Valley agriculture navigates expensive production, colder weather, and low crop prices.
Natalie Willis, Reporter, Valley Ag Voice
Unusual weather events, higher input costs, and lowered crop prices hindered agricultural economics in the Central Valley this year, creating a grim outlook for local producers.
According to Aaron Hedge, chair of economics at Cal State Bakersfield and director of the Grimm Family Center for Agriculture Business, Central Valley farmers will face a lack of return for their work this year as well as an impacted labor market.
“In terms of consumers in the short term, they may have the inconvenience of not getting some stuff, but in the long term, not much,” Hedge said. “But it could be detrimental for some farmers if they’re not able to plant and they lost the entire season. They still have bank loans and all of these other things…if they’re on the verge of not being extremely profitable, that might push them over.”
Jenny Holtermann, a Kern County fourth-generation almond farmer, explained that heavy rainfall and a colder summer obstructed the bloom period for almonds, delaying normal harvest season from late July to early August. The presence of a tropical storm further delayed the process.
According to Holtermann, whose homestead received roughly an inch and a half of rain last weekend, they stopped shaking trees for a few days to mitigate the number of almonds on the ground that could be susceptible to mold and mildew.
“We really don’t know the damage of that yet, but the goal was to get them all dried and then picked up…with the weather and the bloom situation we had, [it] kind of slowed down the progress of the almonds, and we started harvest later than we usually do,” Holtermann said.
Industries outside of traditional farming practices, such as produce haulers, have also felt the impacts of the delayed harvest. According to David Nickum, president and CEO of Valley Farm Transport, his company and truckers were mainly affected by late production.
“We haven’t really seen so much production being off as much as we’ve seen production being late,” Nickum said. “I would say in most regions so far that we’ve hauled, the production’s been two weeks late, and that’s mostly because of the late rains that we had in the winter months.”
Along with disruptive weather, Central Valley almond farmers were faced with a low return on the market. U.S. almond prices fell to a 20-year low ahead of harvest, and almond supplies are expected to continue outweighing demand.
“The almond pricing has been pretty bad, pretty low,” Holtermann said. “The almond pricing has been very low the last couple of years, and it flirts with that breakeven price point, which has kind of put almonds in a hard situation.”
Hedge explained that farmers in the Central Valley are likely to take a hit from lower market prices, adversely affecting their ability to invest in farm labor as well as a reduced return on what they already put into the economy.
HIGHER INPUTS
Holtermann also cited higher input prices as an obstacle for small farmers, further diminishing return rates on agricultural investments.
“Inputs have been more expensive—the cost of everything is more expensive. I think the average person is probably aware of them, but everything is more expensive now,” Holtermann said. “Fertilizers are more expensive, parts are more expensive, water is more expensive…but then our return—the amount that we’re selling our almonds—has been lowered.”
Increased input costs have permeated the entire agriculture industry, with the U.S. Department of Agriculture explaining that costs are expected to elevate through 2024. Some input costs, such as fertilizer and chemical expenses, were projected to decline, but seed costs, labor, machinery, insurance, taxes, and equipment are steadily rising.
The USDA’s input cost projection trends showed that average crop prices will drop below breakeven levels, posing a threat to smaller farms.
“There are going to be less and less acres being grown in the Central Valley, and there will probably end up being less and less family farms,” Holtermann said. “Without these family farmers, I hate to see what’s going to happen to the rest of these businesses and these small towns.”
