Should we thank SGMA?
Farmers used to complain that SGMA – the law that limits groundwater pumping in California- would cut food production for the world. Turns out California farmers produce too much fruit and nuts already and over-planting is a key factor in hurting profitability down on the farm. Now some state ag leaders are urging growers to remove trees and vines to try to right size their industry after prices for tree nuts, table and wine grapes, raisins and some tree fruit have plunged in the past few years.
Water or lack of it has been key factor in farm acreage reduction.Then there is increasingly volatile weather impacting production including the flooding of farmland and damage to conveyance infrastructure in these parts. How about the trend to higher temps?
Besides water and weather there are 3 good reasons farmers may want to shrink their footprint aside from the Sustainable Groundwater Management Act.That would be price, price, and price.
Westlands want to repurpose farmland to clean energy production
Nuts: California farmers had been going in the other direction in new plantings – replacing vineyards and tree fruit orchards with tree nuts, especially almonds and pistachios. The bearing acreage of almonds rose from about 300,000 acres in the early 1980s to almost 1.5 million acres today, pistachio acreage rose from 30,000 acres to almost 450,000 acres, and walnut acreage doubled from 200,000 to 400,000 acres.
Revenue per acre peaked in 2013-15 at $8,000 an acre for almonds and pistachios and $6,500 for walnuts. Since then, revenue per acre has fallen by half or more as tree nut production increased faster than demand.USDA reported farmers harvested $0.25 per pound for walnuts,14 percent of the high observed in 2013 ($1.82 per pound). The value of US almonds exceeded $7 billion in 2014-15 but declined to $3.6 billion in 2022-23. Info from Migration News.
Recently California’s total almond acreage dropped now for two years in a row by about 74,000 acres, something that has not happened since at least 1995 according to a report from Land IQ under contract to the Almond Board of California (ABC)
“The latest Land IQ California almond acreage analysis continues to point to a reduction in total acreage driven by fewer new plantings and an increase in orchard removals,” said Richard Waycott, ABC president and CEO. “The 1.37 million bearing acreage in 2023 established a new record, reflecting plantings in 2020 or earlier, but going forward, the analysis points to a lowering of bearing acreage in 2024.”
Orchard removals increased again in 2023 to about 83,000 acres as of Aug. 31, compared with 60,400 acres removed in 2022 and continuing a trend of an increasing pace of removals that started in 2021, says the report.
Stone Fruit: The largest US producer of tree fruit with 13,000 acres of peaches in Fresno and Tulare County, was bought in 2018 by Paine Schwartz Partners and filed for bankruptcy October 13, 2023. 5,400 positions -3400 seasonal farm workers are being lost and it is not clear who will end up with these orchards with spring just around the corner.
Grapes: Allied Grape Growers are urging California growers to take out 50,000 bearing acres of grapes noting that an oversupply is hurting prices.
The publication Farm Progress reports “Jeff Bitter, president of the Fresno-based Allied Grape Growers, warned a wine conference audience recently that nearly 20,000 acres of newly planted grapes are coming online this year, which will add to the glut of fruit.
He recommended that 30,000 acres of older vines be razed in California’s interior regions, including the Central Valley, and another 20,000 acres be removed from the coast, including 5,000 combined in Napa and Sonoma counties. If realized, these removals would result in a net reduction of 30,000 bearing acres, he noted.
But in California, growers are still planting vineyards at a brisk pace. Last year, enough vines were sold by nurseries to plant 19,000 new acres, and plantings of red varieties grew again, Bitter said.
“Quite honestly, we don’t need more red grapes,” he said, adding that removals should occur across varieties. “This is everything, really. We’re not going to just take out one or two varieties and set everything right.”
The industry is planting at the right pace but not removing enough, he said. It’ll likely take several years of pullouts to put supply and demand back into balance, he said.
“The pain doesn’t go away,” he said, “until grapes go away.”
Wine: Brager Beverage Alcohol Consulting says the industry faces tough challenges today related to demand. Here is his list.
-Consumer demand for wine – and alcohol in general is declining.
-Wine remains underdeveloped among consumers of legal drinking age, many of whom are multicultural. Baby boomers and their preceding generation are still important, but will age out.
-Social moderation is on the rise.
-There is intense competition from other alcoholic, non-alcoholic and even cannabis-infused drinks.
-Premiumization is still evident, but not as much as it was during the COVID-19 pandemic.
New purpose for farmland?
Look what’s happening in Westlands Water District. This week the state’s largest water district posted a long range plan that will designate much of the district for renewable energy production by taking more land out of crop production.The Valley Clean Infrastructure Plan (VCIP) provides a blueprint for the development of clean energy facilities and supporting infrastructure with an overall generating and delivery capacity of up to 20,000 MW (10 Diablo Canyons) on approximately 130,000 acres of repurposed farmland.
The plan goes from the Avenal Cutoff north to Nees, past Mendota along I-5, maybe a 60-mile stretch.It does not include all the solar activity south of Avenal Cutoff in Kings county.
The District’s main objectives for VCIP are to repurpose drainage-impaired and other agricultural land for clean energy generation in order to promote enhanced agricultural productivity within the District by: 1) constructively addressing the chronic shortage of surface water deliveries by facilitating redirection of scarce surface water allocations to other productive agricultural land; 2) facilitating SGMA implementation by contributing to the re-allocation of groundwater for irrigation on other productive agricultural land and mitigating risk of subsidence along the San Luis Canal/California Aqueduct; which in combination will result in increased reliability and resilience of agricultural water supply in the Westside Subbasin; and 3) providing for orderly development and decommissioning of clean energy facilities to promote preservation of agricultural land within the District.
The bottom line: fewer acres of land planted to crops should save enough water for those still farming to survive and keep commodity prices high enough to make some money.
Crop yields: Offsetting worries about acreage retirement is the long term trend of rising crop yields Take processing tomatoes- In the 1920s the yield for processing tomatoes averaged some 6 tons/acre in California. Today that same piece of dirt produces closer to 50 tons per acre. And that dramatically increased production is using dramatically less water.
The adoption of drip irrigation has been impressive. While only 2% of the acreage was under drip irrigation in 2001, this percentage was 19% in 2003, 33% in 2007 and 78% in 2012 says a UC Davis study.
Likewise for the Valley’s biggest crop – milk. Today fewer cows are producing more milk with less water use and less pollution.In the 1950s there were more than double the number of dairy cows in the United States as today but now they produce almost twice as much milk.
Back at that big Westside water district, they are looking to repurpose some of their lands but also experimenting with the water they have that could be put to use to grow cattle feed.
A new environmental notice posted this week says Westlands Water District is proposing a Desalination and On-Farm Recycling Pilot Project which will use an existing groundwater well to supply a reverse osmosis treatment facility. Using proprietary vegetation specifically engineered to uptake salts and other constituents, Westlands will apply the mineralized water to irrigate salt-tolerant crops, which will remove the salts and store in the plants. Due to this uptake of salts and minerals such as boron and selenium, the crop will be rich in nutrients, making a valuable source of bio-nutrients for livestock once harvested. The long-term average annual water supply benefit could be up to 1,460 acre-feet per year.
Valley land fallowing could reach 500,000 acres it has been estimated. Consider that some of that land could be used to recharge the aquifer but not grow a crop that competes with our farms.