Category: Agriculture

Central Valley dairy operators are on the streets of Sacramento again this week demanding the state adjust the price they get for their milk from the state’s cheese makers who gobble up about half the supply.

One dairy tweeter says “Gov. Brown / Karen Ross: We’ll be at your office steps Oct. 18th @ 11:00 a.m. Bigger and Louder ! Your hands are stained with our industries Blood,Sweat,Tears and Generations of hard work to build California’s #1 Ag industry which you choose to destroy on YOUR inactions.
It’s in your stained hands to act. Give our industry a fair fight, we need our 4b milk price in parity with class 3 which is required by law.”

The state formula used to pay dairymen for their milk undervalues milk to the tune of $200,000 a month to the average dairy for the past 12 months argues Hanford dairyman Joaquin Contente who is speaking at this weeks rally

But CDFA ag secretary Karen Ross has already turned down petitions to adjust the formula as well as others to reconsider the May CDFA decision.CDFA has a tough balancing act to insure both the supply of milk and profit margins of the state’s huge cheese making industry remain healthy.

At the moment nobody could argue the dairy operators are a healthy bunch right now.

Empty Barns

Western United Dairymen CEO Michel Marsh says 100 dairies may go out of business this year as low prices for milk earlier this year and record high prices for feed along with years of debt are making herd dispersal auctions and more empty barns commonplace. That’s happening right now around Kings and Tulare counties, the nations biggest dairy region.

In a fast moving story the region is producing of months less milk and there are worries there could be far less.

A recent CDFA report says in August Kings County milk production was down nearly 10 % compared to the same month a year before.Statewide we were down 5.8%.

Contente who ships milk to co-op Land O Lakes in Tulare says LOL is receiving about 6 to 7% less milk every day than a year ago due to cow liquidation – dairies being shut through bankruptcy or lender pressure. Another big co-op CDI is down millions of pounds as well, the two largest state players. CDFA reported a decline 29% in nonfat milk production in August, a huge product for the export market.

The decline in the local milk supply has a face to it as long time dairy operators throw in the towel including Tulare County dairyman Warren Hettinga who sold off his cows at his 4 locations this past month including all rolling stock and farm equipment.

Kings County’s John Camara with 75 year in the dairy business sold off  his herd this week,October 16 at the Overland Sales yard in Hanford.
“Every time I turn around there is another neighbor dairy going out.” shrugs Contente.

While a state price adjustment won’t fix all the problems by a long shot, Contente says “we’ve been subsidizing the cheese business since the 1980s when the state order helped attract the big cheese plants that were built like Leprino in Lemoore.”

Another dairy blogger from Kings County, the Dairy Goddess, recently pointed to a September lawsuit against CDFA on the same issue.

“On September 4th a lawsuit was filed against the CDFA . We dairy farmers have asked three times for a fair price for our milk. Three times we have been denied. Secretary Ross is not following  the law. The law is very clear, “the price announced by CDFA must be in reasonable alignment with prices paid for comparable milk produced and sold around the country”. This law has not been followed. California dairy farmers have continued to be paid $2.00 per hundred weight less for our milk than our neighboring states. That is 20 million dollars we have been robbed.”
Some Hope

Despite all the bluster, a lawsuit and administration bashing – behind the scenes there appears to be some serious discussions and maybe a realization of how bad it is out there.

In the past few weeks a high level meeting said to include Ross, a representative of Governor Brown and leadership from dairy producers has offered a glimmer of of hope says Western United Dairymen  president Tom Barcellos of Porterville.”At least we are still talking” says Barcelleos whose industry group represents 60% of milk produced. “I think Ross became aware of some facts she did not know about”says another source.

One mega development in the past few weeks has been the bankruptcy filing of Fresno-based Zacky Farms who employs about 1000 workers but is, like the dairy industry, dependent on feed from the Midwest where drought has cut supply and raised the cost of feed to red ink levels. The collapse of a major player in California ag is sobering even as the number of dairy bankruptcies this summer has skyrocketed. Fresno bankruptcy attorney Riley Walter reported earlier this year.”This is just a bloodbath. In the past 18 months I have been worked on 58 dairy bankruptcies.”

Of course it’s not just formal bankruptcies you have to look at.Banks are feeling the pressure when strapped dairymen are not paying their bills and are calling some loans say industry leaders,forcing the liquidation of assets.

But rumors that a major dairy lender, Wells Fargo, has pulled the plug on the dairy industry are not true says Bill Hoover, Business Development Officer for Wells Fargo in Visalia.

“When a dairyman says Wells Fargo is getting out of the dairy business he may be referring to his own business, but not the business.”

“We still have a healthy dairy portfolio of over $1 billion dollars and much smaller portfolio that is not so healthy” adds Hoover.”For us it is definitely not going to be lights out on the dairy business.”

Hoover adds that they continue to work with some local dairymen who are downsizing but working to stay in the business while others are getting out, selling their land,often to farmers who want to plant trees.

Feed Issue

Asked why the California dairy industry doesn’t plant more of their own feed like Wisconsin instead of depending on a distant region for its feed supply both Contente and Barcellos point to the cost of land in the Valley and huge demand for more profitable crops.

“Where I am standing now, on field crop land I am surrounded by land that has been recently purchased and will be soon planted to to pistachios. It’s worth $15,000 an acre,far more than we can pay to grow more feed.”Ironically, a few decades ago it was dairies relocating from the LA Basin that pushed out cotton and field crop farmers.

Still some dairymen like Barcellos grow most of their own feed and with some experimentation other grains,canola and sorghum could help supplement  the increased corn being grown in California (up 30% this year) where unlike the Midwest, the drought has not been so severe. Still comparison to Wisconsin have to admit because they are in a federal system they get about $2 per cwt more for their milk. That brings us back to Karen Ross.

All the trouble in the livestock industry whether dairy or poultry is putting the hurt on local feed vendors and other suppliers like Western Milling in Goshen who supplies both Zacky and area dairies.The bankruptcy filing by Zacky indicates some $6 million owed to Western Milling .”All these problems spill over to the vendors” says Hoover, and the banks obviously. Don’t forget the economy. Don’t forget those cheese makers.To quote a phrase”Got Milk?”

Maybe that’s what secretary Ross may be seeing – the unraveling of the states’ largest industry if some relief is not offered, at least for a while.

California August Milk Production Falls 5.8%
Those hot August days helped reduce milk production in California in August by 5.8% compared to the same month in 2011 while across the US production fell 0.2% says USDA. The California reduction came despite the fact USDA said there were 10,000 more cows milking than a year ago, just opposite the conventional wisdom who said there was massive liquidation. The decline in production is welcome in that it appears to have improved prices. Cheese on the CME hit $2 Sept 20, the highest level since July a year ago. That’s the best news of the year for hard hit dairy operators who have faced both sky-high feed costs and low milk prices for much of this year. Also, corn is down from $8.40 a bushel to $7.40 in the past month.

 

Citrus Value Up In California
USDA reports that the value of citrus in California has improved in the past few years reaching $1.56 billion in 2011-12 compared to $1.32 billion in 2009-10 and $1.31 billion in 2010-11. In the past year bearing acreage has climbed to 269,400, up 2000 acres.By contrast Florida acreage is the lowest since  1959 to 495,100 acres.The value fell in the past year from $1.81 billion to $1.80 billion.

 
GMO Foods On Ballot
Proposition 37 would result in $1.2 billion in higher costs for farmers and food processors, higher prices for consumers and new regulations, according to an article published in Western Farm Press that refers to a new UC Davis study. The article is credited to the No on 37 campaign.
If passed, Proposition 37, which is on California’s November ballot, would require labeling of genetically engineered food.
Meanwhile grocer Whole Foods has endorsed the proposition setting up a November ballot battle.Meanwhile a French study suggested GM food is unhealthy.

Egg Shortage In Mexico Offer US Export Opportunity

NPR reports that  Mexico is suffering an egg shortage. An outbreak of avian flu this summer, in the heart of the nation’s egg-producing region, caused a drastic dip in production and led to huge price increases. While the crisis has hit the country’s poor hardest, all Mexicans are hurting for eggs, which are as crucial a part of the Mexican diet as the tortilla.
According to the country’s poultry industry, Mexicans eat more eggs, per capita, than anyone else in the world. On average, they eat more than 430 eggs a year, which is almost double U.S. annual consumptionn.
Prices jumped when producers were forced this summer to slaughter 11 million hens after an outbreak of avian flu in the central Mexican state of Jalisco.
The egg price spikes and shortages got so rough that President Felipe Calderon took to the airwaves, vowing to crack down on speculators and reduce tariffs on imported eggs.
The first shipments from the U.S. have already arrived at Mexico City’s huge wholesale warehouse and are helping to stabilize prices. But egg vendor Adrian Hernandez says his clients don’t like the U.S. imports; they tell him the American eggs don’t have any flavor, and that the yolks are pale.
Farmland Prices Rise
For people trying to enter the business of farming, the cost of land can be a significant hurdle. Prices to buy or rent California farm and ranch land broke records this year, according to the U.S. Agriculture Department. The average price of California farmland stands at 7,200 dollars an acre. Property that has access to irrigation commands the highest prices. The cost to rent farmland has also increased.
Researchers Test Robotic Berry Harvester
What has 10 arms and has intrigued strawberry farmers? The answer is a robotic harvesting machine being tested at the Monterey Bay Academy. The machine uses sensors to choose strawberries of the right color and size. Next, robotic arms gently pluck the ripe fruit from vines, and deposit the berries on a conveyer belt that drops the berries into containers. The machine remains in the experimental stage.
CFB contributed

Unhappy with the state regulated system that does not seem to listen to producers, the state’s dairymen centered in Tulare & Kings Counties are eying a big change that might or might not be a good idea ,shrugs Western United Dairymen president Tom Barcellos. WUD is sponsoring an “educational meeting”  September 20 to look at both sides of aligning the dairy industry with the federal program. Any change would require a referendum and Barcellos for one, is not advocating either way, just yet.

The decision to set such a meeting stems from the producer community’s discontent with CDFA’s latest minimal changes to the pricing formulas. “After the last hearing decision, a lot of producers have shown interest in learning more about federal orders and we wanted to give them an opportunity to gain knowledge about its potential impact on California while looking at the pros and cons”, said WUD’s Barcellos.

The 10 a.m. meeting at the Tulare Ag Center’s  Banquet Hall inside the Heritage Complex Building will feature Bill Wise, Market Administrator of the Arizona and Pacific Northwest orders, who will provide an overview of federal orders and highlight the differences with the California system. A significant portion of the meeting will be allocated for questions.

Barcellos says like this quandary, the dairy industry is divided on what approach to suggest to Congress who are being urged to pass a Farm Bill this year. This week local industry players including reps of each co-op met with local congressman Devin Nunes but failed to come up with a unified viewpoint on the best way to move forward on the Farm Bill.”We thought we were going to come out of the meeting with unified marching orders but it didn’t happen.”

In August – another group, the California Dairy Campaign (CDC) called on their Congressional delegation to put the Golden State in the Federal Milk Marketing Order system. CDC had also petitioned the California Department of Food and Agriculture last month to raise producer prices (as did WUD) to bring them more in line with surrounding states. CDFA did not adopt the petition so the producer organization is seeking an alternative.
CDC Executive Director, Lynne McBride tells Cheese Market News the organization would like to see something similar to a provision included in the 1996 farm bill. That plan would allow California to maintain its quota system and milk standards while participating in the Federal Orders. McBride says the measure was actually included in the ’96 Farm Bill but was never advanced at the state level and expired.
Barcellos says while producers remain upset with CDFA and Secretary of Ag Ross over their ruling,market conditions have improved in recent weeks due in part to “so many producers going out of business to the point there is dramatically less milk.”
Indeed, CDFA numbers show a 5% decline or more in milk volume(year over year) in some counties in July including San Joaquin,Madera, and Kings,all big volume counties. He also notes higher cheese prices that have bumped up even as the price of corn has come down some. ”I am more optimistic as we approach the end of the year.”
On the other hand don’t look for much expansion in the California dairy industry anymore predicts Barcellos.”Banks are more likely to lend you money to tear down your dairy and plant trees than to enlarge what you have.”

The latest survey, which was conducted during the last week of August and the first week of September, included the following commodities:
Oranges, Navel – California’s initial 2012-13 Navel orange forecast is 93.0 million 40.0-pound cartons, up 6 percent from the previous year.,but the same as 2010. Of the total forecast, 90.0 million cartons are estimated to be in the Central Valley.The forecast is based on the Navel Orange Objective Measurement Survey conducted in the Central Valley.Survey data indicated an average fruit set of 345 oranges per tree, with a diameter of 2.25 inches as of September 1, the five year average. Fruit set is above the five year average.
Tulare county groves had the smallest set pre tree in the Valley at 309 compared to 435 in Kern County.
Walnuts – The 2012 California walnut production is forecast at 470 thousand tons, up 2 percent from the 2011 production of 461 thousand tons. Bearing acreage is unchanged from 2011 at 245 thousand acres, resulting in a yield of 1.92 tons per acre. The forecast is based on the Walnut Objective Measurement Survey conducted duringAugust. Survey data indicated an average nut set of 1,375 per tree, down 1 percent from the 2011 average of 1,388. The San Joaquin Valley set is 1,120, up slightly from last year, and the Sacramento Valley set is 1,582,down 1 percent from last year. The percentage of sound kernels in-shell was 98.0 percent statewide.
Cotton – Upland cotton production in California is forecast at 495 thousand bales, down 11 percent from the 2011 crop, and up 5 percent from the August 1 forecast. Harvested acreage is estimated at 141 thousand acres, down 5 percent from the previous forecast. Yield is forecast at 1,685 pounds per acre, slightly down from last month. The forecast for American Pima cotton production was 630 thousand bales, up 1 percent from last month’s production and down 20 percent from the 2011 crop. Harvested acreage is forecasted at 224 thousand acres. Yield is forecast at 1,350 pounds per acre.
Rice – All rice production in California for 2012 is forecast at 47.3 million cwt., up 2 percent from the previous year. The yield forecast is 8,400 pounds per acre, unchanged from both last month and year. Planted and harvested acreages are forecasted at 568 thousand and 563 thousand acres, respectively. As of September 1, nearly all of the rice acres had headed.
Corn – Corn for grain production in California for 2012 is forecast at 958 thousand tons, up 23 percent from last year’s crop and unchanged from the August forecast. With harvested acreage forecasted at 180 thousand acres, the yield is 5.32 tons per acre. Compared with the 2011 crop year, harvested acreage is up 20 percent and the yield is unchanged.

by Jeannette Warnert

A desire to reduce fuel and water use is leading some farmers in the Central Valley to operate in new, more sustainable ways, reported Alice Daniel on KQED’s The California Report this morning.

For the five-minute story, Daniel interviewed Jeff Mitchell, UC Cooperative Extension specialist in the Department of Plant Sciences at UC Davis, and Dino Giacomazzi, a Hanford dairy farmer. These new farming systems, they said, aren’t straight forward and require a steep learning curve.

Sometimes they find themselves wondering, “What is happening out here?” Mitchell says. “And all your built-up experience base flies out the window.”

In the last seven years, Giacomazzi has dramatically changed the way he grows cattle feed. He has reduced the number of times he tills the field from 14 to just 2 times a year. Despite documented savings in fuel and reduction in dust emission, conservation agriculture has not been implemented widely in the Central Valley. Farmers like innovation, Giacomazzi notes, but many are reluctant to take the risk associated with changing long-held farming practices.

“It’s very difficult to make money farming,” Giacomazzi said. “You’re only going to get one shot each year to make it.”

Those interested in learning more about conservation agriculture systems are invited to the annual Twilight Conservation Agriculture field day, 4 p.m. Sept. 13 at the UC West Side Research and Extension Center. For more information, see the meeting announcement. Register for the free event here: http://ucanr.edu/TwilightReservation

 First Published in Fresno Business Journal

Fresno County Planning Commission will meet September 13 and is expected to approve construction plans for a pilot “Beet Energy” plant near Five Points. The long awaited project will break ground in October and will be up and running by June says proponent and area farmer John Diener.

“We’re going to do it” exclaims Diener, known as an ag innovator who will house the pilot facility on his Red Rock Ranch where the beets will be grown.

Sugar beets – once a major crop in Fresno County – is no longer grown for sugar because there is no processing plant anymore. Now, the California Energy Commission(CEC) is eager to explore ways to produce low-carbon motor fuels from plants and is funding this pilot facility that could lead to a much larger $200 million privately-funded biofuel production plant in Mendota.

In the planning stage since 2009, the integrated project includes the  Mendota Advanced Bioenergy Beet Cooperative who together with Diener have been awarded $5 million by the CEC to build the model plant expected to produce 1 million gallons of ethanol processed from 250 acres of energy beets. The beets – larger than common sugar beet -would be harvested all year round.  The project had already received a $1.5 million matching grant to examine the feasibility of the idea and now has the green light to move forward.

Sugar beets, that once covered over 300,000 acres statewide has now dwindled to 70,000 acres,all in Imperial County. The Central Valley once had 100,000 acres of sugar beets before Spreckels Sugar closed its doors after a 100 year run leaving farmers high and dry. California that once had 11 sugar mills is now down to one in the south state.

But now, a number of former Spreckels growers – members of the beet cooperative – hope the crop makes a comeback added to the growing number of plant materials harvested for low carbon fuels to help cut greenhouse gases.

Cut to Corn Ethanol Support

While the State of California appears to be backing away from full support for more ethanol made from corn,interest in cellulosic ethanol projects is gaining support. This week Gov. Jerry Brown signed AB 523 by Assemblyman David G. Valadao into law. AB 523 eliminates all future state funding for the production of ethanol derived from corn after July 2013. Currently, approximately $6 million is provided to a very small group of corn ethanol producers. AB 523 would redirect that money away from corn ethanol and towards other forms of renewable energy, including ethanol not derived from corn.

Beet Energy’s project consultant Jim Tischer of Fresno State says the benefits of turning beets into biofuel are attractive.”We’re talking about a much higher BTU content with three times the ethanol production per acre compared to corn.” The result is this biofuel would be much “greener’ than corn-based ethanol – lower carbon content than Brazilian ethanol as well he says. This will be important is meet the state’s low carbon fuel standard as it kicks in in coming years.

The integration that helps make the fuel “greener” includes four different technologies in one facility to produce ethanol, renewable biomethane, compost and fertilizer, and green electricity. The primary feedstocks will be sugar beets and almond orchard prunings. This integrated biorefinery combines the following renewable technologies: advanced ethanol production, anaerobic digestion, biomass gasification, water recycling, and wastewater treatment.

If  the pilot proves successful Tischer says investors and lenders are in the wings that could be eager to build the full-scale production plant that would covert both ag waste and beets into ethanol and other fuel, green electricity and other green products.

Multiple Green Products

The plant to be build in Mendota by 2016 would convert 840,000 tons of beets and 80,000 tons of almond clippings each year into 33.5 million gallons of ethanol; 1.6 million standard cubic feet of biomethane for making compressed natural gas; 6.3 megawatts of certified green electricity; and high-nutrient compost and liquid fertilizer.
For waste water treatment the processes could add 400 acre ft of treated water for irrigation of crop land.

The project could create approximately 250 direct and 50 indirect construction jobs in the Fresno County agricultural community of Mendota, along with 50 long-term jobs at the biorefinery and an additional 50 jobs for feedstock operations.

Help For Western Fresno County

“We estimate that the plant would mean about $110 million a year in economic activity to the area” says Tischer.The Mendota area has been particularly hard hit by years of recession and drought and would welcome some positive news that could provide both steady work and  help clean the air too.

A key factor in the feasibility is whether the plan to grow beets year round on 35,000 acres within a 60 mile radius of Mendota works out. “Our pilot project should determine if we can prove out year-round harvest” suggests Diener. To compete with corn that can be stored,beet growers contracted with the plant would need to keep feeding the plant with about  4000 tons a day.Winter months are typically when beets grow in the Valley. Beets grown too far away would face high transportation costs making the facility less efficient.

Already the beets that will be used in the pilot refinery have been planted.The whole beet plant can be processed.

California is not the only place where the experiments with beets for biofuel is going forward. A mothballed corn ethanol plant  in North Dakota is being converted this year to accept 12,000 acres of beets near Fargo.

Other Valley companies are experimenting with varied crops to make biofuel including sorghum, switchgrass and South American root crops by Aemetis Inc who own a 60 million gallon ethanol facility in Keyes and say one root crop could generate 2000 gallons per acre of ethanol according to a study.

The Olive Growers Council of California  announced reaching agreement this past week with the major black ripe olive processors for prices to be paid to table olive growers for their 2012 olive crop.
Following several weeks of negotiations with OGC, Bell Carter Olive Company, Corning and Musco Family Olive Company, Tracy both agreed to the following price schedule that mirrors what growers received for the short crop of 26,566 tons harvested in 2011. The current industry estimate for the 2012 crop ranges from 85,000 to 95,000 tons.
“Although the growers had hoped for improved prices for medium, large and extra-large Manzanillo olives because of minimum inventories, the industry has an imbalance of both small olives and canning size Sevillano variety,” said Adin Hester, President of the Olive Growers Council. “In the final analysis, we are pleased the processors recognize the importance of providing a positive vision of California’s table olive future by maintaining stable prices for growers as we deal with a market that is being greatly impacted by imported sliced olives for food service along with government aid programs that encourage foreign countries to produce and sell olives in the U.S.”
The 2012 price schedule represents some of the highest paid in industry history at $1250 for Extra Large Manzanillo olives.
Unfortunately, for growers to survive financially, they need to produce good yields per acre on a consistent basis which has not been the case. Within the last six years, growers have had two successful crops and four failures thanks to weather related issues….frost damage to buds, hot weather during bloom and rain during pollination.
Of the two table olive districts, Northern California and the Central Valley, there is a strong crop in the north and modest crop in the south. As the industry approaches harvest in September, there is currently concern that adequate labor will be available to hand harvest the 2012 table olive crop.
The latest USDA Olive report shows food service sales of California olives is up 15.66%.

California Farmers Plant 20% More Corn
USDA says California’s 2012 corn for grain production forecast is 958 thousand tons, 23 percent above 2011.With the Midwest drought the state’s farmers are expected to reap record prices with the harvest to come this fall.
The harvested acreage is expected to total 180 thousand acres, 20 percent above a year earlier. The forecast yields, at 5.32 tons per acre, are 3 percent above a year earlier.
The U.S. corn for grain production is forecast at 302 million tons, 13 percent below 2011. Widespread drought and extreme temperatures during June and July have had an adverse effect on the 2012 corn crop. Based on conditions as of August 1, yields are expected to average 3.45 tons per acre, down 16 percent from last year. If realized, this will be the lowest average yield since 1995. Growers expect to harvest 87.4 million acres of corn for grain, down 2 percent from the June forecast, but up 4 percent from last year.

Recall Of Romaine Lettuce

Salinas-based Tanimura & Antle Inc. has voluntarily recalled a single lot of romaine lettuce because it may be contaminated with Escherichia coli O157:H7 bacteria (E. Coli O157:H7).
The affected product is limited to Tanimura & Antle Field Fresh Wrapped Single Head Romaine. This product is packed in a plastic bag with the UPC number 0-27918-20314-9 and may have a Best Buy date of “08 19 12″. The product was available at retail locations Aug. 2 – Aug. 19, 2012. A total of 2,095 cases of potentially affected product were distributed throughout the US and Canada starting on August 2.

Feds Close Hanford Calif. Slaughterhouse After Abuse Video

The AP reports that” Federal regulators have shut down a Central California slaughterhouse after receiving undercover video showing dairy cows – some unable to walk – being repeatedly shocked and shot before being slaughtered.
Officials with the U.S. Department of Agriculture, which inspects meat facilities, suspended operations Monday at Central Valley Meat Co. in Hanford, Calif., which slaughters cows when they lose their value as milk producers.
The USDA received hours of videotape Friday from Compassion Over Killing, an animal welfare group, which said its undercover investigator was employed by the slaughterhouse and made the video over a two-week period in June.
“USDA considers inhumane treatment of animals at slaughter facilities to be unacceptable and is conducting a thorough investigation into these allegations,” said Justin DeJong, spokesman for the Food Safety Inspection Service.”
On Wednesday Aug 22 it was reported that USDA believes there was no tainted meat from ‘downer animals” that entered the food supply. The meat packer supplies the USDA school lunch program. In another development, the fast food chain InN’Out said they would withdraw a contract with Central Valley Meat to supply them.
Local ag officials said the company appeared to be assumed guilty before the investigation was complete.But USDA said the video showed a full investigation was warranted before the plant is allowed to use their stamp of approval.
One ag official allowed that no one condones mistreatment of animals  but notes that the group that shot the video is committed to convince consumers to stop eating meat.
The issue was further clouded by the fact that two USDA inspectors were stationed at the plant who did not report the mistreatment.
Animal care expert, Dave Daley, PhD, Associate Dean for the College of Agriculture at California State University and an active member of the cattle community issued the following statement.
“The vast majority of cattlemen stand firm in adhering to the absolute best animal care and handling guidelines established by veterinarians and other experts. We do not condone any mishandling of livestock on the farm or ranch or in the packing facility. In fact, we firmly believe that those knowingly and willfully committing any abuse to animals should not be in the business – period. The actions depicted in these videos are disgraceful and not representative of the cattle community.”
The closure of the packing plant further complicates the life of stressed out dairymen who have been forced to cull their cows in increasing numbers due to high feed prices. “Dairy operators who cant afford to feed their animals are being put in a tough position” say Kings ag commissioner Tim Niswander. ”Maybe they need to let them out to pasture.” He says slaughterhouses bid at auction on lots of cows and since Central Valley Meat is not bidding now – that lowers the price of cows sold at the auction.The Kings County closure leaves only one packer in Fresno open nearby in the heart of dairy country- home to 1.6 million cows.

UC’s First Center Pivot Irrigation System
In a clear sign of changing times in California agriculture, the University of California dedicates its first full-sized center pivot overhead irrigation system at the UC West Side Research and Extension Center during the Twilight Conservation Agriculture field day at 4 p.m. on Sept. 13. The center is at 17353 W. Oakland Avenue in Five Points.
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Overhead irrigation systems, such as center pivot systems, are the most prevalent form of irrigation nationwide; however, they have not been widely adopted in California to date. Recent technological advances in overhead irrigation – which allows integration of irrigation with global positioning systems (GPS) and management of vast acreage from a computer or smart phone – have boosted farmers’ interest in converting from gravity-fed surface irrigation systems, which are still used on 5 million acres of California farmland.
“We see tremendous possibilities for overhead irrigation in cotton, alfalfa, corn, onions and wheat production,” said Jeff Mitchell, UC Cooperative Extension specialist in the Department of Plant Sciences at UC Davis. “There is also great potential for overhead irrigation in California’s $5 billion dairy industry for more efficiently producing feed crops like alfalfa, corn and sorghum.”
The new system at the West Side Research and Extension Center, valued at about $100,000, was donated by Reinke Manufacturing of Hastings, Neb. Reinke will also sponsor the installation of its OnTrac irrigation monitoring system, which will give farmers and the public a real-time, online window of observation on crops growing and being irrigated by the new center pivot.
To begin with, the center pivot will irrigate an 8-acre half-circle of alfalfa and an 8-acre half-circle of cotton. All aspects of production – including irrigation system performance, weed control, fertilization, soil salinity and economic viability – will be monitored by a diverse team of researchers from UC Cooperative Extension, Fresno State University and UC Davis, plus farmer cooperators and industry members.

Crop Updates: Wine Grape Crop Up 9%
Apples – California’s 2012 apple production is forecast at 140
thousand tons, unchanged from the 2011 crop.
Grapes – The California 2012 all grape forecast is 6.60 million
tons, down slightly from last year’s crop. California’s wine-type
grape production is forecast at 3.70 million tons, and
represents 56 percent of California’s total grape crop. It is up 9
percent from the 2011 crop. California’s raisin-type grape
production is forecast at 1.90 million tons, 29 percent of
California’s total grape crop. The raisin-type grape forecast is
down 13 percent from last year. California’s table-type grape
production is forecast at 1.00 million tons, down 3 percent from
the previous year. California vineyards saw warm and dry
growing conditions this spring. Mildew and European
Grapevine Moth pressure have been low this year. Bunch
counts for the Thompson grape variety were down significantly
from 2011.
Pears – The 2012 California Bartlett pear crop forecast is 170
thousand tons, down 13 percent from the 2011 crop. Bartlett
harvest began in the Sacramento Valley by mid-July. Quality
and sizing were reported to be good with no unusual pest or
disease pressure reported. The forecast for other pear types is
50.0 thousand tons, down 12 percent from the 2011 crop.

More dairymen are throwing in the towel this month as the price of feed,their banks,feed suppliers and their checking accounts all tell them the time as come.

Tulare County dairyman and Western United Dairymen president Tom Barcellos expects “double digit bankruptcy filings” by local dairymen in coming weeks as the feed price crunch caused by the Midwest drought hits the credit crunch at home this summer.

“Dairymen are getting out of the business – sending their cows to slaughter as fast as they can” says Barcellos whose family has been milking cows on their ranch near Porterville since the 1940s.

Barcellos ships milk every day to his co-op, Land O Lakes in Tulare,one of the largest milk receiving locations in the nation.”In the past week Land O Lakes has been receiving 1.1 million pounds of milk less every day than a week ago.That’s not the summer heat,which reduced milk volume earlier this summer – that’s due to cow liquidation.”

“People are exiting this business in droves.I would say catastrophic just about describes the situation.” Tulare /Kings Counties is the most productive dairyshed in the US, accounting for about 38% of the milk in California.

Wipeout/Bloodbath

Hanford dairyman Joaquin Contente says “everywhere I go around my area I see vacant dairies or places being put up for sale. These are my neighbors – people who have been in the business a long time, some three generations. Now they just want out. It’s the big wipeout.”

Fresno bankruptcy attorney Riley Walter agrees.”This is just a bloodbath. In the past 18 months I have been worked on 58 dairy  bankruptcies.Remember that does not tell you the whole story when you include going into receivership with your bank or voluntary dissolution”, a sale or auction for example.”These are all ways dairymen are getting out.” Add to this that the pace of filings” has increased dramatically in the past few weeks” says Walter who has been doing this “for a very long time.”

The typically volatile dairy business was made worse this Spring with a surge in production resulting in a glut of milk that further lowered prices. At Land O Lakes-Tulare they retired 17 dairies in April to try to right-size the milk supply.

Now the issue is feed costs that have surged this summer taking not just corn but soybeans, other grains and hay up to to levels not seen ever. ”There is not enough money from their milk check to pay the feed  costs” exclaims California Dairies Inc. CEO Andre Mikhalevsky.

Corn’s Impact…It Sucks

USDA says this week that corn prices on the cash market have soared and the season average price for 2012/13 is now projected at $7.50 – $8.90 per bushel, a substantial increase from July’s forecast $5.40 – $6.40 per bushel.

Back in 2009 banks and feed companies would back dairymen up, carry them for a while to tide them over. Dairymen had equity but in many cases after the tough years of 2009/2010 – that’s not true any more explains Barcellos. They still owe money and banks and feed companies can’t wait any more this time.

In a domino effect that leaves the lender – whether in the feed, supply or finance business – holding the bag on some of this debt.

“I am doing OK because I grow most of my own feed” adds Barcellos “but I also supply some of my neighbors and I hope I get paid.”

In the relatively small business community local feed companies are being forced to say no to long time customers. “I would say this is the worse I have ever seen it with dairymen going out of business, farms on COD and lots of bankruptcies.I don’t know what to tell you except it just sucks” laments Visalia grain dealer Kevin Kruse.

Attorney Riley Walter says from the feed companies point of view the super volatility of the corn market is making their business more risky.”I had a feed guy tell me what they have to face.They call Omaha and order a 100 unit train of corn and the guy says wire me $4 million. By the time the corn is shipped and sold here the local grain company is waiting 70 days before he even starts to collect.Even if he is sympathetic to the plight of his dairyman customer,he has a lot tied up.”

Driving around the backroads of Tulare County”you definitely see depopulated dairies “says UC farm advisor Jim Sullins. “It’s mostly the little guys who can no longer hang on.”

Others says what has changed is that “it’s the big guys going out now.”

A prominent multi-location dairy operator Alvin Souza of Tulare, filed for bankruptcy this Spring making news because he employed nearly 200 workers.

Sources says four prominent dairymen declared bankruptcy just last week but their names cant be verified. Yesterday, an auction of an 1800 cow Hilmar dairy took place because the farmer “had no feed and no money to buy it” says a knowledge source.

Sullins puts some of the blame for high corn prices on the mandate to make ethanol,a refrain heard across the dairy belt. Some 156 House of Representatives members wrote EPA’s Lisa Jackson recently to reduce or eliminate the fuel ethanol mandate while corn supplies are tight.

Western United Dairymen executive director Mike Marsh says in the tough 2009/10 period about 20% of existing dairies in the state went out of business.”We cant afford to lose more – endangering the infrastructure of the industry that is a $63 billion business in the state.”
WUD has filed a petition for emergency relief from CDFA Aug 6 including a a fifty cent per hundredweight increase on all classes of milk. In addition, WUD proposes a permanent exemption from the whey component on the first million pounds of bulk milk produced monthly. Marsh says he is waiting for a reply from state ag secretary Ross.”We can’t wait until September for a hearing“ argues Marsh.

In a letter to Ross, Joe Augusto, president of the California Dairy Campaign (CDC), urged CDFA to schedule the emergency hearing, saying the previous decision failed to address the immediate needs of dairy producers. “The fact that the 4b formula undervalues milk has led to a loss in revenue of more than $200,000 for the average 1,000-head dairy in our state over the last 12 months.”

“Already this year, more than 65 dairies have closed their doors due to the fact that dairy producer prices do not cover historically high production costs,” he continued. “In 2009, the worst year many can recall, 100 dairies
closed their doors. If closures continue at this rapid pace, 2012 will take an even greater toll on dairy producers if action is not taken by CDFA to restore fairness and equity to our dairy pricing system. Dairy producers are unable to pass on the record high feed costs that have resulted from the nationwide drought so it is critical that CDFA take emergency action to raise the price of all classes of milk to prevent more dairies from closing.”

Reis Soares, Soares Dairy, Chowchilla, Calif. also wrote in support of the petition, pleading for CDFA to consider WUD’s petition for an emergency hearing.

“I am a first-generation dairy producer and have been dairying for 28 years,” he wrote. “Dairying in 2009 was about as devastating as I could have ever imagined until 2012. I don’t have to tell you what has happened to our grain/feed costs, as you are fully aware of the nation’s worst drought in decades. In 2009 I borrowed on our farm in order to be able to feed our cattle. I refinanced our farm for more than what I originally paid for it just to stay in business. I guess you can say I bought our farm twice now. The equity of our farm is gone; the equity in our cattle is gone; so we have nothing left to borrow on.

Cow Culling Up

According to USDA/AMS, weekly estimated dairy cow slaughter turned substantially upward in July. Higher apparent culling, combined with higher feed prices, leads to a reduced 2012 herd size estimate of 9,215 thousand head in August.

While herd size is expected to be slightly higher on a year-over-year basis compared to 2011, the U.S. dairy herd is forecast to contract to 9,110 thousand head in 2013 says USDA.

This week the lower milk volumes were being felt in the market and milk prices on the CME soared to near $20 per cwt for October.But the lag time for California dairymen to get the relief may be too long for some – 60 to 90 days by some estimates.” We used to think if we could get $15 milk we would be OK.Now we don’t know if $20 milk will pay the feed costs worries Marsh, with some predictions of $9 to$12 corn.

Big Year For Olives

The 2012 California olive crop forecast is 180,000 tons, up 153
percent from last year’s crop of 71,200 tons. Bearing acreage is
estimated at 44,000 for a yield of 4.09 tons per acre. Of the total
production, an estimated 94,000 tons will be utilized for canning,
and the remaining 86,000 tons are expected to be harvested for oil
or specialty products.

The California Olive crop outlook is looking positive. Growers are
anticipating a good crop, especially after last year’s poor crop.
Weather conditions during the bloom period were generally good.
In the north, there was a good set. Producers thinned their crop to
allow the remaining fruit to grow bigger. In the south, there was an
initial good fruit set, but after Easter, extreme weather events
resulted in some false bloom. This decreased the set slightly, but
will permit the fruit to grow larger.

The Manzanillo and Sevillano olive varieties are expected to
produce 47 percent and 9 percent of the total olive crop,
respectively. The remaining 44 percent is expected to come from
all other varieties.

World Processing Tomato Crop Down

A California tomato grower report says world processing tomato crop is expected to be 2.4 metric tons lower than last year even as demand for the product per capita increases.

While the California processing tomato crop is up 6% from last year at 11.7 mm metic tons China is down 26%,Portugal down 11% Spain down 19% and Italy is down 12% this year. While some areas problems are  weather relate Europe’s finances appear to be a factor too.

The world’s farmers are producing 35.2 metric tons withCalifornia suppling almost third of that. On source says the world could use 40 mm metic tons.

Almost all US tonnage come form California with Fresno County at the top based on  contracted planted acreage for 2011 with
92,000 acres. Yolo, Kings, San Joaquin, and Merced County make up the remaining top five counties for contracted planted acreage, respectively. These counties make up 77 percent of the 2011 total
contracted planted acreage for California says USDA.

USDA says growers contract with processors to process red-ripe tomatoes. Although many firms manufacture pulp-based products, such as stewed and diced tomatoes, most initial processing is by firms that manufacture tomato paste, a raw ingredient. Paste is manufactured and packed in bulk containers- large bags set into boxes and barrels-and stored for use up to 18 months later. This raw ingredient is distributed under contract or sold to remanufacturing firms that add water, spices, etc. to make retail and foodservice packs of soups, sauces, catsup, and paste.
Americans consume three-fourths of their tomatoes in processed form. U.S. consumption of processed tomatoes began a steady climb that accelerated in the late 1980s with the rising popularity of pizza, pasta, and salsa. ERS estimates suggest the largest processed use of tomatoes is in sauces (35 percent), followed by paste (18 percent), canned whole tomato products (17 percent), and catsup and juice (each about 15 percent). ERS estimates suggest that about one-third of all processed-tomato products are purchased away from home at various foodservice outlets (pizza parlors, for example).

Lower Tree Fruit Volume Boosts Late Summer Prices.
With the California back-of-the-napkin tree fruit estimate now below 40 million cartons, farms are not getting that late season drop in prices say observers. Storms took their toll on the crop this Spring and farmers have reduced their acreage after years of oversupply that persistently hurt prices. For many years, 50 million cartons was the norm, says Wayne Brandt of Brandt Farms in Reedley, he tells the Produce News.
The latest USDA market report shows nectarines, peaches and plums selling for  $16 to 18  a carton, a profitable margin for most growers.In the depth of the recession and overproduction – cartons  sold for as little a $10,not covering the picking costs, growers said.
Also a plus,continued export demand for California fruit.
A June USDA report said “ Mid-April hailstorms are partly behind the anticipated lower production in California this year. While some California peach growers were more heavily impacted by the hailstorms than others, some fruit loss due to the hailstorms would have occurred anyway during the usual fruit thinning stage. Others also attribute part of the production decline in California to reduced bearing acreage over the last 5 years, the result of removing less performing acreage or switching to other more profitable crops such as citrus, almonds, and walnuts. California is the dominant producer of peaches across the country, accounting for about half of the fresh market crop,
California produces almost all the the nectarines and plums.