Category: Business

-April 28,2023-

Eggs take a deep dive

Egg prices took a deep dive in the past week selling wholesale in California for under $1 a dozen say USDA.. That is down from $1.50 a dozen a week ago and down from $3 a dozen this time last year. Wholesale prices don’t reflect what you are paying retail but earlier in April Costco was selling 2 dozen cage free eggs for $5.99 and Walmart has a current price of $2.67 a dozen.Target is at $3.59 a dozen. Egg prices in California were routinely above $7 a dozen a year ago. A bird flu epidemic helped boost prices when millions of egg laying chickens died.Helping to lower prices now is the return of the flock as well as lower feed costs.

CPORN FUTURES ARE DOWN THIS SPRING-BULLISH FOR LIVESTOCK INDUSTRY

Used car prices down 4%

Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 2.7% from March in the first 15 days of April. The midmonth Manheim Used Vehicle Value Index dropped to 231.7, which was down 4.0% from the full month of April 2022.

 

-April 21,2023-
WASHINGTON – The Bureau of Reclamation today released its April 24-Month Study, which includes an increase to downstream flows from Lake Powell to Lake Mead of up to 9.5 million acre-feet (maf) this water year (Oct. 1, 2022 through Sept. 30, 2023).

Glen Canyon Dam’s annual release volume for water year 2023 was initially set at 7.0 maf, based on the August 2022 24-Month Study, and is now projected to increase to up to 9.5 maf because of high snowpack this winter and projected runoff in the Colorado River Basin this spring. The actual annual release volume from Glen Canyon Dam is adjusted each month throughout the water year and is determined based on the observed inflow to Lake Powell and the storage contents of Lake Powell and Lake Mead.

While this water year’s projections are above average, the Colorado River Basin is experiencing severe drought conditions and system reservoirs remain at historically low levels. In response to this historic drought, Reclamation recently released a draft Supplemental Environmental Impact Statement to potentially revise the current interim operating guidelines for the near-term operation of Glen Canyon and Hoover Dams.

“This winter’s snowpack is promising and provides us the opportunity to help replenish Lakes Mead and Powell in the near-term — but the reality is that drought conditions in the Colorado River Basin have been more than two decades in the making,” said Commissioner Camille Calimlim Touton. “Despite this year’s welcomed snow, the Colorado River system remains at risk from the ongoing impacts of the climate crisis. We will continue to pursue a collaborative, consensus-based approach to conserve water, increase the efficiency of water use, and protect the system’s reservoirs from falling to critically low elevations that would threaten water deliveries and power production.”

Lake Powell is currently operating in the Lower Elevation Balancing Tier, and Reclamation is required to “balance the contents” of Lake Mead and Lake Powell, as outlined in Section 6.D.1 of the Colorado River Interim Guidelines for Lower Basin Shortages and Coordinated Operations for Lake Powell and Lake Mead (2007 Interim Guidelines).

Reclamation utilized the Colorado Basin River Forecast Center’s (CBRFC) April forecasts and other relevant factors such as Colorado River system storage and reservoir elevations to make balancing adjustments to Lake Powell operations.

The CBRFC’s April through July unregulated inflow forecast for Lake Powell is 11.3 maf (177% of average) — an increase of 3.3 maf from March, which was 125% of average. Reclamation’s April 24- Month Study projects Lake Powell’s elevation at 3,576.50 feet at the end of the water year (Sept. 30, 2023). This is approximately 40 feet higher and 2.74 maf of additional storage than projected in the August 2022 Most Probable 24-Month Study, which was used to set the annual operations for Lake Powell and Lake Mead.

For the past several years, Reclamation has had to take drought response operations, including modifying monthly releases from Glen Canyon Dam, to keep water in Lake Powell and help prevent it from dropping to critically low elevations.

The higher annual release volume for the remainder of this water year is inclusive of water previously kept in Lake Powell:

480,000 acre-feet of water kept in Lake Powell by reducing the annual release volume in water year 2022 from 7.48 maf to 7.0 maf
523,000 acre-feet of water held back this winter to increase Lake Powell elevations during the lowest point in the water year until post-runoff months of May through September
Reclamation has already increased the monthly release volume for April from Glen Canyon Dam from 552,000 acre-feet to 910,000 acre-feet to be better positioned to release up to 9.5 maf by the end of the water year (Sept. 30, 2023). Monthly releases for May through September will also be adjusted as needed

-April 21,2023-

March to April flips the rain & snow switch

Like someone flipped a switch, the calendar change from March to April also suddenly turned the water spigot off over the South Valley. Consider the Giant Forest weather station at 6000ft that went from 50 inches received as of March 1 to 85 inches at the end of the month. But after April 1, Giant Forest has seen under an inch. Likewise in Hanford where we saw 4 inches in March and none in April so far – and none on the horizon. For the water year Giant Forest has received more than double the annual average.

Temps to reach the mid 80s

NWS Hanford says by Saturday afternoon maximum temperatures across Central California will be seven to nine degrees above normal for this time of year – in the mid 80s.The heat will likely speed up snow melt in the Sierra where temps could reach into the 60s. On the Kings River flows continue to rise as releases from Pine Flat Dam increase. A Flood Advisory has been upgraded to a Flood Warning. Rivers are swift, cold, and dangerous. Stay out of closed rivers for your safety and the safety of first responders.

To make room, releases from Pine Flat are continuing with the reservoir down to about 55% of capacity.

After diversions by the upper districts, flows past the Kingsburg area to Highway 99 continue to be about 9,200 c.f.s. There continues to be localized flooding in low-lying areas along the river, particularly as far downstream as parts of the Kingsburg area.

How much water?

At the Kings River Water Association meeting this week, it was reported that inflow to Pine Flat Reservoir has been varying modestly for the past couple of weeks, generally between about 5,500-6600 c.f.s. as a result of residual lower elevation runoff and the early phases of the snowmelt runoff. Snowmelt runoff is expected to pick up over the next two weeks. KRWA believes reservoir inflow will likely begin to balance current releases by May 1.

The Department of Water Resources’ current forecast for the Kings is for April-through-July peak season runoff to be, on a “most probable” basis, 3.24 million acre-feet, 269% of average. It could range upward to more than 3.6 million acre-feet.

 

Got lake – need boat

Kings County sheriff officers need to make their way around Kings County and given the flooding of over 40 thousand acres, the county’s first responders say they need a boat. This week the Board Supervisors agreed to buy an inflatable rescue boat. The current county rescue boat has limited load capacity. The sheriff’s rescue unit got a ride with the Tulare County Sheriff’s Office- who purchased two Inmar 14-foot Inflatable boats recently. The Water Rescue Unit of Kings has had the opportunity to observe and operate one of them. Their Inmar boat runs a 25 HP outboard motor which stays on plane and handles safely. This boat also has a higher cargo/weight capacity and is larger overall. It will be a 14-foot inflatable boat.

Public assistance federal aid approved for Kings County

Kings County has been put on the list by Governor Newsom to be eligible for federal aid as we have weathered more than a dozen atmospheric rivers beginning in December and experienced major flooding.

On April 4, President Biden approved the Presidential Major Disaster Declaration. FEMA assistance is now available to affected California communities following the storms in February and March, including the following:
•Individual assistance: Assistance to individuals and households to repair or replace damaged property. Kings County is still not on this FEMA list although Kern and Tulare are.Expect it to be added.
•Public assistance: Assistance for emergency work and the repair or replacement of disaster-damaged facilities.Counties added as of April 14, 2023: Alpine, Fresno, Kings, Merced, Sierra, Kern, Mariposa, San Benito, Tuolumne and Trinity counties.

These funds are available for people affected after the fact. Kings officials want is funding to help protect the area by raising the levee around Corcoran and Sacramento officials say they are on the same page and looking to identify a pot of money to do it.

Surfs up dude!

Surf Ranch Pro event to be held at the surfing ranch near Lemoore is set for May 27-28, providing a venue to attract tourists here in the mid summer.The World Surf League will gear up for the 6th stop on the championship tour to be held in Kings County. The well publicized event could draw 5000 to 8000 spectators according to reports.

The 155-acre compound, founded by world-class surfer Kelly Slater, has created a dedicated space for surf generation systems that will host up to six events per year while providing innovative surf lessons.

A first in California, the state now has its first man-made wave pool equipped with musical performance venues, vending spaces, training rooms, camping site and state-of-the-art recreational facilities. Construction is not yet complete and is estimated to wind up by 2026 and will feature seven structures including a wave operations building and a gassed-up training center. The best part is that it will all be open to the public.

Three Rivers whitewater rafting season could last through August

All this water is good news for whitewater rafters who visit the Kaweah River each spring – often for a river run that lasts only a few weeks. Not this year where the season has already started as of April 1 and will likely last though August says Sequoia Adventures, one of two locally-based rafting firms who are operating this year.

Tours are being offered for both beginners and more adventurous rafters who would launch from higher up the river.To hear more call (559) 561-4413. The other company is Mountain Descents (559) 769-5096.

Local table grape advisor

The UC Cooperative Extension has hired a new Viticulture Farm Advisor, Joy Hollingsworth, who will be serving primarily table grape growers in Tulare and Kings Counties. n. Joy can be reached at 559-684-3313 or joyhollingsworth@ucanr.ed

Photo: Mountain Descents
Kaweah rafting will go through August this year

FOCUS ON KINGS COUNTY

-April 12,2023-

It’s around April 15 and all thoughts turn to our pocketbooks, So what do  the latest economic trends show us? Let’s go down the list as we wind up the first quarter of 2023.

CAR SALES: Compared to last year, new sales last week were up 10%, and used sales were down 6% according to an April 7 Cox Automotive report.

TAX REFUNDS: TAX REFUND AMOUNTS ARE DOWN SUBSTANTIALLY 9% less has been disbursed compared to last year, and the average refund is down 11% according to the IRS.

Mortgage Rates Down US 30-year fixed mortgage rates fell for a fifth-straight week to the lowest level in two months, shoring up demand to buy a home.

The contract rate dropped 10 basis points to 6.3% in the period ended April 7, Mortgage Bankers Association data showed Wednesday. The group’s index of mortgage applications for the purchase of a home increased 7.8%, the most since mid January.

INFLATION DOWN

The latest CPI snapshot shows inflation falling to 5%,

GAS PRICES: AAA on April 6 writes that OPEC SURPRISE LEADS TO HIGHER PUMP PRICES

OPEC’s announcement last weekend that it will cut production by over a million barrels per day starting in a month took the oil market by surprise. In response, crude immediately surged well above $80 a barrel, although it has since struggled to stay above that mark. The cost of oil accounts for more than 50% of what we pay at the pump, so drivers may not catch a break at the pump any time soon.”

According to new data from the Energy Information Administration (EIA), gas demand increased slightly from 9.15 to 9.3 million b/d last week. Meanwhile, total domestic gasoline stocks decreased substantially by 4.1 million bbl to 222.6 million bbl. The industry has cut supply as spring demand increases. Increased demand amid tighter supply has contributed to pushing pump prices higher. If demand continues to rise, pump prices will likely follow suit.

Locally, 3 gas stations in Lemoore are still below $4 gallon. In the competitive  gas market in Lemoore, the Utah-based  Maverick’s chain will build a new fueling station off 198 at 12th.

NEW HOMES: The pace of new home construction is up slightly in the past few years but still far below the numbers pre- pandemic.Through April 11 this year there have been 69 new homes permitted. For the same period in 2019 and 2020 Kings builders permitted over 112 new homes each year according to Construction Monitor.

MILK PRICES DOWN It may be good news at the breakfast table but for Kings County ‘ s largest industry-the production of milk the news is not so good. The latest  milk powder price is down to $1.12 per pound.

Central Valley staple dry milk powder prices in the past year have helped diary co-ops like California Dairies Inc in Visalia, one the of the nation’s largest producers-enjoy record margins. Now all that is gone with the price back to just over $1 a pound as the nation’s milk price  has come back to earth.

-April 8,2023-

Northern California rainfall trend finally heads down

All of California is catching a break from this winter’s incredibly stormy pattern as we move into the second week of April. In Northern California where rain is more common the next few weeks look relatively dry. The latest Feather River precipitin forecast is below average after a record March of multiple Atmospheric River storms. For that matter, looks like almost all of middle California will have a dry month according to this GFS projection ( see map).

 

 

Truck stops are hot commodity

WSJ: The onramp for investors looking to get into truck stops is getting crowded. Oil giant BP is trying to fend off a second suitor for TravelCenters of America, with fuel-station operator ARKO looking to top BP’s offer of $86 a share with its own unsolicited bid of $92 a share. TravelCenters has rejected the higher bid and says investors will vote on the matter on May 10.
Traveler Centers have multiple locations in the San Joaquin Valley as does Pilot Flying J who was recently acquired by by Berkshire Hathaway from the Haslam family.

In Lemoore, the Utah company Maverick is building a new fuel center and convenience store along Hwy 198.

 

Costco same store sales down

WSJ:Costco’s same-store sales fell 1.1% in March, the first monthly decline in nearly three years.

 

 

 

Milk powder price down to $1.12

Central Valley staple dry milk powder prices in the past year have helped diary co-ops like California Dairies Inc in Visalia, one the of the nation’s largest producers-enjoy record margins. Now all that is gone with the price back to just over $1 a pound as the nation’s milk price  has come back to earth.

-April 8,2023-

Tulare County Association of Governments (TCAG) collects sales tax based on Measure R funding voted in by the county’s voters.

The latest snapshot appears to reflect a local economy that continues to generate more revenue year after year at least to date. Despite that, year after year TCAG’s budget forecasts reflect a flat expected income stream as the planners are conservative in their estimates.In 2018/19 TCAG estimated March revenue of $1.8 million and only edging up slightly each March over the next four years (see chart).

As you can see from this chart the income stream this year in March from Measure R is $3.7 million – double the 2018/19 budget forecast and wildly more than forecast for March 2023 ($2 million) indicated in red on the chart.

The latest audited report says fiscal year 2022/2023 Measure R allocations have been received, payment requested, and distribution made through March 2023. The allocation for the month of March is $3,717,564. The 22/23 fiscal year to date amount is $38,878,471 compared to $36,787,676 for this same period last year which represents a 5.7 % increase.

Governments are always trying to estimate income for their jurisdiction knowing that sales tax is their most important factor. The big worry – don’t overestimate your income.Here, the opposite appears to be true.The good news -so far – so good – locally.

 

Visalia will update estimates 

After implementation of a new tax rule on sales from e commerce facilities  and the COVID pandemic, sales tax annual growth for last fiscal year increased to 12% and is projected to be the same this fiscal year. These numbers are inflated due to the Stay- Home-Order and the Federal Government stimulus money. It is widely acknowledged that during the Stay-Home-Order, Visalians used vacation, entertainment, and stimulus money for home improvements and taxable purchases.

City staff last year  projected the sales tax growth to continue over the next two years but at a much smaller pace. This growth will build upon the increased base line inflated from the higher growth experienced in this fiscal year and the last. Staff is projecting salestax to grow at a rate of 2% annually, which is $43.6 million in FY 2022/23 and $44.4 million.in 23/24.

Now later this month, Visalia staff will revisit those estimates.

 

Tulare offers sales tax report

 

In February Tulare City Council  received a presentation showing these two charts.

 

The first chart show the city’s sales tax has increased from over $10 million to $14.8 million but seems to be  slowing now.

 

The second chart shows comparison numbers . The chart shows Visialia with high numbers in the twenties -now down to around a 4.5% increase during the last quarter of 2022-still a high number  from a high base .

 

The Wonderful Company filed suit against Tulare County in July 2020 over issuance of building permits to longtime grower ARO Pistachios, who had been purchased by the Assemi group looking to expand operations in Terra Bella. Wonderful claimed  the county  permitted the expansion illegally – alleging they had not followed the California Environmental Quality Act (CEQA). 

 

The Assemis and Resnick have been bitter rivals for years after earlier collaboration turned sour.

 

Resnick blocked plans for a new Assemi proposed pistachio plant near Five Points in Fresno County back in 2019  thwarting the Assemi family plan to expand processing capacity even as the state’s  growers continued to plant new trees.

 

It was after a successful CEQA lawsuit in Fresno County that the Assemis looked south to Tulare County – purchasing  the ARO operation in Terra Bella. They then applied to Tulare County to expand and were granted permits. Resnick then filed what were to be 2 lawsuits against Tulare County fighting the permits for the past 3 years unsuccessfully and failing to stop this plant expansion.

 

In their defense the Assemis argued Resnick was motivated simply by competitive interest in filing the legal actions

 

The former ARO Pistachios plant originally had just four storage silos when it was built in 1996. Under Assemis’ Touchstone company, the site now has 20 silos looking to add a total of 36 silos. 

 

Wonderful’s’ lawsuit called the expansion “industrial scale” not mentioning that Wonderful plants are as big or bigger.

 

The Assemis however, remains stalled on their 2018 plan to build a large 49-silo processing plant near Highway 33 in eastern Fresno County after a series of environmental challenges by Wonderful.

 

Wonderful is owned by billionaire Stewart Resnick, California’s top farmer in citrus and almonds as well.

 

The Assemis withdrew their first EIR after losing in Fresno court to Resnick, forcing them to start over. Now in April 2023 a second draft EIR is underway on a new plant proposal near the original west Fresno County site. The draft has been crawling through the process for several years.Now called Kamm Ave Pistachio plant – the facility would be 130,000sf.

 

Processors need to add capacity and silos in the Valley as growers continue to plant 30,000 acres of new pistachio trees annually, says Bob Klein of the Administrative Committee for Pistachios. This year’s crop is expected to be in a 1.5 billion pound range despite the regional flooding.

-April 5,2023-

California’s merchandise export trade contracted in February (latest available numbers) from one year earlier, while its share of the nation’s merchandise export trade fell to an all-time low, according to a Beacon Economics’ analysis of U.S. trade statistics released this morning by the Foreign Trade Division of the U.S. Census Bureau.

The second month of the year saw California businesses export goods with a nominal value of $13.447 billion. That was down 8.0% from the $14.623 billion the state exported one year earlier.

Shipments abroad of manufactured goods declined by 6.8% to $8.509 billion from $9.127 billion the previous February. Exports of agricultural products and raw materials dropped by 14.0% to $1.708 billion from $1.985 billion. Re-exports slipped by 8.0% to $3.230 billion from $3.511 billion.

“Storm-battered February presented some unique challenges to California’s exporters, many of them logistical in nature,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.“ Apart from flooded farmlands and road closures, a fall-off in U.S. demand for imports led shipping lines to reduce service to West Coast ports, resulting in fewer ships available to carry exported goods.”

California’s share of the $158.942 billion in U.S. merchandise exports in February was 8.5%, down from a 9.7% share in February 2022. Back in pre-pandemic February 2019, California accounted for 11.0% of the nation’s merchandise exports.

LEADING EXPORT COMMODITIES

California’s merchandise exports during the past three months totaled a nominal $43.646 billion, a 2.1% gain over the $42.737 billion exported in the same months one year earlier. Of the eleven commodity groups with exports in excess of $1 billion in the latest three-month period, only five registered nominal year-over-year gains.

On the upside, Chemical exports (including pesticides and fertilizers; pharmaceutical products; paints and adhesives; soap and cleaning products; and raw plastics, resins, and rubber) jumped by 21.3% to $5.319 billion from $4.384 billion.

Exports of Transportation Equipment (automobiles, trucks, trains, boats, airplanes, rockets, and their parts) rose by 10.1% to $3.970 billion from $3.606 billion. Exports of Electrical Equipment and Appliances rose 6.4% to $1.968 billion from $1.850 billion.

Petroleum and Coal exports soared by 47.3% to $1.716 billion from $1.165 million one year earlier. Exports of Fabricated Metal Products increased by 9.1% to $1.218 billion from $1.116 billion.

On the downside, exports of Computer & Electronic Products (computers and peripherals; communication, audio, and video equipment; navigational controls; and electro-medical instruments) dipped by 2.4% to $9.775 billion from $10.020 billion.

Exports of Non-Electrical Machinery (machinery for industrial, agricultural and construction uses as well as ventilation, heating, and air conditioning equipment) declined by 6.6% to $4.570 billion from $4.891 billion.

Agricultural exports slumped by 4.1% to $3.100 billion from $3.232 billion. Shipments of Miscellaneous Manufactured Commodities (a catchall category of merchandise ranging from medical equipment to sporting goods) fell by 9.1% to $3.014 billion from $3.315 billion.

Shipments abroad of Food & Kindred products slipped by 4.8% to $2.601 billion from $2.732 billion. Foreign shipments of Waste & Scrap materials dove by 15.3% to $1.071 billion from $1.264 billion.

-March 30,2023-

Tulare County jobless rate ticks higher but jobs are up

The unemployment rate in Tulare County was 9.9 percent in January 2023, up from a revised 8.5 percent in December 2022, and above the year-ago estimate of 9.5 percent. This compares with an unadjusted unemployment rate of 4.6 percent for California and 3.9 percent for the nation during the same period.

Taking a closer look, the jobless rate here has ticked up -not due to fewer jobs being available- but because the labor force has increased since January 2022. The number of people ready to work increased by 4000 or 2% year over year. Jobs filled increased by 2,700 or 1.5%.Both farm and nonfarm jobs are higher this year. Private jobs are up 3.3% and warehouse  jobs are higher by 7%.

One sector we see lagging is in hotel occupancy affecting accommodation jobs.

The February “Visit California Lodging Report” says Tulare/Visalia metro area hotel occupancy is down from the year before at 58% compared to 66.7% in February 2022. Other Valley cities were down as well but the LA area and Bay Area were higher.

 

Kings County unemployment rate climbs but jobs grew

EDD says the unemployment rate in Kings County was 9.2 percent in February 2023, up from a revised 8.7 percent in January 2023, and above the year-ago estimate of 8.9 percent. This compares with an unadjusted unemployment rate of 4.8 percent for California and 3.9 percent for the nation during the same period.

Taking a closer look, year-over-year unemployment did increase from 5% in February 2022 to 5.4% in February 2023 due to growth in the labor force, more people looking for work. Farm jobs last month in the county were strong year-over-year – up 11% and nonfarm jobs climbed by an impressive 3000 – up 5.1