Agribusiness Management Conference charts future for Valley agriculture

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(November 5, 2015) — Industry leaders’ views on the future of Central Valley agriculture and water policy were key themes in the 34^th annual Agribusiness Management Conference hosted by the Fresno State Institute for Food and Agriculture on November 4.

The one-day conference brought together 320 attendees from business, economic, political and research sectors, as well as Fresno State faculty, staff and students.

National columnist Victor Davis Hanson served as the featured presenter, and the fifth-generation raisin farmer capped the conference with his speech entitled ‘Future of Farming and the Valley – AD 2030”.

His presentation discussed present and future water management issues that California faces as its population is taxing the current water systems’ capacity, especially after a four-year drought. He suggested new water storage projects be initiated and fewer surface-water allocations be permitted to non-sustainable environmental causes.

Hanson also spoke on themes such as our nation’s historically-unique diverse culture and the widening cost-of-living between his small hometown of Selma and Palo Alto, where he serves as a Senior Fellow at Stanford University’s Hoover Institution.

Terry Barr, senior director for CoBank’s Knowledge Exchange Division, opened the program with national and international economic forecasts. He expected continued slight to moderate gains in the United States’ gross domestic product the next year, but noted that the federal government will soon have to cut its spending due to increasing annual deficit interest loads. According to Barr, the overall strength of the U.S. market remains favorable, while other leading Asian, European and healthy emerging countries will face limited market growth.

Barr expected U.S. interest rates to begin a progressive climb in 2016 after they have been held lower by the Federal Reserve Board in recent years to stimulate consumer spending and encourage growth out of the national recession.

Lynn Jacquez, a principal with CJ Lake, a Washington D.C. law firm, confirmed media reports that immigration reform efforts by the U.S. Congress will be tabled until after the 2016 elections. The halt on new federal legislation means that entry of new foreign labor will again be limited this upcoming year, especially compared to rates a decade ago.

Jacquez did discuss behind-the-scenes legislation options and suggested that the House of Representatives will have to act before the Senate. Key parts of any reform legislation will likely touch on the treatment of the current immigrant workforce, limits on the number of future foreign workers, wages and working conditions standards, and the workforce’s portability to move between different work environments.  She encouraged area farmers to contact their national legislators to give feedback in these areas to help form effective legislation.

A roundtable entitled ‘California Drought: Economic Impacts, Groundwater Assessment and Regulatory Environment’ featured several area agricultural water management experts.

Dr. Richard Howitt, UC Davis agricultural and resource economics professor emeritus, noted that water is becoming a true agricultural commodity as we move towards the initiation of the state’s Sustainable Groundwater Management Act (SGMA). The new legislation, which monitors and sets limits on agricultural water usage, will change how farmers weigh the cost analysis of irrigating various crops vs. selling water rights to other farmers or banking water for future years in fallow land. He noted that Orange County agriculture has managed water adjudication in similar fashion the past 35 years, and the water usage has developed into a fluid market system that gives farmers various options to manage water usage and still be profitable.   

Sarge Green, a California Water Institute program director, covered basics of the SGMA plan that will go into effect in many high-priority water management areas such as the San Joaquin Valley in 2020, while high and medium priority locations will begin water usage monitoring in 2020 and 2022, respectively. He discussed how six groundwater sustainability agencies with different policies will share the area’s Kings River Basin water allotment, while other farmers outside of agencies’ purveyance will be managed by their counties.

Mike Wade, California Farm Water Coalition executive director, used crop choices and water efficiency as key influencers in modern food production. He cited actress Cameron Diaz’s bestseller ‘The Body Book’ as an example of the modern consumer’s drive for more food knowledge, and how the wide variety of food options that make agriculture prime players in the marketplace. Farmers have to weigh factors such as previous crop experience, water availability, soil and climate variability and market forces when determining which crops to raise. However, Wade stressed they can use new water-saving technology, equipment and software to refine the process and be successful.

A final roundtable on ‘Market Dynamics: A Future Beyond the Drought’ presented successful area business leaders who gave strategies in their ever-evolving agricultural industries.

Fresno County Farm Bureau CEO/Executive Director Ryan Jacobsen opened the discussion with remarks about the strength of the local agriculture economy and the demand for California-grown products, especially in specialty markets. High-paying agricultural job opportunities abound in our area thanks to product demand and the Central Valley’s unique Mediterranean climate, according to Jacobsen. He also noted that farmers are one of the top-three most trusted professions nationwide, and the area’s reputation for providing safe, nutritious food will inspire generations of farmers and consumers in the future.

David Krause, Wonderful Citrus president, detailed the company’s emphasis on investing in new agricultural products in order to capture ever-competitive marketspace and consumer attention. Wonderful has used extensive marketing campaigns to create consumer demand in popular citrus products such as Cuties and Halos Mandarins. Krause also noted that encouraging talent to enter industry is vital to its long-term health, while the marketplace is becoming top heavy as the top 20 percent of its customers account for 80 percent of sales.

Harold McClarty, HMC Farms president and CEO, spoke about his family farm’s expansion into international markets as the economy of producing and selling stone fruit domestically becomes more challenging. HMC’s first family ranch was purchased in 1887, and is now composed of 20 ranches and processing facilities in Reedley, Traver and Kingsburg as it has constantly tries to expand new directions. A recent innovation is to market specific varieties of grapes, peaches, plums and nectarines with distinctive packaging and information to educate consumers about their many options, similar to the apple industry. McClarty expects many of the area’s stone fruit trees to continue to be converted into nut orchards, He estimates the number of independent area stone fruit growers to be around 200 - less than a third of the 700 growers seven years ago.  

Dr. Eric Erba, California Dairies senior vice president and chief strategy officer, revealed the difficulties of small dairy farms to keep pace with rising operational costs, even in the state’s strongest agricultural milk co-op and the nation’s leading dairy state. The numbers of producers among his company’s three co-op dairies have dropped by over 30 percent the past 10 years, yet productivity has remained relatively stable. To stay strong economically and to explore new markets, his co-op has expanded its product lines to dry milk powers and condensed milk items, as well as specialty products like cream cheese.

Even with all the challenges mentioned by various speakers, there was a positive air at the event as consumer demand remains high and the economy continues to improve.

On a personal note, McClarty noted how special it was for him to join Hanson on the speaking docket. The two grew up together as family friends, and he even remembered sharing car rides to wrestling practice.

Fittingly, the HMC Farms owner gracefully summed up the agriculture industry’s balance of challenges and rewards in a poem written by a recently-retired colleague.