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October 2017, Volume 23, Number 4

California Agriculture

County agricultural commissioners released reports of 2016 revenue in summer 2017. Kern county led the state in farm sales, with $7.2 billion worth of commodities sold, led by grapes, almonds, citrus, pistachios and milk.

Monterey county farm sales fell from $4.7 billion to $4.3 billion, largely because of lower vegetable sales of $2.8 billion in 2016. Leaf ($785 million) and head ($480 million) lettuce was the major crop in Monterey, followed by strawberries, $725 million, and broccoli, $390 million.

Dole. Dole Food, owned by David Murdock, is the world's largest fresh fruit and vegetable firm, with sales of $4.5 billion in 2016. Dole, which Murdock took private in 2003, became public in 2009, went private in 2013, and wants to become a public company again.

Dole plans to sell its southern California headquarters and buy Dole Plantation in Oahu, which is owned by Castle & Cooke Properties, Murdock's private real estate firm. Dole does extensive business with privately owned Murdock firms.

Dole plans to close a berry cooling facility in Oxnard, laying off 172 UFW-represented workers. Dole in September 2017 announced plans to lay off 268 UFW-represented workers in its Watsonville berry operations.

Hiji Brothers and Mandalay Berry Farms also closed their Ventura county operations, citing saltwater intrusion and the rising minimum wage. Dole farms over 124,000 acres worldwide, including 1,600 acres of Dole-owned land in the US.

Cannabis. California growers produce five times more marijuana than is consumed in the state, promising trouble after the state bans exports of marijuana to other states after January 1, 2018. California produced 13.5 million pounds of marijuana in 2016 but consumed only 2.5 million pounds.

Marijuana sales in California were about $8 billion in 2016, including $2 billion for medical marijuana and $6 billion for recreational marijuana.

Mendocino county has thousands of cannabis growers, but only 700 applied for permits to grow marijuana legally in 2017. The California Growers Association says that 10 percent of the 35,000 growers in the Emerald Triangle, which covers Mendocino, Humboldt and Trinity counties, have applied for permits, with those not applying deterred by paperwork, fees and taxes. The licensing system allowing growers to operate legally begins January 1, 2018.

There are 1,500 Hmong cannabis growers in Siskiyou county, many retired from nonfarm jobs who moved to the area beginning in 2015. A third of the names in Mount Shasta Vista are Hmong, and satellite images show that nearly all of the Hmong ranchos are growing marijuana "for personal use." Many Hmong growers have 99 plants, since 100 plants can bring a federal prison sentence of five years.

The US resettled some 300,000 Hmong after the Vietnam War to reward them for cooperating with the CIA. When the local sheriff began raiding Shasta Hmong growers in 2016, destroying an estimated 20 percent of their crop, lawyers representing the Hmong sued, alleging interference with Hmong rights.

Many of the workers employed in cannabis production live and work near where marijuana is grown and trimmed, sometimes in grower-provided housing or tents. Wages are typically $20 an hour plus $150 per pound of trimmed bud, enabling some workers to earn $1,000 or more a week, which is typically not reported or taxed. If growers obtain permits, farm labor and housing laws will apply to the workers they employ. With labor half or more of production costs, some growers are unlikely to register.

Euromonitor estimates US retail sales of marijuana at $6 billion a year, much less than the $120 billion a year market for tobacco products. Wholesale marijuana prices, as tracked by New Leaf, peaked in September 2015 at over $2,100 a pound and were $1,600 a pound in July 2017. Legalization of recreational marijuana is expected to reduce the share of medical marijuana sold, as users forego getting a doctor's certificate in order to buy marijuana.

Some cannabis growers are trying to differentiate their product, emphasizing that it is grown without chemicals, although only USDA can certify commodities as organic. Cannabis grown indoors with lights often relies on fertilizers but looks better to consumers and often has more tetrahydrocannabinol or THC, a measure of potency. Some expect marijuana to splinter into a variety of submarkets, as with beer and wine.

Almost two-thirds of Americans live in the 29 states where medical marijuana is legal, and 20 percent live in states where recreational marijuana, usually up to an ounce, is legal. Federal law prohibits DOJ from spending money to block state laws that permit medical marijuana, a provision that AG Jeff Sessions wants to change.