Natalie Willis, Reporter, Valley Ag Voice
California’s agri-business landscape is undergoing another regulatory shift after a series of bills were signed from Governor Gavin Newsom’s desk. Some new laws, effective Jan. 2024, address water policy and minimum wage —significantly impacting agricultural production in the Central Valley.
Over 13% of the nation’s agricultural production value comes from California out of roughly 27 million acres of cropland and 16 million acres of grazing land, the U.S. Department of Agriculture reported.
According to the California Farm Bureau, rising labor costs have created a special challenge for farmers as the state employs the largest agriculture workforce in the nation. Coupled with a national net loss of 90,000 farms from 2007 to 2012, regulatory burdens continue to hinder family farm operations on both a national and state level.
As the state navigates these challenges, questions about the next generation of agriculture leaders, corporate takeovers, and increased regulations are gaining prominence.
California’s role in meeting global production needs is often shadowed by state regulations such as the Sustainable Groundwater Management Act, which is projected to take over a million acres of agricultural land out of production.
According to Brian Marsh, farm advisor at the Kern County extension of UC Agriculture and Natural Resources, different areas of the Central Valley will be impacted more than others based on groundwater dependence.
“We’re talking about this in a year where we have plenty of water it’s weird…growers have invested a lot of money into their permanent crops…so when water is short, usually what happens is their annual crops are the first things that they will not plant,” Marsh said. “I’m thinking once SGMA kind of settles in, and they’re more used to the amount of water that they’re gonna have access to, then I would see a change in permanent crop plants also.”
Small farms in the Central Valley will face a bigger hit from SGMA and other regulations than larger corporate farms will, Marsh explained. A study from UC’s Giannini Foundation of Agriculture Economics explained that the average corporate farm in California has more acreage and higher sales than the average partnership or individual proprietor farm — most individual proprietor farms cannot compete in terms of water usage labor costs, and other competitive outputs.
“If a farm has a lot of acres that are not planting all their acres, then they can use that water for the acres that they do have planted,” Marsh said. “For a smaller farm, the same percentage draw down of acreage would be the same, but that could impact them significantly — they’re doing 10 acres, and they only now have five. That’s a big difference from someone who manages 1,000 acres and now is working on 500.”
This highlights a growing trend in California’s agricultural landscape, which points to a decline in the number of farms since the 1970s. The drop-off in U.S. farms slowed in the early 80s, and a recent survey showed 2.0 million U.S. farms in 2022, down from 2.20 million in 2007, according to a report from the U.S. Department of Agriculture.
Similarly, farm acreage continued to decrease, with 893 million acres in 2022, down from 915 million acres 10 years earlier. Corporate farms, however, have been on a steady incline since 1974, according to the UC study.
The California Department of Agriculture noted that 95% of farms in California are family-owned, while non-family corporations make up roughly 1.3% of total farms — the remainder is operated as cooperatives and various other institutions. Of these, the UC study claims that 80% of California corporate farms are classified as family-held corporations.
Large farms with over $1 million in sales before expenses account for 3% of all farms but 47% of the value of production, according to the USDA Economic and Research Service. Almost every industry in California’s agricultural landscape has felt this shift, most notably of which are dairy farms.
Dairy is one of the top commodities in the Central Valley, with recent crop reports from Kern, Tulare, and Fresno counties showing the industry’s prominence in total gross value. However, as dairy farm families continue to supply a growing demand for dairy products, the number of dairy farms in California has decreased by 94% within the past 70 years, according to a report from Dairy Cares.
While the county crop reports show the total value of agricultural products in the Central Valley, they do not account for the cost of production, marketing, transportation, or other output costs, which have increased as a natural response to greater regulations.
Labor costs, for instance, rose again in October after a series of minimum wage bills were signed from Governor Newsom’s desk, including an increase to $20 an hour for fast food workers and $25 an hour for the healthcare industry. Even though these changes do not directly affect agriculture, when the minimum wage goes up, it sets a new standard for other businesses — corporate farms are better equipped to meet that challenge.
Recent innovations in the way California meets global production needs have surfaced as a respite against increased labor, production, and input costs. According to Clay Freeman, agriculture education coordinator for the Kern High School District, automation will continue in its pursuit to lessen labor burdens.
“The agricultural industry is very innovative, and it’s always growing in the direction of trying to do more with less,” Freeman said. “There are resource issues with regard to water and land and being cognizant of the environment, but labor seems to be the biggest one, and we’re just trying to be more efficient.”
New ag-tech innovations have emerged as a combatant against rising production and labor costs, driving the next generation of farming in the Central Valley. Along with regulatory bills, Newsom signed Assembly Bill 1016, which allows greater access to drones for pesticide applications to farmers. Jamie Johansson, president of the California Farm Bureau, explained that this bill will ensure that more farmers have access to precision technology, a growing necessity in modern practices.
“With aerial spray technology within reach of all farmers for the first time, this will help them save on crop protection costs by allowing drones to target affected areas instead of entire fields,” Johannsson said in a press release. “Drone use can also replace backpack spray and ground-based delivery systems with remote technologies, which protects our agricultural employees from close contact with pesticide applications.”
Other automation technologies also hope to lessen the decreased agricultural workforce, and many are eager to see new innovations in action. Michael Marsh, president and CEO of the National Council of Agricultural Employers, told Agri-Pulse Communications that the speed and cost of new technologies will determine whether producers stay in business.
“I don’t think technology adoption can come quickly enough and low cost enough to keep some of these legacy family farming operations in business,” Marsh said.
Still, the interest in agricultural pursuits has never wavered in Kern County, according to Freeman. Agriculture education in the district is evolving to meet the industry need for ag-tech, and the best innovations and practices are being added to the curriculum. Industry partners are paired with KHSD’s agricultural education programs, providing insight into current industry trends, needs, and technological innovations.
“They’re probably going to do some cross-curricular training with a program in drone operation,” Freeman said. “And so that’s some of the technology that’s out there with precision ag, which has to do with utilizing our resources more effectively…and being able to isolate and observe crops in real time with much less invasive approaches.”
The next generation of ag leaders in Kern County will be equipped in education, but Freeman also emphasized the importance of adapting to new technologies in order to co-exist with corporate operations.
“That family farm is where we really see the heart and soul of our industry, and so those generational farmers that come out of that family farm, they, in turn, become the leaders of our industry because they have such passion for it,” Freeman said