From left, Nat DiBuduo, president of the California chapter of ASFMRA, and award winners Harry Cline, Mark Borba and Ross Borba.
Most of the major California crops are facing a rosy future, thanks in large part to exports and despite drought that could cut production.
That was the consensus as major players in the tree fruit, grape, citrus, nut and dairy industries gathered in Fresno to give presentations for the Outlook 2014 Agribusiness Conference sponsored by the California Chapter of the American Society of Farm Managers and Rural Appraisers.
The scarcity of water seeped into nearly all of the talks but did not wash out hopes for continued growth in production and sales as global appetites -- particularly in China – heighten demand.
An example: Even with the drought, “we are telling the major chains there will not be a disruption in supply,” said Barry Bedwell, president of the California Grape and Tree Fruit League.
Speakers said relative prosperity for many agricultural commodities has led to spiking in some land prices and scarcity of land. In most markets, increasing profits have driven farm values to record highs, attendees were told at the close of the conference.
But properties in areas with threatened ground and surface water are at risk, speakers said, and everyone is paying closer attention to availability of water in the valuation of land. Consequences of the drought could be “dire” for some growers, and its effects could be felt in the years ahead.
While tree fruit production has declined, production of most nut crops has ballooned at the same that consumer demand has risen along with price. The market for land in some regions is driven by permanent plantings at the same time that investments could be threatened by the lack of water.
Some speakers talked of concern that food safety regulation could fall into a “one size fits all” approach that does not take into account variability among commodities. And some said further regulation of groundwater use is likely.
Here are some of the observations on the various commodities and a list of award winners:
It’s not yet clear how the drought will affect almonds, said Jim Zion, managing director of Meridian Nut Co. in Clovis and former chairman of American Pistachio Growers.
But he adds that there is concern that as growers turn to groundwater, salts are starting to build and that poses a problem for almonds.
“There’s good bloom this year, but what about the water situation?” he asks.
He pointed out that in 1976-77 there were 430,000 acres in the state in almonds, walnuts and pistachios. Today there are 1.3 million bearing acres.
The almond crop alone is at 2 billion pounds and much of it goes overseas.
All nut crops have benefitted from health claims that have boosted sales.
In 1987, research showed zero percent of those who purchased walnuts did so for health benefits, said Michelle McNeil, senior marketing director, international, with the California Walnut Commission and California Walnut Board.
In 2013, she said, 84 percent believe walnuts are healthy and health is the No. 1 reason for buying them.
McNeil said foreign markets are a key to sales and that India and Korea opened their doors to walnuts from the United States in the past two years. But China, opened in 2008, is the leading market for more than 200 million pounds.
She said the industry has reached only one third of domestic consumption potential.
Zion said the United States is the biggest global supplier, followed by Iran and Turkey, and added that that is unlikely to change.
Again, China is among top buyers of that nut. It’s expected the crop will reach 1 billion pounds within 10 years. He said there is some concern that deficit irrigation will “affect the crop two years out.”
One nut crop that has not seen tremendous growth is pecans. Zion said pecans are grown in multiple states, in Mexico and elsewhere, and there is “fragmentation in the industry.”
Shipments to China total nearly 100 million pounds. “China buys direct,” he said. Pecans are commonly sold at prices lower than walnuts. Producers are looking in to creating a federal marketing order.