The San Joaquin Valley is the agricultural powerhouse of the United States and California. California accounts for an eighth of U.S. farm sales, largely because it produces high value fruit and nut, vegetable and melon, and horticultural specialty (FVH) crops such as nursery products and flowers. Over three-fourths of the state's $37 billion in farm sales in 2010 were crop commodities, and almost 90 percent of the $28 billion in California crop sales represented labor-intensive FVH commodities.

About half of California's farm sales and farm employment are produced in the eight-county San Joaquin Valley with four million residents that stretches from Stockton in the north to Bakersfield in the south. The leading U.S. farm county is Fresno, which had farm sales of almost $6 billion in 2010.

Philip Martin

Philip Martin

Philip Martin is Professor of Agricultural and Resource Economics at the University of California- Davis, chair of the University of California's Comparative Immigration and Integration Program, and editor of the monthly Migration News and the quarterly Rural Migration News.

County agricultural commissioners released reports of the value of commodities produced the year before. Tulare County had farm sales of $8 billion in 2014, led by $2.5 billion worth of milk, followed by Kern country's $7.5 billion led by grapes worth $1.7 billion. Fresno county had farm sales of $7 billion, led by $1.3 billion worth of almonds.

California produces 20 percent of U.S. milk, but the state's milk output declined in 2015 as farmers grappled with higher feed costs attributed to drought. California surpassed Wisconsin as the leading dairy state in the early 1990s, but in recent years milk output has increased in Michigan, New York and Wisconsin, states with lower-cost land and plenty of water for pasture and feed. Milk prices have also fallen to less than $17 a hundredweight in Fall 2015, reflecting a global surge in milk production.

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California's minimum wage rose from $9 to $10 an hour January 1, 2016.

AB 20, which would have required the state to initiate discussions with the federal government to seek a waiver that would allow the state's Employment Development Department to issue work permits to unauthorized farm workers if there are not enough U.S. workers to fill available jobs, stalled in the Legislature in 2015 and was not approved. Under AB 20, the immediate family members of workers with permits could have received permits to reside legally in California.

Kansas, Utah and Colorado tried to create similar state-facilitated guest worker programs, but the federal government did not grant required waivers, so these states wound up with state-run programs to help farm employers to apply for guest workers under the H-2A program.

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California endured its fourth year of drought in 2015, but farm sales appear headed for another record. Water was shifted from low-value crops such as alfalfa to higher-value nuts, and prices for many farm commodities were strong.

California agriculture "normally" uses about 33 million acre feet of water. In 2015, agriculture used 30 million acre feet. Two-thirds of the nine million fewer acre feet of surface water available in 2015 was replaced with groundwater pumped from underground aquifers. Groundwater is normally 40 percent of the water used by agriculture, and 60 percent in dry years.

The water in underground aquifers accumulated over centuries, and cannot be replaced quickly. California in 2014 became the last western state to regulate groundwater pumping, enacting laws that created local groundwater sustainability agencies to register private wells, monitor the water-measuring devices that must be attached to pumps, and regulate groundwater pumping. The agencies are financed by fees charged to farmers and other water users.

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Don Villarejo, a leading farm labor researcher, highlighted 40 years of continuity and change in California agriculture and farm labor. The continuities include low incomes and poverty for many seasonal workers, while the changes include fewer and larger growers, more intermediaries who bring workers to farms, and fewer union contracts.

There have been important regulatory changes aimed at protecting farm workers, from the federal MSPA (1974) to the state ALRA (1975), but they have not prevented declining earnings. In 1974, California farm employers reported an average $2.60 per hour, which BLS says is $12.49 in 2014 (http://data.bls.gov/cgi-bin/cpicalc.pl), when reported earnings were $11.33. California farm worker earnings were 52 percent of manufacturing worker earnings in both 1974 and 2014 despite a raft of federal and state laws that aimed to protect and empower farm workers.

The shift to hiring workers via farm labor contractors (FLCs) and other intermediaries is also associated with fewer benefits, from housing to health insurance. There were 9,300 farm labor contractors registered with DOL in May 2015, including 4,100 or 43 percent in California.

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Commodities

Almonds are irrigated with 3.5 acre feet or 42 inches of water, and the typical 124 almond trees per acre yield an average 2,270 pounds of nuts. One cubic foot of water is 7.5 gallons, and one acre is 43,560 square feet, so 502 gallons of water are used to produce a pound of almonds: (7.48 x 3.5 x 43,560 )/2,270 = 502. With about 380 almonds per pound, each almond requires about 1.3 gallons of water.

California's acreage of long-staple Pima cotton declined as more farmers switched to almonds. California had over 300,000 acres of Pima cotton in 2011, and fewer than 100,000 acres in 2015. Despite cotton yields of over 1,200 pounds per acre, nuts and processing tomatoes require less water per dollar of revenue.

Over 70 percent of California grapes and almonds are irrigated with drip or a similar low-water technology. However, less than 10 percent of the alfalfa and corn used to feed dairy cows uses water-saving technologies; flood irrigation is typical.

A Fresno State study (www.fresnostate.edu/academics/drought/) focused on the effects of the drought in the eight-county San Joaquin Valley, emphasizing that areas most dependent on surface water suffered most. The report called for water budgeting, that is, recognizing the true value of water and pricing it accordingly.

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Drought 

 

The drought was the major farming story during summer 2015.

 

An estimated 542,000 acres were fallowed in 2015, up from 490,00 acres in 2014, as farmers used about 10 percent less water than in non-drought years. In 2010, agriculture consumed 33 million acre feet of irrigation water, while urban uses, including landscaping, consumed 8.3 million acre feet. One acre foot is 326,000 gallons.

 

In 2015, agriculture was expected to use about 30 million acre feet of water. The rain deficit between 2012 and 2015 is equivalent to one year's rain, which averages 20 inches across the state.

 

Senior holders of water rights were required to report how much water they were withdrawing from rivers and streams, and faced fines for taking excess water set at $1,000 a day and $2,500 an acre foot.

 

Forecasters are predicting record rainfall in California in 2015, as conditions for a wet El Nino rainy season in 2015-16 are apparent in the Pacific Ocean. Most of California's rain is from atmospheric rivers that bring water from the Pacific Ocean inland.

 

In recent years, fewer winter air currents reduced these so-called Pineapple Expresses, which are like hurricanes without wind. The last major El Nino was in 1997-98. 

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California suffered its fourth year of drought in 2015, prompting the federal government to deliver no water to its Central Valley Project farm customers and the state to deliver 20 percent of contracted water to farmers.  Agriculture uses about 80 percent of the state's developed or storable water that can be delivered via dams and canals. Annual farm sales of about $43 billion account for less than two percent of the state's $2 trillion GDP.

Governor Jerry Brown in April 2015 ordered urban water districts to reduce water consumption through incentives and fines by 25 percent in 2015. The State Water Resources Board enforces the water reduction plan via local water districts. Brown exempted agriculture from the cuts, prompting criticism. One commodity spotlighted was almonds, since the state's 900,000 acres require about four-acre feet of water per acre, twice as much as cotton, grapes or tomatoes.

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Beginning July 1, 2015, all California employers must give their employees three paid sick days a year or allow them to accumulate paid sick leave at the rate of one hour for every 30 hours worked. Many employers plan to grant employees three days of sick leave at the beginning of each year.

Cal/OSHA tightened its heat-safety regulations effective May 1, 2015 to require "fresh, pure, and suitably cool" water to be located as close as practicable to workers. Employers must provide shade for all workers when the temperature tops 80 degrees, down from 85, and must monitor workers for signs of heat stress when temperatures exceed 95 degrees. All outdoor workers must be trained in a language they understand about the dangers of heat illness.

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California is in its fourth year of drought http://ca.gov/drought). After a wet December 2014, there was little rain in January 2015. February rains partially filled some reservoirs, including Shasta Lake, which rose from 40 percent to 60 percent of capacity, but the entire state was declared a drought emergency area.

Agriculture, which uses about 80 percent of the state's developed or storable water that can be delivered via dams and canals, fallowed 400,000 or about five percent of crop land in 2014, but over 500,000 acres are expected to be fallowed in 2015. The U.S. Bureau of Reclamation said that most of its Central Valley Project farm water customers would receive no federal water in 2015, while the State Water Project said it would provide 20 percent of contracted water to its farmer customers.

By one estimate, the state's 860,000 acres of almonds each year require three times more water than the city of Los Angeles.

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Beginning July 1, 2015, all California employers must give their employees three paid sick days a year or allow them to accumulate paid sick leave at the rate of one hour for every 30 hours worked. Many employers plan to grant employees three days of sick leave at the beginning of each year.

 

Cal/OSHA tightened its heat-safety regulations effective May 1, 2015 to require "fresh, pure, and suitably cool" water to be located as close as practicable to workers. Employers must provide shade for all workers when the temperature tops 80 degrees, down from 85, and must monitor workers for signs of heat stress when temperatures exceed 95 degrees.

 

All outdoor workers must be trained in a language they understand about the dangers of heat illness.

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California is in its fourth year of drought (http://ca.gov/drought). After a wet December 2014, there was little rain in January 2015. February rains partially filled some reservoirs, including Shasta Lake, which rose from 40 percent to 60 percent of capacity, but the entire state was declared a drought emergency area.

Agriculture, which uses about 80 percent of the state's developed or storable water that can be delivered via dams and canals, fallowed 400,000 or about five percent of crop land in 2014, but over 500,000 acres are expected to be fallowed in 2015. The U.S. Bureau of Reclamation said that most of its Central Valley Project farm water customers would receive no federal water in 2015, while the State Water Project said it would provide 20 percent of contracted water to its farmer customers.

By one estimate, the state's 860,000 acres of almonds each year require three times more water than the city of Los Angeles.

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California's most recent agricultural report, released early in 2014, reported that the state's farm sales approached a record $45 billion in 2012, almost 50 percent more than Iowa, where farm sales were $32 billion. Farm sales are divided between crops, with $32.6 billion in sales, and livestock products, worth $12.2 billion in sales.

 

Within crops, fruits and nuts were worth $17 billion, and over half of the value of fruits and nuts came from grapes and almonds. Vegetables and melons were worth $6.8 billion, and lettuce worth $1.4 billion was a fifth of the value of all vegetables. The value of field crops was $5 billion, including a quarter from the hay grown primarily to feed to dairy cows. Tulare is the dairy county, generating over a quarter of the state's sales of milk and cream, and Tulare is also the leading county for cattle sales.

 

Three counties had farm sales over $6 billion in 2012: Fresno ($6.6 billion) Kern ($6.2 billion) and Tulare ($6.2 billion).

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Processing

Farm commodities are often packed and processed by nonfarm workers in nearby plants. For example, Taylor Farms is a major producer of bagged salads, with sales exceeding $1.8 billion a year. Taylor's Salinas bagged salad plant has 2,500 employees who are represented by the Teamsters union, but its 900-employee Tracy salad plant is non-union.

The ballots in a March 2014 election at the Tracy plant were impounded by the National Labor Relations Board because the Teamsters alleged Taylor unlawfully interfered. The Teamsters argue that, because the 600 workers brought to the Tracy plant by temp agencies SlingShot and Abel Mendoza earn $0.50 an hour less than Taylor's Salinas workers, Tracy workers need a contract. The Teamsters say that Taylor intimidated its employees, some of whom are unauthorized, by threatening to introduce E-Verify to check the legal status of employees, and that the E-Verify threat makes workers reluctant to support the Teamsters.

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California has about eight million acres of irrigated crop land. A third is planted to perennial fruit and nut crops, a third to field crops such as cotton and rice, and a third to crops that are fed to animals, such as alfalfa and corn. The rising share of crop land planted to perennials has "hardened" the demand for irrigation water, since they must be watered even in drought years.

 

For example, 15 percent of the land in the Westlands Water District is planted to almonds, up from five percent in 2000.

 

In a normal year, about two-thirds of the water used in agriculture is surface water, captured in dams and reservoirs in northern California and transported south via canals to farmers. The other third is groundwater pumped from underground aquifers. Drought reduced the amount of surface water available to farmers by 6.6 million acre feet in 2014 compared with normal years, but farmers compensated by pumping an additional five million acre feet of groundwater.

 

With reduced supplies of water devoted mostly to high-value perennial crops, there were small reductions in farm sales and farm jobs in 2014. Between 420,000 and 700,000 acres of the state's eight million irrigated acres were fallowed in 2014, reducing crop sales by up to $810 million.

The main worry is how to respond to a drought in 2015 and beyond. Groundwater aquifers are a shared resource: as some farmers dig ever-deeper wells, they force others who share to same aquifer to dig deeper as well.

 

California was the last western state to regulate groundwater pumping. A package of bills enacted by the state in 2014 creates local groundwater sustainability agencies to register private wells, monitor the water-measuring devices that must be attached to pumps, and regulate groundwater pumping. These new agencies will impose fees on well owners to finance their activities.

 

Economists have proposed that landowners in each groundwater basin receive the share of sustainable water extraction that reflects their share of land in the basin. The sustainable share of groundwater that could be pumped from the basis would be the average amount extracted and replenished during a decade of "normal" weather.

 

Landowners could extract their sustainable share of the groundwater in the basin for the cost of pumping. However, if they took more, they would have to pay to replace their excess withdrawal. Under such a scheme, there would be no restrictions on groundwater pumping, but excess water extractions would result in payments to the water district that could go to farmers who fallow land and make more water available to others or be used to buy water from outside the basin for replenishment.

 

Orange County has since the 1960s used a version of this cap-and-trade system to manage the extraction of groundwater and prevent salt water intrusion. Economists hope that the challenge of sharing limited groundwater will encourage farmers to embrace water-sharing on a basin-wide basis.

 

A University of California at Davis study estimated that there were almost 7,000 fewer jobs for hired farm workers on crop farms, both year-round and seasonal. The state provided funds to farm worker service organizations to help farm workers, and they reported that the food and rent assistance vouchers they could provide were gone quickly. Agricultural areas of California have large numbers of poor residents, so there is a large pool of persons eligible for assistance.

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Sick Leave

SB 1522, the Healthy Workplaces, Healthy Families Act of 2014, was signed into law in September 2014. SB 1522 requires employers to give employees at least three sick days a year and will cover 6.5 million private and public sector employees in California beginning July 1, 2015. Employees accrue paid sick days at the rate of one hour for every 30 hours worked, so that a full-time worker employed 40 hours a week would accrue 8.6 days of paid sick leave a year.

Employees who are not covered by a collective bargaining agreement accrue three days of paid sick leave after being employed for 90 days to use to care for themselves or a family member such as a child, spouse, domestic partner, grandparent, grandchild or sibling.

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California had farm sales of $45 billion in 2012, including $17.2 billion worth of fruits and nuts, $6.8 billion worth of vegetables and melons, and $3.5 billion worth of horticultural specialties such as greenhouse and nursery products. The value of field crops was $5 billion, making crop sales $32.5 billion or 73 percent of the state's farm sales. Livestock and poultry sales were $12.1 billion, including $6.9 billion or 57 percent from milk. 

In summer 2014, three major farm labor trends stand out: few labor shortages, many labor-saving changes, and segmenting farm labor contractors (FLCs.) 
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The drought dominated farm-related news in summer 2014. California's Lake Oroville was less than 40 percent of capacity and Nevada's Lake Mead was at its lowest level since the Hoover Dam was built in the 1930s, less than 1,100 feet above sea level rather than the usual 1,200 feet. 

California's State Water Resources Control Board in July 2014 instituted mandatory statewide water restrictions for the first time, allowing local water agencies to fine those who waste water up to $500. The new regulations by the SWRCB, which regulates only urban water use, limit outdoor watering to two days a week, largely prohibit washing sidewalks and driveways, and ban washing cars without a shut-off nozzle on the hose.

A University of California at Davis study estimated that 429,000 acres or five percent of California's eight million acres of irrigated land would be fallowed in 2014 due to lack of water, including 10,000 acres that would normally be planted to vegetable and melon crops. About 40 percent of California's irrigated crop land, some 3.2 million acres, are planted to trees and vines, "hardening" the demand for water in the sense that perennial crops must be watered each year.

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Agriculture Census 

The Census of Agriculture, conducted in years ending in 2 and 7, reported that there were 2.1 million U.S. farms with farm sales of $395 billion in 2012, including $212 billion in crop sales (54 percent) and $182 billion in livestock sales (46 percent). In almost all previous COAs, livestock sales slightly exceeded crop sales, but a combination of high crop prices and a drought that encouraged some livestock operators to sell cattle to avoid high feed costs made crops the majority of farm sales in 2012.

Farm sales have been rising by about $100 billion between the five-year COAs; they were about $200 billion in 2002 and almost $300 billion in 2007. However, most farm sales are from a relative handful of large farms. The 81,600 U.S. farms that each had farm sales of $1 million or more in 2012 collectively had farm sales of $264 billion, two-thirds of total farm sales of $395 billion.

The COA reported 2.1 million U.S. farms in 2012, down from 2.2 million in 2007. Farmers are aging; their average age was 58 in 2012, up from 57 in 2007. There are twice as many farmers age 75 and above, 258,000, as under 35, 120,000. Of the 2.1 million farm operators in 2012, 1.1 million had a primary occupation other than farming.

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The lack of water to grow crops dominated farm-related news in the San Joaquin Valley during the spring and summer of 2014. The federal Central Valley Project and the State Water Project announced zero allocations for the water agencies in the San Joaquin Valley that buy water from them, although the SWP raised its allocation to five percent in April 2014. 

California has eight million acres of irrigated land, and 410,000 acres or five percent are expected to be fallowed in 2014 due to lack of water, including 10,000 acres that would normally be planted to vegetable and melon crops. About 40 percent of California's irrigated crop land, some 3.2 million acres, are planted to trees and vines.

A UCD study released in May 2014 estimated that San Joaquin Valley growers would receive a net 1.5 million fewer acre feet of surface water in 2014, which could lead to 6,400 fewer jobs in crop production, three percent of the average 200,000 farm worker jobs in the San Joaquin Valley and 1.5 percent of the state's average farm employment of 400,000. An additional 8,000 related nonfarm jobs could be lost. Some of the farm and nonfarm jobs expected to be lost are seasonal. 

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Fresno

The Wall Street Journal profiled the city of Fresno's bleak finances October 31, 2013. Fresno, a city of 500,000 residents, had the least cash on hand of any of the 250 largest US cities. Fresno had less than a day's reserves, compared with a median 80+ days for large US cities.

One cause of Fresno's cash crunch is a $26 million convention-center garage that lost business to new facilities at California State University, Fresno in the northern part of the city. Garage deficits were financed in part by borrowing from other city funds. Eventually, the city began to lay off employees, some 1,200 or 30 percent of its 4,200 workers, between 2009 and 2013.

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