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January 2022, Volume 28, Number 1

California: Dairy, Cannabis

Dairy products are California’s most valuable farm commodity, worth $7.3 billion in 2019. California has 1.7 million or 18 percent of the 9.4 million US cows, but the state’s dairy industry may shrink due to rising water and feed costs. Feed represents about 55 percent of production costs for dairy farmers, and the persisting drought requires farmers to buy more hay and corn to feed their cows.

Between the 1980s and 2000s, California dairies moved from the urbanizing Inland Empire of southern California to Tulare and other San Joaquin Valley counties where land was cheaper. New dairies were often larger, with 1,000 or more cows, and California surpassed Wisconsin as the leading producer of milk in the early 1990s. The California coops that buy most milk required farmers to reduce milk production after 2009, and new state environmental regulations have increased the cost and complexity of dairying in California.

Americans are consuming more dairy products as cheese rather than fluid milk, which encourages the expansion of dairies in Colorado, Texas, and other midwestern states where land and feed are cheaper. Some California dairies are shrinking and shifting their land to almonds and other nuts, which have been more profitable.

About five percent of US milk is organic, defined as cows having access to pasture and limiting the conversion of conventional cows to organic. Organic milk is often ultrapasteurized so that it has months of shelf life, which makes local supplies less important.

Ever fewer organic milk processors in the northeastern US means that some organic dairies have been forced to close because they cannot sell their milk. Most organic milk is from large dairies west of the Mississippi; Aurora Organic has 27,000 dairy cows on four farms in Colorado and Texas.

Cannabis. Some $24 billion worth of cannabis was sold to US residents in 2021, and another $4 billion to Canadians. Most sales were to young men; two-thirds of buyers are men under 35. About 45 percent of US sales are cannabis flowers, 20 percent are vape pens, and 10 percent each are pre-rolls, edibles and concentrates.

The federal government has kept cannabis on the Schedule 1 list of drugs that have no currently accepted medical use, which means that federally regulated banks cannot deal with cannabis producers or retailers. Marijuana plants are subject to powdery mildew, and neighbors often complain about the smell of marijuana plants.

There are sparse data on production and consumption by state. Federal law prohibits moving cannabis over state borders, but California is believed to the largest producer and consumer. Oklahoma has over 9,000 licensed marijuana farms, more than California, due to low startup costs of $2,500 for a license, far less than in other states. Oklahoma growers can produce cannabis for $100 a pound and sell it for $3,000 a pound or more in California or New York if they are willing to risk moving the cannabis over state lines.

The acreage of raisin grapes has been declining due to falling US consumption and rising imports. Most raisin grapes are picked by hand and laid on paper trays to dry into raisins in the fields, but the Sunpreme variety dries on the vine into raisins and can be harvested by machine. Sunpreme grapes do not dry into raisins uniformly, and up to 20 percent of the raisins are lost because they drop to the ground before or during the harvest. Despite these issues, Supreme yields three to four tons of raisins an acre, above the usual two to three ton yields from hand-harvested raisin grapes.

California lettuce growers made the transition from Salinas to Yuma in late October 2021 with prices at their peaks for the year, about $22 a case for Romaine lettuce and $32 a case for iceberg lettuce. Lettuce prices rose further in November 2021 toward $2 a head for a 24-head carton of iceberg lettuce.

California has two table olive processors, Bell-Carter and Musco Family Olive. Bell-Carter canceled most of its grower contracts in 2019 and began to import olives from Spain and elsewhere to process in the US, while Musco urged California growers to replant their olive orchards with high-density dwarf trees whose olives can be harvested mechanically. Traditional olive orchards with 80 trees per acre yield three to four tons of hand-picked olives an acre, while high-density plantings with over 200 trees yield six to seven tons.

Controlled Environment Agriculture (CEA) or indoor farming is expanding, taking the form of greenhouses and vertical structures that protect growing plants. Japan as the most vertical farms that rely on grow lights to produce fresh produce, but the concept is spreading in other areas where consumers are willing to pay premium prices for organic and local produce.


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