By Craig W. Anderson
At harvest time, the San Joaquin Farm Bureau News takes a look at what’s been happening in agriculture before the year’s end from the experts on the ground, in the fields, orchards, barns and pastures around the county: our farmers and ranchers.
“All I’m hearing is that everything in the county’s ag is up in the air at this point,” said SJFB Executive Director Andrew Genasci. “The weather caused harvests to be late, grapes were all over the place, walnuts had an uncertain crop, almonds experienced quality issues, grapes needed buyers, and so on.”
SJFB President Andrew Watkins said, “It seems to me it all depends on the crop. If prices are low, then input costs like fuel and electricity become more impactful. Overall, this is similar to the situation in the late ’70s and early ’80s.”
Genasci said there are “many concerns across the board about our crops and the hope is that we’ll have buyers when everything settles out.”
Watkins remarked that when grapes, almonds and milk are the mainstays of the county’s crops and “they all have off years, it sets the tone, in many ways, for the rest of agriculture. This has been a challenging year so far.”
About walnuts monumental slump in 2022 Genasci said, “We’re hoping walnuts will experience a rebound and we’re waiting to see how exports of various crops will go. There will be buyers if the quality’s there.”
“It’s definitely a rough year for ag but I’m sure we’ll recover from it,” he said.
The 2023 look at crops begins with Milk, which is No. 1 of the Top Ten Commodities in the 2022 Agricultural Commissioner’s Crop Report.
How has milk fared thus far in 2023? Jack Hamm, Lodi dairy farmer pointed out that there has been a 25% reduction in gross income for dairies in 2023.
“In 2022, we received $25 per cwt and this year it’s $18 per cwt for our milk,” he said. “Feed costs have been astronomical and other input costs have gone up.”
Hamm explained that the drought was key. “Dry land forage was really bad” so feed costs had to be absorbed. “Inputs increased but what we received for our milk was low. Feed costs were crazy with top quality cow hay at $425 to $450 a ton.”
Lodi veteran dairy farmer Hank Van Exel said “2023 has been the worst year since 2009. The dairy industry is losing about $150 per cow. Milk prices are $7 to $8 below the cost of production despite an uptick in prices earlier this year.”
California produces 25% of the nation’s milk supply but the situation is skewed so that beef prices and bull calf prices are helping keep the industry afloat, along with softening feed prices.
However, the costs vs. prices keep the vicious circle going and, Van Exel said, “ag in general in California is down. It’s about as brutal a year as I’ve seen. The money dairies made last year is out the door.”
He said meetings to address potential changes in the Federal Milk Marketing Order are ongoing and “it seems they want to make allowances favoring co-ops.”
California’s dairy industry operates under the FMMO and the meetings may determine changes in how milk is priced, with potential impacts to dairies take home pay.
“Testimony is still going on. It’s a very slow process,” Hamm said. “We’ll see if it actually changes anything for us in California.”
Van Exel explained that beef cattle are worth more than dairy cows, so there is lower value in culling dairy cows for beef as an extra source of income.
“I hope the situation will get better,” Van Exel said. “I haven’t been this cash poor since I’ve been in the business.” He said it is a malaise that’s uniform across the dairy sector.
Hamm commented, “This has been a very tough year for dairy farmers and I don’t know of a shining spot in agriculture. The dairy industry is not for the faint-hearted.”
A variety of issues challenged the winegrape sector in 2023, and continued into the summer as “winter’s hangover, part of a bizarre year,” said grape grower Brad Goehring. “We had a very cold May and so far in 2023 we’ve had 50 inches of rainfall.”
May, June, August and September were “really cold and with the deep, wet soils from the rains, root rot was a real threat to zinfandel and petite sirah root systems,” The water in the ground led to late irrigation which was more challenging due to the soil conditions, Goehring said.
But despite the challenges of weather provided by an atmospheric river, saturated soil, a search for ways of disposing of biomass and other tests, the ultimate result was the norm: good quality.
“Attentive growers with good bmp’s produced grapes of really good quality,” said Kevin Phillips, vice president of operations for Michael David Winery.
The yield was “pretty big” he said but rejections going to concentrate would determine how it translated to the crush.
He said the cause of the market crash was the real slowdown at wineries, fewer people drinking wine creating a drop in wine demand for a “really weird” marketplace also affected by the weather.
“There’s not a lot of optimism out there right now,” Phillips said. “2023’s been a rough one for ag all around.”
“It’s been an unusual growing season,” said Stuart Spencer, executive director of the Lodi Winegrape Commission. “The weather caused more mildew and input costs were part of the equation, really squeezing growers.”
He said COVID and the pandemic shutdown and inflation contributed to the weak marketplace. “We’ll come out of it. Optimism is out there as we continue to build the Lodi brand.”
“Buyers are difficult to come by this year,” Goehring noted. “Hopefully, were heading back to normalcy now.”
The nut of consistency known for weathering almost every challenge it faces, the crop has been off by 25% in 2023. said Dave Phippen, partner in processor and packer Travaille and Phippen. This is disappointing for growers who had, all spring and summer, found reports estimating the crop would be about the same as a usual year.
“Our pollinators were way off and especially so in San Joaquin and Stanislaus counties,” Phippen said. “And unprecedented rains affected the crop.”
The usually good prices the almond industry had come to expect in seasons prior to 2023 were adversely affected by the huge carryin of more than 800 million pounds, explained Phippen. “My guess is that the large carryin will be around through 2024 and this will continue to depress prices.”
There is no expectation in the industry for an upturn in market pricing and that “anything that will wear down the carryin will be good; it has to go away before things will get better,” Phippen said.
A glance at the recent almond facts shows a California industry leading the U.S domestic market, the No. 1 California ag commodity export and a reminder that nearly 100% of the nation’s almond production comes from California.
India’s lifting of tariffs on almonds and walnuts has opened export channels.
“Most of us in almonds have experienced very good years and now we’re learning how to handle the bad times,” Phippen said.
Second SJFB Vice President James Chinchiolo of Chinchiolo Farms described the stark challenges farmers face.
In 2023, cherries were not a money-making crop and Chinchiolo explained the cost to pick was 50 cents a pound but only 18 cents came back to growers.
“The early varieties did well but Bings suffered 40% to 50% culls due to heat split,” said cherry and walnut grower Ken Vogel.
He noted that there was a high percentage of culls and low prices in the later varieties “but the Corals were fine.”
Cherry farmers understand the risks of growing the fruit but the capacity to move and sell the crop doesn’t produce the overall return needed, Chinchiolo said.
Egg production in California through mid-October was 278 million eggs, an increase of 23 million over the same time last year, according to the USDA National Agricultural Statistics Service.
California is fifth among the nation’s top 10 egg producers with more than 18,000 layers – chickens that contribute to the 6.54 billion eggs laid yearly nationwide.
San Joaquin County is among the top Northern California counties including Stanislaus, Merced and Kern in supplying local, state and national markets.
Based on the egg industry’s past crop value, 2023’s results could place the commodity again among the annual Crop Report’s Top Ten Commodities.
“The commodities I’m involved with are not sustainable with prices as they are,” Chinchiolo said. “If we can’t improve sustainability we won’t stay in business.”
Walnuts are bringing 40 cents to 50 cents a pound, not good when “we barely break even at 85 cents a pound,” he said.
Chinchiolo explained that at this level of prices received for the walnut crop, the resources aren’t there to keep equipment functioning, combatting wear and tear.
Help may be on the way, primarily from Mother Nature as the CAFB publication Food and Farm News noted in October that “favorable growing conditions and increased rainfall have allowed [growers] to produce higher yields and quality nuts that marketers say will be easier to sell.”
Walnut grower Ken Vogel said walnuts were still being harvested, that “the early varieties did well and I expect Chandlers will be ok and our Hartley’s found a good buyer at the last minute.”
The hit or miss with walnuts keeps its hoped-for comeback unknown but some growers felt the time has come to take out walnut acreage around the county, which is part of the statewide removal of 23,000 acres between October 2022 and June 2023, according to the California Walnut Board. The reason: growers shifting to other crops. The remaining walnuts are expected to possess excellent quality due to favorable growing conditions.
A main concern is whether buyers who have become used to discounted walnuts will be willing to pay more for the 2023 crop. However, pricing at the beginning of the current marketing year is 40% higher than where it ended last year.
Walnuts benefited from major importer India eliminating tariffs on walnuts and almonds, producing what Chinchiolo described as a “growth market.”
“The value of our crops have to increase,” he said. “Growers have all the components to achieve great success: the will, intelligence and means to get it done. We as an industry need to accomplish that.”
2023 may be able to pull walnuts out of the mire of years of drought, record low grower returns, COVID market disruptions, supply chain uncertainties and a heavy September heat wave, all in 2022.
“I think India’s recent tariff elimination gives us some optimism regarding the walnut export market,” Vogel said.
Cattle & Calves
The 2023 rains were a positive occurrence for beef as the storms encouraged good grass and forage for the cattle and calves sold well with good prices, said cattleman and SJFB First Vice President Les Strojan.
However, he also said, “Cow numbers were down due to the drought that reduced forage, but prices for beef was good due to the low number of cattle.”
Short supplies of cattle pushed prices up because California’s ranchers had reduced their herds to deal with the drought’s effect on forage.
The bulk of sales for cattle occurred in the spring and the good news is that prices keep going up in the marketplace.
Strojan said if the work is continually done, the cattle ranchers can be successful, with many of them becoming more diversified and that is the key, with home grown feed and other crops to augment incomes.
The main challenge for ranchers is that they – and other farmers – don’t currently have incomes that keep up with their input costs.
“With the way things are, many more farmers, ranchers and dairy operations throughout agriculture will go out of business this year,” he said.
Paul Sanguinetti is a diversified farmer who’s farmed tomatoes through drought, bad weather and an assortment of other challenges. He said he’s finished with the tomato harvest this year and “it’s a good crop and we were lucky we didn’t get the rain other areas got. We accomplished a lot of prep for what we’ll be working on next year.”
Sanguinetti said, “Inputs are up, diesel fuel’s cost is up and while we’re breaking even, it’s not been a good year for agriculture in the county so far. Prices are so bad, interest rates are high and input cost are always increasing. It is a challenge.”
San Joaquin Valley Hay Growers Association President and CEO Rick Staas said harvest is nearly complete. “Prices are down to $50 to $100 per ton and the tonnage is down as well.” The hay’s protein was also down. He said the tonnage usually decreases following a wet year and “the prices have been pushed down this year due to the situation with dairy farmers receiving significantly lower prices for their product, which has hurt their hay purchases.”
With inflation still rampant and a slowed export market, with prices for the usually solid export Sudan grass “way down and dairies really struggling, it hasn’t been a good year for hay growers,” Staas said.
With dairy farmers turning to hay alternatives like almond hulls for feed at $100 per ton, hay sales suffered. According to Staas, many dairies and other hay buyers had to pay high interest rates for product bought on credit which didn’t help their bottom line.
“The market should improve a little during the winter,” he said, but with fewer acres planted to hay and increasing fuel prices for transporting product from the fields, he didn’t expect much relief from the down year.
“The southern market’s decline due to the Colorado River situation will see more hay shifting eastward and southward,” Staas said. He expects the association’s growers to continue producing sufficient quantities of quality hay for those who need it in San Joaquin and surrounding counties.
“We’ve had better years,” Staas said. “And we’re still awash in overregulation and buried by paperwork but I’ve been around long enough to have experienced many ups and downs and I’m confident this will pass and we’ll get back to normal.”
The market in 2023 is a “lot softer,” said Bryan Van Groningen of Van Groningen & Sons. “After last year’s range of $80 to $90 per ton the price has returned to a normal level of $50 to $60 per ton.” However, despite prices falling 30%, he said silage corn is still profitable at the current “normal” cost.
People planted silage corn so there is not as large a need for buying it from dealers and prices reflect this change, he said.
Strojan agreed that while silage corn prices have retreated, they remained normal enough to somewhat offset increasing input expenses.
The “other crops” may not be well known but they are vital to the success of agriculture. San Joaquin County boasts a slate of crops that may not hit the Top Ten but their impact is formidable in the county’s ag value of more than $3 billion.
A partial list of the county’s hidden gems includes watermelons, pumpkins, bees (apiary), potatoes, apples, olives peaches, pistachios, cucumbers, garlic, melons, beans, nursery products, biomass, livestock and poultry products.
A search of the county’s annual Agricultural Commissioners Crop Reports reveals that every year, the “other crops” make a vital contribution to the county’s ag value. In 2022, the “other crops” noted above totaled more than $863 million. And the 2023 value seems well on the way to being in that same elite plateau.