A daily compilation of significant news articles and comment
November 26, 2008
2. Supply –
Farmers evaluate Klamath agreement to remove four dams
California Farm Bureau Federation Ag Alert
Growers face difficult planting choices
California Farm Bureau Federation Ag Alert
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Farmers evaluate Klamath agreement to remove four dams
California Farm Bureau Federation Ag Alert – 11/26/08
By Christine Souza, Assistant Editor
Depending on their water source, farmers and ranchers near the California-Oregon border have differing views of a recent decision by Oregon-based hydroelectric power company PacifiCorp to remove four of its dams along the
"The agreement regarding the dams appears to be a milestone in a very difficult history of conflict over the water resources of the Klamath Project," said Chris Scheuring, managing counsel for the California Farm Bureau Federation Natural Resources and Environmental Division. "Still, folks on Klamath tributaries downstream are worried about how the implementation of the settlement may affect their own rights to divert water for irrigation and stock watering, so we'll be following this issue closely to try to ensure that all of our affected members can continue their operations in the face of difficult environmental constraints."
PacifiCorp, the state of
"This agreement in principle was a positive and necessary step forward toward the overall vision of the Klamath Basin Restoration Agreement to provide long-term security for communities up and down the basin," said Klamath Water Users Association Executive Director Greg Addington. "The Klamath Water Users Association in general does not like the idea of dam removal, but in this unique instance and as part of the bigger package, it gives us what we need to continue as a viable economic industry."
The agreement does not guarantee the removal of the dams, but simply provides a complex framework for what may be the largest dam removal project in history.
It calls for PacifiCorp to raise charges to its ratepayers by 2 percent over time to contribute $200 million toward decommissioning the dams. Proponents say these costs should be less than what it would cost PacifiCorp ratepayers to relicense the dams with updated fish passage. The state of
The agreement compels the federal government to assess the costs and benefits of dam removal and as a result, scientific and engineering studies will be conducted in consultation with state, local and tribal governments and other stakeholders. A final determination will be made by March 31, 2012.
Tulelake farmer Scott Seus, who chairs the Klahmath Water Users Association Power Commithtee, calls the agreement a first step towards restoration of the river and assurance that farming continues up and down the
"We are somewhat in control of our destiny and if everything goes as planned, it is something we can live with," Seus said. "Our other alternative is to keep going to battle in the courts and let new administrations dictate how the Klamath survives or fails."
Klamath Project irrigators like Seus remember vividly the 2001 water shutoff, when the federal government issued biological opinions under the Endangered Species Act that required higher water levels to protect endangered suckerfish and higher flows to protect threatened coho salmon. As a result, they are seeking improved water supply certainty as part of the Klamath Basin Restoration Agreement. They are also asking for reliable and affordable power and protection against added regulatory restrictions if new threatened or endangered species are listed in the area.
But
"Siskiyou County Farm Bureau is concerned that in dry years, such as this year and last year, the Klamath will dry up in spots and the government will be looking to the Scott and Shasta rivers to make up those flows," said Siskiyou County Farm Bureau Past-President Mike Luiz. "We are worried about the loss of water storage during dry years at the four reservoirs: Copco 1, Copco 2, JC Boyle and
Other areas of concern include encroachment of private property rights, a reduction in funding for restoration projects, increased regulation and water quality issues.
"The loss of Copco II and
Downstream irrigators also say they wonder if the removal of the four dams would even lead to the well-intended result of a rejuvenated fish population.
"We would like to make certain that this dam removal goes through a peer review process and is based on sound science," Luiz said. "As this plan moves forward, we will ensure that our voice is heard."
Copies of the Agreement In Principle and accompanying letters from the Department of the Interior to the states and PacifiCorp can be found at www.DOI.gov.#
http://www.cfbf.com/agalert/AgAlertStory.cfm?ID=1181&ck=2AC2406E835BD49C70469ACAE337D292
Growers face difficult planting choices
California Farm Bureau Federation Ag Alert – 11/26/08
By Steve Adler, Executive Editor
Clay Goodman removed the stumps of wind-damaged almond trees from a
For
Farmers are making tough decisions now and in the coming weeks regarding what to plant, how much to plant and how to best use a water supply that could fluctuate dramatically depending on how much precipitation the state's watersheds receive over the next five months.
Livestock producers face similar difficult decisions. Do they start severely culling their herds, or do they expand? The high cost of feed will have a major impact on those choices.
Throw into the equation the regulatory challenges created by legislation such as the Endangered Species Act and the Clean Water Act, and the picture becomes even murkier.
"Clearly for many
"Fourth, the same issue in reverse on the output price side. Not only have field crop prices dropped, but the stronger dollar and worldwide recession cause serious concerns for the market for wine, nuts and crops that depend on export markets and economic growth," Sumner said.
Water drives orchard and vineyard decisions
There is continued interest among growers for planting certain permanent tree crops like almonds, pomegranates and olive trees for oil--but only from growers who have a reliable water supply. Some
"Growers definitely are taking account of the amount of irrigation water they will have next season," said John Duarte of Duarte Nursery in Hughson. "Pistachio trees are in high demand from farmers because consumer demand for pistachios continues increasing, and the trees can tolerate brackish irrigation water and so could be planted in parts of the
He said growers with adequate water "are attracted to almond trees by strong consumer demand and strong prices."
Goodman removed the trees earlier this year and now is pulling out the stumps so he can replant.
"The trees in this orchard are only 11 years old and are in their prime, so I didn't want to rip out the entire orchard and lose that production," he said. "Had it been mostly old trees, we would've cleared the whole thing. But it would cost more than it would be worth to lose those with four to five years of no production."
Barry Bedwell of the California Grape and Tree Fruit League in
"We expect a contraction of tree fruit acreage and production for peaches, plums and nectarines," he said.
He said the economic outlook is such that there must be a major restructuring of the stone-fruit sector.
"Unfortunately, I'm not sure it's going to be accomplished in an orderly fashion to maximize benefits for the growers and shippers," Bedwell said. "Given the credit situation, it will be very difficult to get financing for tree fruit operations in 2009."
Rich Hudgins of the California Canning Peach Association in
"We're cautiously optimistic for the 2009 crop. There's a supply-demand balance in the sector and we're crossing our fingers that Mother Nature will be kinder to us than in 2008, when there was a significant amount of frost damage. That reduced our 2008 crop by about 15 percent."
Hudgins noted that the downturn in the economy might actually have a side benefit for fruit growers.
"To the extent that people are eating more meals at home, there may be an increase in the opportunities for canned peaches to be served. School lunch programs also may present a renewed opportunity for canned peaches to offer a more cost-effective alternative to school-lunch fruit requirements," he said.
Commercial sales of fruit trees have been very low, with one exception--cherries, w said Robert Woolley of Dave Wilson Nursery in Reedley.
"I don't think the decline in fruit tree sales is in response to the financial meltdown. It has more to do with the dramatic changes happening in the southern
One segment of the fruit sector that continues to do well is citrus, particularly the popular new mandarin varieties.
"There's a big surge of Clementine interest for 2009 plantings that wasn't anticipated by the nursery industry," said Roger Smith of TreeSource Citrus Nursery in
"There are other things being planted. Lemons have picked up in our region as well as the late-season navels that are really good, have a strong shelf life and great shipability," he said, adding that cara-cara pink navels and some late seedless varieties like Golden Nugget also are being planted.
"I tell my growers who are struggling to be of good cheer because citrus isn't what is struggling, it is what they have that is struggling," Smith said. "There are alternatives out there where they can make, in some cases, very good money if they just take out things that are not making money and go in with other citrus and be successful."
Agreeing with that observation is Nat DiBuduo, president of Allied Grape Growers in
"All grapes in 2008 were harvested and sold for higher prices, but production was off," he said. "The wineries have already started talking about inventories in 2009. I think that bodes well for growers. And, for the first time, I'm recommending growers go out and actively seek planting contracts--but farmers need to understand their own economics to make sure they can make a living."
For table grape growers, two major concerns are water and the work force. If things go well, production in 2009 could reach 100 million boxes, an increase of 3 percent to 4 percent over this year, said Bedwell.
"Water is always a concern, but for table grapes it's even a higher concern than for many other crops grown in
The outlook for being able to hire an adequate work force is mixed, Bedwell said, emphasizing the need for comprehensive immigration reform. "The reality is that the weaker economy has placed more individuals back into farm labor, but that is no guarantee of an adequate work force without comprehensive immigration reform," he said.
Field-crop farmers watch markets, skies
For annual field crops such as cotton, wheat and rice, there is no definitive trend at the present time. Wheat, for example, will be planted--or not planted--depending on where a grower is located, said Robert Falconer, executive director of the California Wheat Commission.
In the
"Some of them will go ahead and seed it. If they get good rain, they may make a grain crop. If they don't get the rains, they may cut it for hay. They may go ahead and plant, but depending on what happens will determine what they do with the crop," Falconer said.
"Those who are in the
Many farmers in the
Kole Upton, who farms in
"I use wheat as a rotational crop in the winter every year, and then I rotate into corn or tomatoes or something else," he said. "We're going to have to plant something in the winter. We're going to have a certain number of our acres that are going to be planted with a winter crop, and when we do the analysis, wheat comes out the best."
Mark Bagby of the Calcot cooperative in
"Upland cotton prices have collapsed because of the slowdown in the world economy and textile mills consuming less cotton. With alternatives such as processing tomatoes, corn, alfalfa and other produce, more cotton acreage is being converted to these more profitable crops," he said.
According to Bagby, the one bright spot is the rise in price of cottonseed. There's huge demand from dairies, but with the state's reduced acreage, there's less supply and that has driven up prices.
Tim Johnson, president and CEO of the California Rice Commission in
"The problem is you're not going to be able to make a plan until you have more information, and there isn't any information on the factors that impact farmers: no idea what the water situation is going to be. You really won't know what level of impact that's going to have until the irrigation districts get a chance to digest that. That won't happen until the spring," he said.
The second factor rice farmers will look at is the price of alternative crops, such as processing tomatoes, safflower, corn and sunflowers, Johnson said, adding that growers won't have a sense of where the market is going until January or February.
For alfalfa producers, a number of variables will impact planting intentions, including water, market prices, fuel costs and consumer demand, said hay market analyst Seth Hoyt of Ione. "But water for irrigation is the key to success in 2009."
The hay market has been dropping in the past couple of months and a bigger decline emerged in the past few weeks.
"The biggest negative right now for hay growers is the milk price. Dairy farmers buy 75 percent of the alfalfa hay in
"Falling input costs in 2009 will help dairies and hay growers alike, but remember that corn prices are dropping, too," he said. "As prices fall on both sides of the balance sheet, it's hard to say how prices will settle and whether there will be an adequate profit margin for farmers."
Vegetable acreage may decline
Lettuce,
"I'm hearing from many of my members that acreage is being cut back. The commodity that I'm hearing more than any other is iceberg lettuce. A lot of it is because of the water situation. They may not have the water to irrigate the crop," said Jim Bogart, president and general counsel of the Grower-Shipper Association of Central California in
Some Imperial Valley lettuce growers are electing to reduce their lettuce acreage and plant other commodities like wheat that are bringing better prices, reports Ayron Moiola, executive director of the Imperial Valley Vegetable Growers Association in El Centro. Other vegetables such as broccoli, cauliflower and carrots are also trending down, but there won't be a huge decline in those commodities.
"I think we are going to see almost the complete end of asparagus in the
The commission is currently surveying members to determine how much acreage will be planted next year. Demand for strawberries continues strong and speculation is that acreage will at least remain the same next year and may even increase.
For farmers who grow processing tomatoes, water tops the list of uncertainties because of both the drought and the legal actions that have reduced supply, said Bret Ferguson of Lemoore, who chairs the California Tomato Growers Association board. The world economy, including instability in fuel and fertilizer costs, is also a concern, he said.
"We expect fewer acres will be planted and that processors will have trouble getting all the contracted acres they need. We planted about 270,000 acres last year and the price was $70 a ton, which was good. But, with the water situation, I think we'll have trouble getting more acres planted. We're in price discussions with processors now," he said.
Diversified grower Larry Hunn of
"Our acreage is in our vegetables, and all of that is pretty consistent from year to year. We don't fluctuate too much. Our attitude is: Keep doing what we do the best and try to stay diversified rather than trying to jump into one crop or another. That way if you have something go downpoor production or price--then it doesn't hurt you as badly," he said.
"We try to keep our rotation about the same year to year," he said. "It's kind of hard to guess the market, so we try to be stable with what we do and not try to chase the market too much."
As farmers work to finalize their 2009 plans, UC Davis agricultural economist Steven C. Blank observed that in
"Farmers are making some shifts one year to the next based on market conditions, but overall, they are looking at sort of balancing their exposure to different types of markets and risk," he said.
"When you are talking about getting into tree and vine crops, that is because in the long run, they have performed more profitably, but they are more risky," he said. "So in the short run, like this year, if water availability is a big source of uncertainty, they may put off planting the new orchard and put in an annual crop to hold on and wait and see."
Blank said he thinks farmers are going to be very conservative in their plans.
"If you've got a contract to deliver some commodity, you've got to deliver that. And yet you may prefer to not be in that market because of cash flow needs and what not. So there's a lot of juggling going on right now," he said. #
http://www.cfbf.com/agalert/AgAlertStory.cfm?ID=1179&ck=DABD8D2CE74E782C65A973EF76FD540B
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