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January 2001, Volume 7, Number 1

California: $27 Billion Farm Sales

California's farm sales were $26.7 billion in 1999, up from $26.3 billion in 1998 but down from the record $27.2 billion in 1997. Farm sales in 1999 were led by $4.1 billion for milk products; $2.7 billion for all types of grapes; $2 billion for nursery products; $1.2 billion for cattle and calves; and $1.1 billion for all types of tomatoes.

The next leading commodities were: lettuce, $1.1 billion; strawberries, $890 million; flowers and foliage, $775 million; and hay and almonds, $695 million each. These were followed by cotton, $675 million; carrots, $555 million; chickens, $515 million; oranges, $415 million; and broccoli, $395 million. The next commodities were avocados, $325 million; eggs, $265 million; peaches, $240 million; rice, $235 million; and cantaloupes, $230 million. These 20 most valuable commodities accounted for $22 billion in farm sales, or 81 percent of the total.

Fresno county had the most farm sales in 1999, some $3.6 billion, followed by Tulare, $3.1 billion; Monterey, $2.4 billion; Kern, $2.1 billion; Merced, $1.5 billion; San Joaquin, $1.4 billion; San Diego, $1.2 billion; Stanislaus and Riverside, $1.2 billion each; and Ventura and Imperial, $1.1 billion each. The top five farm counties accounted for almost half of California's farm sales.

US consumption of fresh fruits and vegetables has been increasing, along with the number and variety of fresh fruit and vegetable items in supermarkets. Between 1980 and 2000, per capita consumption of fruits, vegetables and melons rose about 25 percent, and the number of produce items in a typical supermarket almost tripled, from 150 to 400. There has also been a proliferation of ethnic, gourmet and natural foods stores, which tend to emphasize fresh produce, as well as more farmers markets.

Fruits and Nuts. Per capita fruit consumption totaled 287 pounds in 1999 on a fresh-weight equivalent basis- about 122 pounds or 43 percent of fruit consumption is juice, followed by 103 pounds or 36 percent as fresh fruit- canned (20 pounds); dried (11 pounds); and frozen fruit (four pounds) collectively accounted for 12 percent of fruit consumption. The value of US-produced fruits and nuts was $12.2 billion in 1999, including $8.3 billion for noncitrus fruits and nuts and $4 billion for citrus.

Americans consumed an average 81 pounds of bananas in 1999, followed by 73 pounds of oranges consumed as juice, 47 pounds of grapes (26 pounds as wine and eight pounds as fresh grapes), and 48 pounds of apples (22 pounds as juice and 19 pounds as fresh apples).

Raisins. Harvesting raisins is the single most labor-intensive activity in North America involving hired farm workers, with 40,000 to 50,000 workers involved in cutting bunches of grapes and laying them on paper trays to dry in the sun, producing sun-dried raisins. There is a labor shortage each year, as farmers wait as long as possible to raise the sugar content of their grapes, and then worry that the drying grapes will be rained on, which can lower their value.

On September 1, 2000, rain caused the loss of about 10 percent of the drying raisin grapes. By September 14, 2000, it was reported that about half of the raisin grapes were harvested and drying on paper trays.

Piece-rate wages for harvesting raisins were 16 to 22 cents in 2000- most piece rates were 20 to 22 cents. More raisin grapes are being picked green and sent to dehydrators to dry into raisins, and more are being dried on the vine for machine harvest. Growers were paying $79 a ton in 2000 to have grapes picked and taken to dehydrators for drying grapes into raisins. If paper trays average 25 pounds, then one ton of grapes is 80 trays, and workers would be paid $17.60 for picking and laying one ton of grapes at 22 cents a tray. In addition to worker piece-rate wages, growers have to pay an overhead to FLCs, and to pay for rolling the trays and picking them up.

The raisin crop in 2000 was the largest ever, 427,400 tons. The 34-year old Fresno-based Raisin Bargaining Association, which bargains on behalf of the 5,000 raisin growers with 16 raisin packers, demanded a price of $1,100 a ton; raisin packers offered $600 to $900 a ton citing low domestic and foreign demand and the availability of Iranian raisins for $900 a ton. Turkey doubled its production to 300,000 tons in the 1990s.

Growers are paid when the price for the "free tonnage" is set-free tonnage is the percentage of the raisin crop that is sent to market; while "reserve raisins" are withheld to keep the price up, and growers are not paid for them until they are sold. In 1999, free tonnage was 85 percent of the crop- in 2000, it is expected to be 55 percent.

As the pricing deadlock continued in December 2000, some growers laid off workers, and did not pay their FLCs, who in turn did not pay workers. Gary Reitz, a Biola area grower and a farm labor contractor, said he reduced pruning and tying employment from the usual 180 workers to 80.

On January 1, 2001, California's minimum wage increased from $5.75 to $6.25 an hour, so growers would normally be expected to do as much pruning as possible in December 2000. However, there is likely to be a decision made in mid-January on how much of the 2001 raisin crop should be abandoned, so many growers are waiting until then to determine how many vines should be pruned to cut production and how many should be pruned in the usual way to maximize production.

Some of the most experienced workers interviewed who live in grower-owned camps noted that, in a good year, they can earn $15,000 working at $8 an hour.

Raisin growers asked the government to buy raisins to donate, and California's US senators sent a letter to USDA in October 2000 saying "We are pleased that the U.S. Department of Agriculture just announced plans to purchase 20,000 tons of raisins for use in the school lunch and other federal food programs…[they urged] a substantial additional purchase soon."

Industry leaders say that they hope to raise domestic demand by finding new uses for raisins, but that some raisin farmers will go out of business.

The Raisin Administrative Committee manages the inventory and flow of raisins under a federal marketing order, and released 233,000 tons (free tonnage) or 55 percent of the 2000 raisins for sale; the other 45 percent were held in reserve to bolster the price, which means that growers will not be paid for them until they are sold.

In October 2000, USDA officials raided Lion Packing in Selma, the second-largest raisin packer after Sun-Maid, to determine whether Lion had defrauded a US export subsidy program that gives packers extra funds when US raisins are sold abroad. Lion charged that the investigation was retaliation for its criticism of RAC, which Lion charged has withheld raisin grower monies.

World raisin production is up, reflecting a doubling of Sultana raisin production in Turkey in the 1990s and competition on dark raisins with Afghanistan, Iran, Mexico and Chile; about 85 percent of Turkey's raisins are exported. Many Thompson seedless grapes that would have been used to make wine were dried into raisins as the price wineries paid for Thompson seedless wine grapes dropped to $100 to $125 a ton.

The 16 California raisin packers are: Boghosian Raisin Packing Co. of Fowler; Biola Raisin Co. of Biola; Caruthers Raisin Packing Co. of Caruthers; Central California Packing Co. of Del Rey; Chooljian Bros. Packing Co. of Sanger; Del Rey Packing Co. of Del Rey; Enoch Packing Co. of Del Rey; International Raisins Inc. of Selma; Lion Enterprises Inc. of Fresno; Mariani Packing Co., with facilities in San Jose and Kerman; National Raisin Co. of Fowler; Premier Valley Foods Inc. of Fresno; Sun-Maid Growers of Kingsburg and Victor Packing Inc. of Madera.

Citrus. California produces most of US oranges that are consumed fresh: navel oranges are harvested in the winter months and Valencia oranges in the summer. Oranges are sold in 40-pound cartons, and in November 2000, growers were receiving $12 to $14 a carton for navels, up sharply from lows of $6 a carton in 1999- the break even price is about $7. In 1999-00, California produced 84 million cartons of navel oranges and 72 million are expected in 2000-01.

California has 48,500 acres of lemons, and they are projected to yield an average of 825 38-pound cartons of fruit in 2000-01. Ventura county FLC Henry Vega said that most workers pick about three bins of lemons a day; each bin has about 4,000 lemons- at an average piece rate of $15 a bin, this means workers earn about $45 a day, or one cent for every three lemons they pick.

About 20 million, or half of California lemons, are sold in 38-pound cartons for an average of $9.58 a carton in 1998-99 for consumers to use as fresh lemons and 22 million cartons are sold as concentrate for $1.20 a carton.

In June 2000, USDA announced that Argentina could ship lemons to 34 non-lemon producing US states. California growers sued USDA to halt the shipments, citing the fear of fruit flies and other diseases, but Sunkist Growers, the country's largest citrus cooperative, decided that it would sell some of the imported lemons from Argentina, earning a marketing fee.

Argentina produces one billion tons of the world's 4.2 billion-ton lemon crop, followed by Spain, 900 million tons and the US, 800 million tons.

Tree Fruits. Production of the three major stone or tree fruits- peaches, nectarines and plums- is expected to reach 3.2 billion pounds in 2000; peaches account for 80 percent of stone fruit, and California produces three-fourths of US peaches, followed by Georgia with six percent. In California, peaches yield an average 10 tons or 800 25-pound cartons an acre; nectarines yield six tons or 500 25-pound cartons an acre.

California produced an estimated 2.5 million 18-pound packages of cherries in 2000; most were Bing and Rainer varieties. Cherries are typically hand picked in buckets, dumped into bins, and then taken to packing houses, where they are sorted and packed. Prima Frutta Packing is experimenting with sorting machines that may reduce half or more of the packing workers, who are most often Hispanic women.

California is expected to produce 8.5 million seven-pound tray equivalents of kiwi in 2000, up from 6.2 million trays in 1999; California harvests kiwis between November and March.

California produced a record 713 million pounds of almonds in 1999-00; about 25 percent were exported. Production in 2000 is expected to total 640 million pounds.

Pomegranates, a fruit mentioned 28 times in the Bible, each have 840 seeds, regardless of their size. California produced $21 million worth of pomegranates in 1999; they grow on thorny bushes that can reach 15- to 20-feet high and are harvested in September-October. Workers wear thick leather gloves as they snap off the fruit and place it in five-gallon plastic buckets. Pomegranates are marketed in boxes that hold 30 pieces of fruit; growers receive $18 to $35 a box, and 800,000 boxes are expected to be marketed in 2000.

Olives. California olive growers received higher prices for olives in 2000, $925 a ton for manzanillos, up from $650 to $750 a ton in 1999. Production in 2000 was about 49,000 tons, down sharply from 141,000 tons in 1999. Farmers received about $564 a ton in 1999, down from a high of $706 in 1996, with some prices for Manzanillos, the major variety, reported in the $400 to $500 a ton range.

California is a relatively small olive producer; its 35,000 acres are dwarfed by 4.5 million acres in Spain and 500,000 acres in Morocco. Tulare county had 18,000 acres of olives in 1999, and they produced olives worth $47 million. Imported olives have half of the $150 million annual food service olive market.

The olive fruit fly has established itself in the olive growing areas of California, leading to traps but no destruction of trees in Tulare county, which produces 55 percent of California olives.

Olives are harvested from mid-September to mid-December. Picking olives by hand costs $250 to $350 a ton, making harvesting a major share of grower revenue. A mechanical harvester can reduce the cost to $100 a ton, but the machines are expensive, costing $200,000 each. However, olive growers must reconfigure their trees to facilitate the operation of the harvester, which is developed by Ag Right of Madera. The machine harvests one half of each tree on each pass.

As growers replant olives, most are expected to increase the density of trees, from the current 15-by-30 foot spacing to 10-by-20 spacing, and to top trees so that they can be harvested with an over-the-top-of-the-tree harvester. The California Olive Committee has subsidized the efforts of Ag Right to adapt the technology used to harvest dried-on-the-vine raisins.

There are two major olive processors, Bell-Carter in Corning and Musco in Tracy, and they announced in August that they would raise prices for extra-large Manzanillo olives from $650 a ton in 1999 to $925 in 2000. The 2000 tonnage is estimated at 54,000, compared with 141,000 tons in 1999. There were 10 olive processors in the late 1980s.

Figs. California produced $18 million worth of figs in 1999 from 16,000 acres. Figs are one of the oldest fruits cultivated by man.

Vegetables and Melons. Per capita use of all vegetables and melons is forecast to reach a record 459 pounds in 2000, including 165 pounds for fresh vegetables and 58 pounds of fresh potatoes. Fresh-market vegetable prices were very low in winter-spring 2000 because of good weather and yields. The four major processing vegetables-- tomatoes, sweet corn, green peas, and snap beans-are generally grown under contract with processors.

Lettuce. Iceberg lettuce, grown on about 100,000 acres of land in California, was worth $584 million in 1999; Monterey lettuce prices averaged $5.87 per 24-head carton, the lowest average price of the 1990s, down from $7 a carton in 1998. Lettuce prices were higher than usual in 2000, with prices reaching $14 for a 24-head carton in April-May and again in September.

Lettuce production shifts around the state. From May through October, lettuce is produced in the Salinas Valley. In November and March-April, lettuce is grown in western Fresno county, and in the winter months, lettuce is grown in the Imperial Valley and in southern Arizona.

Tomatoes. The US consumed about 2.2 million metric tons of fresh-market tomatoes in both 1998 and 1999. US production was about 1.6 million tons, of which 42 percent were grown in Florida (October-June) and 31 percent in California(June- October). US-produced fresh tomatoes were worth $920 million in 1999. The US harvested about 132,000 acres of fresh tomatoes. Farmers receive about 20 percent of the average retail price: $0.27 a pound in 1999/00, when retail prices averaged $1.34 a pound.

The US exported 152,000 metric tons of tomatoes in 1999, and imported 741,000 metric tons, with 91 percent US fresh tomato exports going to Canada, and 83 percent of tomato imports coming from Mexico.

The US produced 11.6 million metric tons of processing tomatoes from 350,000 acres worth $913 million in 1999; 95 percent of processing tomatoes are produced in California. Exports and imports were both about 125,000 metric tons.

In 2000, a glut of tomatoes reduced prices from $57 to $47 a ton, and some tomatoes were not harvested because the Tri Valley Growers co-op went bankrupt. Some of the affected growers argued that they suffered a "disaster" and deserved federal disaster payments; $20 million was included for Tri-Valley growers. One said: "This disaster is of similar magnitude to a hurricane, tornado or a flood… It is the will of the American public to protect the family farms."

The 500 Tri-Valley growers lost $140 million in equity. A bankruptcy judge in November 2000 approved bonuses for key Tri-Valley executives to keep them with the co-op.

Cucumbers. US demand for fresh-market cucumbers has been rising, while consumption of processed or pickled cucumbers has been falling. The US produced 2.4 billion pounds of cucumbers worth $361 million in 1999, and consumed three billion pounds of cucumbers, almost 10 pounds per person, up from 2.5 billion in 1989. The cucumber is the most frequently pickled vegetable, although beets, cabbage, and peppers are also sold in pickled form. Cucumbers are pickled using a variety of herbs, including dill.

US-produced cucumbers include field-grown slicers, greenhouse-grown slicers, and processing (pickling) cucumbers. Farmers received an average 19 cents a pound for fresh-market cucumbers and 12 cents a pound for pickling cucumbers. Florida and Michigan each produce about one-fifth of US cucumbers, although Florida specializes in fresh and Michigan in pickling cucumbers; California produces about 10 percent of US cucumbers, mostly for the fresh market.

Fresh-market cucumbers are harvested by hand; processing pickles can be harvested by machine. Pickle Packers International estimates that two-thirds of the cucumber crop in the northern U.S. (for example, Michigan), one-third of the crop in the western U.S. (for example, California), and less than 10 percent of the southern cucumber crop (North Carolina) are harvested by machine. Most pickling cucumbers are produced under contract, while most fresh-market cucumbers are sold in the open (spot) market.

Garlic. Garlic enjoyed the fastest growth in per capita consumption among vegetables in the 1990s, reaching 3.1 pounds a person in 1999. Garlic production more than doubled in the 1990s, from 16,000 acres in 1989 to 41,000 acres in 1999. The US farm value of garlic is about $200 million, but its bigger impact may be in agri-tourism--the Gilroy Garlic Festival draws about 100,000 visitors during the last weekend of July. The major garlic processors are Gilroy Foods, which bought Basic Vegetables in 2000, De Francesco & Sons in Firebaugh and Empire Foods in Nevada.

China produces about two-thirds of the world's garlic, with production concentrated in Shandong Province southeast of Beijing. It is followed by South Korea and India, which each produce five percent of the world's 13 billion pounds a year. China can sell garlic for $0.40 to $0.70 a pound, less than US production costs. The 400 million pounds of garlic produced in the US each year is about three percent of world output.

California is the second-largest producer of watermelons, producing 300,000 tons worth $83 million in 1998. Watermelons, which are 92 percent water, are a cousin to cucumbers, pumpkins, squash, zucchini and other gourds.

Dry beans, grown on 105,000 acres in 1998, were worth $68 million. Black-eyed beans are the most common among the dried beans grown in California; other varieties range from pinto to garbanzo. Black-eyed beans can be harvested for the fresh market or dried, then harvested mechanically. Fresh-market beans have green pods and are called peas. When the pod is dried, the bean becomes white with a black spot.

Mushrooms. US mushroom production was 867 million pounds in 1999/2000, including 669 million pounds for fresh consumption worth $716 million and 186 million pounds for processing; Americans consume an average 2.5 pounds of fresh mushrooms a year. The three leading mushroom-production states were Pennsylvania, 52 percent; California, 15 percent;, and Florida, five percent.

Field Crops. The most valuable field crop grown in California is cotton, with Fresno county producing $322 million worth in 1999. California is expected to harvest 765,000 acres of cotton in 2000, generating two million bales, or 1,255 pounds an acre.

Cotton was a major employer of farm workers until the 1960s, with two peak seasonal labor needs--to chop or weed and thin cotton plants in early summer, and to pick cotton in the fall after the bolls open, usually in October. In the south, one large sharecropper family typically cared for 15 to 20 acres of cotton, with the family providing the labor in exchange for a share of the crop. In California, migrant workers chopped and harvested cotton for piece-rate wages.

Prices for major field crops such as corn and wheat headed for record lows in summer 2000, as timely rains and cool weather promised bumper crops. The USDA projected that farmers would receive $1.70 a bushel for corn, the lowest price since the mid-1980s, and $4.50 a bushel for soybeans. Corn and soybeans account for half of U.S. crop production by volume: 10 billion bushels of corn from 73 million acres and three billion bushels of soybeans from 73 million acres are likely to be produced in 2000.

In 1986, similar high levels of production led to declining prices and a then-record $26 billion in government payments to farmers. A decade later, the 1996 Freedom to Farm Act anticipated wider swings in commodity prices, but not persisting low or high prices. With Congress set to provide about $32 billion in farm aid in 2000, some are saying farm policy should change again.

In most years, Congress provides disaster assistance to farmers who suffer losses due to weather or insects for which they were not insured. Congress approved a $900 million disaster aid package in 2000 that allows individual farmers to collect up to $150,000 each, double the previous $75,000 limit. The federal government provided $28 billion to assist farmers in FY00, the most ever; 4,898 California farmers and farm corporations received a total of $84 million federal payments FY00.

President Clinton in October 2000 signed into law the $80 million farm bill for FY2001, which includes $3.5 billion of emergency assistance for farmers.

Poultry. McDonald's buys two billion eggs a year. In August, it announced that producers who sold it eggs must provide 72-square inches of space for each chicken, up about 50 percent from the usual standard, and stop beak clipping and starvation-induced molting--a natural process of withholding food and water that restores a hen's ability to lay eggs. McDonald's, which already has rules for its beef and pork producers, said that by the end of 2001, it will buy eggs only from producers that "support our corporate guidelines related to animal welfare." McDonald's buys 2.5 percent of the 75 billion eggs produced in the US each year for its 13,000 restaurants. Jerry Armstrong, with one million chickens in Valley Center, north of San Diego, says that McDonald's has succumbed to pressure from the People for the Ethical Treatment of Animals (PETA).

Beginning September 20, 2000, farms can qualify for the "free-farmed" label on their livestock products. The label was developed by the American Humane Association. Few livestock products will initially qualify, since the standards will require, for example, no more cages for chickens and access to pasture for dairy cows. USDA will monitor the inspections and labels.

Dennis Pollock, "Valley raisin workers see their incomes shrivel as the deadlock in price talks hits home," Fresno Bee, December 23, 2000. Christine Souza, "Tomato giveaway illustrates dire situation for growers," Ag Alert, September 27, 2000. Melinda Fulmer, "Lemon Growers Bitter Over Sunkist Plan to Sell Imports," Los Angeles Times, August 4, 2000.