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July 2010, Volume 16, Number 3

Water, Lettuce, Commodities

Water. In May 2010, a federal judge ruled that biological opinions that restricted pumping water from the Sacramento-San Joaquin Delta to farmers and urban residents in the San Joaquin Valley were flawed because they did not consider the effects of pumping restrictions on people. The judge's rulings allowed more water to be pumped south of the Delta via federal pumps that provide water primarily to farmers.

Normal rainfall in 2009-10 allowed the federal Central Valley Project to give farmers north of the Sacramento-San Joaquin Delta 100 percent of their allocation, municipal and industrial water users south of the Delta 75 percent, and farm users south of the Delta 45 percent; the later was up from 10 percent in 2009. Statewide precipitation was 115 percent of average and reservoir storage at 95 percent.

Both Lake Oroville and Shasta Lake are almost full, which may make it harder to enact an $11 billion water bond on the November 2010 ballot to develop more water storage and conveyance facilities. A major argument in favor of the water bond was high unemployment in the San Joaquin Valley, and the prospects of even higher unemployment without additional water.

However, EDD data show that farm employment has been increasing, and fell only slightly between 2008 and 2009, down 0.5 percent, compared to construction, where the number of jobs fell 18 percent.

The Williamson Act has since 1965 reduced property taxes on farm land that contractually cannot be developed for housing. The state government provides payments to local governments to offset the lost property taxes, but the amount has been reduced, from $38 million a year to $1,000, which means that some local governments get very little.

Lettuce. About 80 percent of US lettuce is produced in the Salinas Valley in spring, summer and fall. The industry produces lettuce in western Fresno county in the fall and spring en route to and from Yuma and Imperial for winter production on the Mexico-US border. There are about 400,000 acres of iceberg and romaine lettuce in California and Arizona.

Researchers aim to develop lettuce plants and machines to save labor, such as machines that thin and weed lettuce crops using digital cameras to "distinguish" plants and weeds and computers to decide when to eliminate a weed or plant. Lettuce plants are normally thinned by hand at a cost of $100 an acre so that fields have one plant every eight to 12 inches. Machine thinning using knives or flames costs about $35 an acre.

Olives. California olive tree acreage is increasing because of mechanization-- newly planted trees can be harvested by machine, making US-produced olive oil competitive with imports. The US consumes about 70 million gallons of olive oil a year, and California produces less than a million gallons.

About two-thirds of the 24,000 acres of California olive trees are super-high density, with up to 700 trees an acre planted in hedgerows like a vineyard. Trees yield about two tons of olives an acre in the third year, and reach yields of five tons by the fifth year. A ton of olives provides 42 gallons of olive oil, so an acre of mature orchard generates 200 gallons of olive oil a year.

The key to California's olive revival is mechanical harvesting. Hand-harvesting olives costs $300 to $500 an acre, while machine harvesting costs $250 an acre.

Strawberries. Strawberries are a success story, with production and prices climbing for the 500 California growers who produce almost 90 percent of US strawberries. Farmers want "clean" soil to plant strawberries, which they used to achieve by covering fields with plastic and injecting methyl bromide into the soil.

Methly bromide was banned because it depletes the ozone layer protecting the earth, and strawberry farmers switched to methyl iodide, a chemical less harmful to the ozone, but with more potential hazards to human health. The federal Environmental Protection Agency approved the use of methyl iodide in 2007, and California gave provisional approval for its use; a final state decision is due in summer 2010.

Salyer. Former SK Foods owner Frederick Scott Salyer was charged under the federal Racketeer Influenced and Corrupt Organizations Act in February 2010 with directing a decade-long scheme to sell processed tomato products at inflated prices. SK Foods allegedly paid bribes to buyers for Kraft and other food firms so that they would buy the company's tomato paste, peppers and other products.

Salyer is part of a prominent family that were, along with the Boswell family, kings of cotton production in California's Central Valley. Scott Salyer borrowed money to expand Salyer American's cotton business, but eventually lost 40,000 acres of land to banks when cotton prices fell. Salyer American switched from cotton to tomatoes in the early 1990s; Scott bought SK Foods while Boswell bought most of Salyer's land in the mid-1990s, and Scott sued his father and siblings, and got control of Salyer American Fresh Foods in 2007.

About 95 percent of the tomatoes processed into ketchup and other products are grown in California and processed by four firms; the largest is Morning Star. SK Foods had 10 to 20 percent of the market in 2007 when a federal probe began that has led to 10 people pleading guilty to charges that include relabeling lower quality products to appear to be higher quality. SK, which went bankrupt in May 2009 and was sold for $39 million to Singapore-based Olam International, allegedly sold moldy tomato products labeled as normal to food companies that did not detect the problem.

California farmers expect to plant 280,000 acres of processing tomatoes in 2010 yielding an average 45 tons an acre, down from almost 310,000 acres in 2009. The 12.6 million ton crop is expected to be sold for less than the $80 a ton or four cents a pound growers received in 2009.

The price of fresh tomatoes fell sharply in spring 2010 after spiking in the aftermath of a Florida freeze. Grower prices that topped $1 a pound in March 2010 fell to $0.20 a pound by June 2010, as post-freeze plantings ripened, producing a glut of tomatoes.

Roundup. Monsanto developed Roundup Ready seeds that allow farmers to spray fields with herbicides to kill weeds and not harm crops. More than 90 percent of US soybean and 70 percent of US corn and cotton is planted with genetically engineered seeds that usually make them Roundup Ready. In June 2010, the US Supreme Court reversed a federal appeals court decision that blocked the sale of Roundup Ready alfalfa seeds.

However, "super weeds" are developing resistance to Roundup and its generic equivalent, glyphosate, making Roundup Ready seeds less valuable and threatening to reverse the trend toward minimum-till farming. The US has about 170 million acres of corn, soybeans and cotton, and up to 10 million are affected by Roundup-resistant weeds.

P.J. Huffstutter, "Tomato king Frederick Scott Salyer's journey from boardroom to jail cell," Los Angeles Times, June 17, 2010. Cary Blake, "Mechanization crucial for lettuce industry," Western Farm Press, April 19, 2010. Bettina Boxall, "Despite dire predictions, California farm jobs aren't disappearing," Los Angeles Times, February 22, 2010.

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