with North Carolina and Florida occupying the No. 1 and No. 2 spots, respectively.

Santa Maria had the most guest workers in the state with 800. The average wage offered was $11.33.

Guest workers in SLO County

Guest workers recently became an issue in San Luis Obispo County because of the construction of a controversial Nipomo farmworker housing development. Greg and Donna France of Mar Vista Berry were in the process of building seven homes to house about 112 H-2A farmworkers in the Mads Place cul-de-sac, near the 100 block of South Oakglen Avenue.

Neighbors were angry about the possible influx of farmworkers, and an April 6 blaze that Cal Fire has called “suspicious” destroyed one partially constructed home and damaged another. The Frances on Wednesday pulled their plans to build the housing as a result of the fire and the threats they said they’ve received. They’ve also offered a $10,000 reward for information on a possible arsonist.

Jason Resnick, vice president and general counsel of Western Growers, a trade association, said labor shortages in California are the result of fewer workers coming to the United States from Mexico, partially because of a crackdown on illegal immigration. This is prompting more growers to make use of the H-2A program, he said.

Resnick said he’d never seen a community react to farmworker housing the way Nipomo neighbors did. But he said housing for workers will continue to be a problem, especially for growers providing living quarters for H-2A laborers. A “cohesive farmworker housing policy” is needed, he said.

“As cities and suburbs expand into agricultural areas, it’s causing more tension between those who farm and those who don’t farm,” Resnick said.

Gail Wadsworth, co-executive director of the California Institute for Rural Studies, a nonprofit public interest research group based in Davis, said farmworker housing over the years has shifted from labor camps to more urban areas, mainly as a result of tighter government regulation of farmer-provided living spaces. Growers frequently don’t want to play landlord in addition to dealing with the other rules that govern their businesses, she said.

Why hire guest workers?

Many growers contract out the extensive paperwork and preparations that go into hiring H-2A workers. Tom Ikeda is co-owner of Ikeda Bros., an Arroyo Grande Valley company that primarily grows vegetables, including lettuce, broccoli and bok choy. He said his company last year hired eight guest workers through a contractor, which also arranged housing and transportation.

Ikeda said his workers live in homes in the Five Cities area. It’s best to house workers close to amenities such as grocery stores but not too far away from the fields where they’ll be working, Ikeda said. He didn’t want to specify exactly where his workers are living out of concern for their safety after the Nipomo fire.

Although it’s more expensive to hire H-2A workers because of the additional housing and transportation costs, Ikeda said having guaranteed labor made the program worthwhile. This season, he said, he plans to bring in 13 or 14 workers, who will “supplement,” or make up 20 percent or less of his labor force.

“In the future, the need is going to be greater for farmworker housing,” Ikeda said. “Labor is short, and it’s been short for a while.”

Guest worker housing solutions

In Santa Maria, some growers have found homes for their workers in buildings converted specifically for that purpose. Western Sky Properties is in the process of converting Laz-E-Daze, a former retirement center in the 1300 block of North Broadway, into Pasado del Sol, a housing facility for H-2A farmworkers.

Renovations continue, but general manager Ed Galanski said the farmworkers the facility has so far hosted in its 90 units have been good tenants. The facility has received fewer complaints while it’s housed H-2A workers than when it housed seniors, Galanski said.

The converted Budget Inn at the corner of Broadway and East Bunny Avenue, where Avila is staying, now also exclusively houses H-2A workers. On Wednesday, Avila and other men relaxed and chatted outside their rooms after a day in the fields. Some purchased chips and shaved ice from a small cart a vendor had pushed into the parking lot.

Hidalgo Cossio leaned over the balcony outside his room to eat his icy treat. Cossio, whose wife and three kids live in Baja California, said through a translator that this is his second stint as a guest worker — he previously picked crops in Yuma, Ariz. He likes California, he said, but in Arizona, it was easier to visit his family.

Improving the guest worker program

All the players involved in the H-2A program said they wished the guest worker process could be modified to make it less difficult to bring workers over the border.

Wadsworth called the guest worker program a form of “indentured servitude” because workers aren’t free to leave their growers if they don’t like the work or how they’re treated.

She said she’d like to see an open borders policy and the creation of a worker visa that would allow laborers to move around more easily and go home if they can’t find jobs.

Resnick said government red tape and delays turn some farmers off to using H-2A. Ikeda is currently the victim of such problems — he said his workers are right now being held up at the border because of government glitches.

“It’s time-consuming,” Resnick said. “The process is a lengthy one, and it’s prone to delays.”

Lindsey Holden: 805-781-7931, @lindseyholden27

 

 

Fresno Bee

Central San Joaquin Valley farmers, packers bet big on solar to cut power costs

By Robert Rodriguez

Lower utility costs, federal incentives and business-friendly regulations are helping to drive the growth of solar power among central San Joaquin Valley farmers.

Although Valley farmers are no strangers to using the sun for power, agriculture companies are building bigger systems with the capacity of supplying a majority of their power.

New systems to come online include a 1,098-kilowatt installation at Baloian Farms in Fresno. Bee Sweet Citrus has a 2.4-megawatt system and Brandt Farms in Reedley has installed a 1-megawatt system. By comparison, the average home can operate on just a three- to five-kilowatt solar panel system.

Baloian Farms, a family-run company that grows and packs bell peppers, lettuce and onions, installed the system to stabilize its current and future energy needs and to contribute to the community.

“As a company that relies on the consistent and reliable delivery of electricity to cool and store our produce, we are very happy to make an investment in this system where we become a positive contributor to the stability of the infrastructure that we rely on,” said Sierra Lopes, marketing specialist for Baloian Farms.

Lopes said that by the end of the year, the 3,360-panel system will account for about 63 percent of the company’s energy use at its Fresno plant.

Solar and agriculture experts say solar is one of the few ways farmers can control rising business costs. Many growers have little to no flexibility in cutting expenses like feed, labor and complying with federal and state regulations.

“Agricultural solar operations are definitely on the rise as farmers are actively seeking to offset some of the high costs of energy on their farms,” said Michael Boccadoro, executive director of the Agricultural Energy Consumers Association.

Nationwide, the 2012 Census of Agriculture found that the number of farms with renewable energy systems was 57,299, up 144 percent from 2007. Of the energy systems in use, 36,331 were solar panels, or 57 percent of the total.

One in 10 California farms generates renewable energy, according to an estimate from the California Climate & Agriculture Network.

Anne Hayden, marketing manager at Arise Solar in Fresno, said her company has installed systems for farming companies that range from 200 kilowatts up to 3 megawatts. One megawatt of solar can power a national average of 164 homes, according to the Solar Energy Industries Association.

“Farmers are doing what they can to stay ahead, and they have seen the benefits of solar,” Hayden said. “With the federal tax incentives and seeing what their neighbors are doing, solar is not scary anymore.”

The federal tax incentive provides for a 30 percent credit for the cost of the system.

The drought also has renewed interest in solar as farmers’ energy costs have gone up because of the need to run irrigation pumps longer.

“People have spent a lot of money on new wells or pumps and they want to be able to offset that cost,” Hayden said.

Farmers also have benefited from being allowed to use one solar installation to offset the energy used by multiple meters, instead of needing a separate system for each meter.

“That important change made these projects cost-effective for farms and dairies,” Boccadoro said.

Brian Medeiros, owner of Medeiros and Son Dairy in Hanford, agreed that despite the $2 million cost of his one-megawatt system, he has no regrets about the investment.

“We are saving $300,000 to $350,000 a year in electricity costs,” Medeiros said. “And we can operate more efficiently and take better care of our cows.”

Medeiros said that before he installed solar, he waited until temperatures hit 80 degrees or higher before turning on the misters and fans to cool off his 2,500 dairy cows. Now, he doesn’t hesitate to flip the switch on the cooling system when temperatures are in the 70s and higher.

“You can only push a cow so much,” Medeiros said. “Keeping them cool and comfortable is good for their health and longevity.”

Robert Rodriguez: 559-441-6327, @FresnoBeeBob, brodriguez@fresnobee.com

 

 

Fresno Bee

Central California agriculture sees failed crop of presidential hopefuls

By John Ellis

As central San Joaquin Valley farmers and ranchers know, agriculture is rarely an easy business. There’s the up and down of commodity prices. Land subsidence. Water, of course. Add politics and it gets downright messy.

Now comes the 2016 presidential campaign.

Many in the Valley’s agriculture community are watching with a growing level of concern, as they feel increasingly backed into a corner by policy stances among the leading contenders that are anti-trade and anti-immigration. Other important issues such as water don’t even appear to be on the candidates’ radar.

There even is talk among some in the industry of supporting Hillary Clinton, even though many consider the Democratic front-runner to be a deeply flawed candidate.

“We’re not in good shape,” said Joel Nelsen, president of California Citrus Mutual, an Exeter-based growers lobby.

The four leading presidential candidates – Democrats Clinton and Bernie Sanders and Republicans Donald Trump and Ted Cruz – all oppose the Trans Pacific Partnership, a trade-and-investment agreement between 12 Pacific Rim countries that was signed in February but still awaits congressional approval.

In addition, Cruz, the Texas senator, and Trump, the billionaire businessman from New York, have made anti-immigration policies central campaign themes.

Trump most famously boasts that he will build a wall along the U.S.-Mexico border and make Mexico foot the bill. He said Mexican immigrants coming into the U.S. were “bringing drugs. They’re bringing crime. They’re rapists.” Cruz, however, also wants to build a wall – “that works” – as well as saying he will end “illegal amnesty.”

“I am totally despondent over the entire race,” said Nat DiBuduo, president of the Fresno-based Allied Grape Growers. “I’m not at a point that I could say I would support Hillary. I’m still too hard-core Republican to ever get to that point, but I am totally disenchanted with the Republican alternatives.”

The situation has some in the industry, such as DiBuduo and Barry Bedwell, president of the Fresno-based California Fresh Fruit Association, praying for a John Kasich miracle. The Republican Ohio governor favors the Trans Pacific Partnership and has a far more moderate stance on immigration than either Cruz or Trump.

Hoping against hope

“John is the only adult in the room at times, it seems,” Bedwell said.

But for now Kasich is at best a long shot. He has 144 delegates, far behind Trump’s 755 and Cruz’s 545. A candidate needs 1,237 to earn the Republican presidential nomination.

Kasich and his supporters realize he never will reach the required number of delegates, but he is staying in the race, betting on a brokered GOP convention this summer in Cleveland. In that scenario, no Republican goes into the convention with the required number of delegates, and Kasich emerges as the preferred alternative.

Some polls have suggested he is the only Republican who could beat Clinton in a one-on-one November matchup, though it is still early in the campaign.

“As we’re looking at this, we’re hoping against hope that John Kasich can find a path here,” Bedwell said.

Absent Kasich, it leaves the Republican Party with a high likelihood of nominating Cruz or Trump. As flawed as Clinton is, Bedwell said, she may be the best-qualified candidate if Kasich cannot gain the Republican nomination. Sanders is widely dismissed by Valley agriculture.

Clinton favors comprehensive immigration reform, and because of that she holds some appeal to the agriculture industry, whose leaders hope she can be educated on water and other issues, and maybe come around on the Trans Pacific Partnership.

It feels strange for Valley agriculture, which largely has rallied around Republicans in recent decades. (There are those, however, who say that President Bill Clinton was more helpful to the industry than either George H.W. Bush or George W. Bush.) But given the strident tones on trade and immigration from both Trump and Cruz, backing a Republican for president might be difficult if either is the nominee.

Nisei Farmers League President Manuel Cunha is angry about it.

Like many in the industry, Cunha worries a lot about water, and wonders why it doesn’t seem to be on any presidential candidate’s radar. He wonders how they will approach key issues such as the Farm Bill. He frets about trade.

But he can’t get away from immigration and says it really makes him feel like a one-issue person.

This weekend, he is in Washington, D.C., preparing for Monday’s U.S. Supreme Court hearing on executive actions on immigration taken by President Barack Obama.

The Deferred Action for Parents of Americans and Lawful Permanent Residents program and the Deferred Action for Childhood Arrivals were challenged by more than half the states, mostly led by Republican governors. The nation’s highest court will hear arguments on Obama’s actions and Cunha is on the president’s side.

If the Supreme Court sides with the states, Cunha said it could devastate west-side Valley communities such as Mendota.

Looking ahead, he fears Cruz winning the presidency with his strong anti-immigration views. He knows Trump has threatened to build a wall, but hopes that he might regain his business sense on the issue and reconsider the effect his immigration stance would have not just on the nation’s agriculture sector, but others that depend on low-cost foreign labor. Cunha says his rational side tells him it’s a dire situation.

Backed into a corner

“We’re backed in a corner, no doubt,” Cunha said. “But between Hillary or Ted Cruz, I have to work with Hillary. I’m not saying I support Hillary, but what choice would I have at the end of the day? I have no choice. Why would I work with a person who is anti-immigrant?”

Others in the industry are simply waiting.

West Valley farmer Dan Errotabere wants to see how the presidential process shakes out before he makes a decision on backing a candidate. He expects the candidates’ talking points to move toward the political center as they try to broaden their appeal in a general election. At least he hopes that will happen.

“I just think they’re playing to their base,” he said.

Errotabere, who along with his brothers farms almonds, pistachios and wine grapes, acknowledges the important issues at play such as immigration and trade. As the election season moves toward California’s June 7 primary, he hopes the candidates also will start to address water.

California Citrus Mutual’s Nelsen agrees.

“We have continued challenges on water from regulators,” he said. “Fish keep winning.”

But like Errotabere, he is waiting and watching at the presidential level.

There have been conversations with the Kasich camp, but Kasich has yet to show he is viable, Nelsen said, and “you can’t ask us to throw money down what appears to be a rat hole.”

Nelsen says education is the key. Presidents Ronald Reagan, Clinton and both Bushes knew about agriculture. Candidates this year, for the most part, don’t.

“The only thing Donald Trump knows about agriculture is what’s served in his hotels,” Nelsen said. “The only thing Ted Cruz knows about agriculture is that it’s practiced some in Texas.”

The Allied Grape Growers’ DiBuduo agrees. He’s not sure Clinton, Cruz or Trump know or even care about the Valley’s water issues.

“Their responses would be in sound bites,” he said. “They’re all just running. They don’t know or care what is best for the ag industry.”

Still, Nelsen said, the agriculture industry needs to try to get the candidates’ collective ear so they aren’t just hearing from their most strident supporters – either the tea party for the Republicans or environmental activists for the Democrats.

“We’ve just got a job to do,” Nelsen said. “It’s a steep hill.”

John Ellis: 559-441-6320, @johnellis24, jellis@fresnobee.com

 

 

Bakersfield Californian

Borba dairy sale milked the farmland boom

By John Cox

In the distance is what remains of the George Borba & Son Dairy near Taft Highway and Interstate 5.

When one of Kern County’s largest dairies sold in April of last year, followed shortly thereafter by the auction of its 8,000 cows, speculation was that it had succumbed to low milk prices, high feed costs and stiffening environmental regulations.

Industry observers say that while each of those considerations probably played a role, another trend may have been the deciding factor: California’s farmland boom.

Large growers and institutional investors have driven the price of agricultural real estate in the Central Valley to record highs since about 2005. Dairy operators, more than some other ag property owners, have been in a good position to capitalize on the land rush.

Size is a big reason for their attractiveness. Farmland brokers and others in the business say nut producers hoping to achieve efficiency of scale see dairies as large, contiguous properties that are otherwise hard to come by.

“If you’re just farming one huge block, you don’t have to move equipment,” Bakersfield ag appraiser Steve Runyan said. “You’ve got one central location.”

Last year’s sale of the 1,550-acre George Borba & Son Dairy for $34 million — at $22,000 per acre, an economically viable candidate for conversion to nut orchards, at least at the time  — is an example of the market pressures facing Kern County dairies.

But given the recent softening in ag real estate prices, the transaction may also represent an opportunity whose time has come and gone.

County property tax records show the Borbas purchased at least some of the dairy property in 2008 as part of a 2,107-acre transaction comprising 16 parcels. The sale price for that deal was $20,000 per acre, for a total of about $42.1 million.

The buyer in last year’s transaction, Fresno-based Olam Farming Inc., is part of a large international company known for its permanent and row crops, not dairy operations. A recent visit to the outskirts of the property southeast of Taft Highway and Interstate 5 turned up no indication the property is being used as a dairy or orchards.

Olam did not respond to requests for comment, and the Borba family that sold the dairy has declined to discuss the property’s sale.

CONTRIBUTING FACTORS

Bakersfield farmland broker-appraiser Mike Ming said one advantage the Borba dairy had going for it, sale-wise, was water.

The property is served by the Kern Delta Water District, an agency offering surface deliveries, water banking and good quality water. In recent years, such attributes have been seen as very positive with regard to Central Valley ag real estate.

Ming and others said the size of the dairy made it doubly enticing. While buyers willing to pay for top prices for farmland can often find the total acreage they need, they said, it’s much harder to come across contiguous land.

Dairies fit the bill in that regard, said Vernon Crowder, a senior analyst and senior vice president with ag lender Rabobank.

“People that wanted to plant more nuts, especially if they could find enough water, were really competing for land and were looking at dairies as a possibility,” he said.

MARKET COMPETITION

At the same time, dairies have been under pressure to reevaluate their business. Slumping milk prices and rising feed costs have coincided with new and pending rules aimed at protecting air and water quality from dairies.

An analysis Rabobank published in October found milk production in California, though responsible for fully one-fifth of the nation’s milk in 2014, has slowed in recent years due to rising costs and competition from other agricultural crops for land and water. The report also noted profits at the state’s dairy industry have been highly volatile since 2003.

It’s little wonder, then, that Central Valley dairies have considered selling their land.

“Given the rising demand for California’s nuts and the scarcity of suitable land and water, many nut growers and nut processors are hoping less competitive dairies will switch to nut production completely,” Rabobank wrote in its analysis.

No data was available showing how many Central Valley dairies have sold since the farmland boom began. But Ming cited at least one other dairy sale in Kern County since the Borba transaction closed. He declined to provide details because he was involved in the negotiation.

Expectations for additional California dairy purchases have fallen significantly since the downturn in commodity prices during the past year. Farmland brokers say demand for ag land has subsided in light of much lower prices for almonds and pistachios.

Crowder said the forecast is for at least a temporary interruption in the trend of dairies being converted to cropland.

“We don’t know yet, but we expect that there’s going to be less competition (for ag real estate) for a while,” he said.