State water bureaucrats are keeping the screws tight on urban water use while a few agro-plutocrats on the west side of the San Joaquin Valley lock in a guaranteed water supply 30-percent larger than the total requirement for Los Angeles and go on planting more almond orchards as the price for the Holy Nut falls. --blj
Valley Public Radio
The Price Of Almonds May Have Met A Slippery Slope
Edward Ezra Romero
Drive anywhere in Central California and you'll find fields of almonds. So many new trees have been planted in recent years that people have begun to wonder whether the growth of the almond industry is unsustainable. It seems like the price of the nut may have met a slippery slope.
It started out with almonds getting a lot of bad press over the last few years. The nut was called out for soaking up too much water, while at the same time farmers were making bank on the tree crop. Meanwhile, the commodity slowly lost value.
Vernon Crowder says the price of the nut per pound has dropped "about 20 percent, maybe just a little bit more, since late 2014." Crowder is part of a Food and Agribusiness Research Advisory Group with Rabobank in Fresno.
That 20 percent equals a loss of around $1.8 billion. Crowder says the problem is too much supply.
Even with the decrease in prices, almond growers are planting new fields of the nut.
Ezra David Romero/Valley Public Radio
"There have been a lot of new almonds planted over the last three years," says Crowder. "And that's probably part of the reason why the crop was a little bigger than we expected this year. And people know there will be more almonds produced this fall as well."
When the price of almonds rose from around $2.50 three years ago to over $4 per pound in 2014, farmers went crazy. Many replaced their lower-priced crops, like grapes or cotton, with fields of almonds. That flooded the market, and the price dropped to around $3 per pound.
The real kicker was the strength of the dollar in 2015. It began to cost more for places like China and India to buy almonds. In turn, Asian markets are shelling out less cash for the crop.
"We probably pushed the price up too high," says Darren Rigg. He handles over 50 million pounds of nuts with Meridian Growers in Tulare, Calif.
"It killed off demand, and people at a certain point, they just don't buy," Rigg says. "We're probably coming back into an equilibrium point, but we possibly have overcorrected as well."
He says over-reliance on markets with a lack of infrastructure and shaky finances are the root cause.
"The whole entire industry has dealt with a lot of defaults out of India and Dubai," says Rigg. "Guys going out of business, guys not picking up loads. And some of them just packing up shop and running off to the Himalayas. And so we still have cargo at foreign ports."
In 2015 more than 1.8 billion pounds of almonds were processed in California.
Ezra David Romero/Valley Public Radio
Even with the current decrease in the price per pound of almonds, growers are still earning more than they were five years ago. Almond growers like Joe Del Bosque in Firebaugh, Calif., say they haven't felt the pinch yet.
"Having a couple of good years has given us a good foundation ... to be able to weather this thing," Del Bosque says.
Del Bosque farms more than 600 acres of almonds. And he says he does worry that the high cost of water, coupled with the lower price of almonds, would decrease profits.
"We're not panicking," Del Bosque says. "If the market stays where it is right now, I think we'll still be OK — if we have water that isn't too expensive this coming year."
But this is all a balancing act, and Mother Nature has a role to play. Adequate chill hours – almond trees need to rest in winter under 45 degrees for up to 300 hours for normal growth – and ample rains brought by El Nino could mean a healthy crop. But too large of a yield could depress the price of almonds, leading to fewer dollars in farmers' pockets.
At the same time, growers are worried that strong storms in February could knock too many flowers off trees during bloom time. The loss of too many flowers could result in a smaller crop — which would make almonds too expensive for foreign bank accounts. Both scenarios could lead to an even greater price drop, but the growers I spoke with remain optimistic.
Westlands Settlement Is Poor Deal for California
The Obama administration and Westlands Water District recently came to an agreement that appears to be a wish list made reality for Westlands. But water policy analyst Tom Stokely argues that it will lead to ongoing water shortfalls for California’s communities, general economy and environment
A recent deal signed by the Westlands Water District and the Obama administration can be likened to the bank bailout of 2008: The wealthy and powerful corporate interests that caused the crisis are allowed to exit the burning aircraft with golden parachutes.
In the deal, which requires congressional approval, the administration will forgive the district’s $375 million interest-free repayment obligation to taxpayers for construction of the federal Central Valley Project, the massive apparatus that delivers water from the Sacramento/San Joaquin Delta to the corporate farms of the western San Joaquin Valley. The agreement also converts the district’s current two-year water contracts to a permanent contract for up to 890,000 acre-feet (1.1 billion cubic meters) of water annually (subject to the availability of water). For the sake of comparison, the City of Los Angeles uses only 587,000 acre-feet in a typical year.
Why is the Obama administration taking such a lopsided deal? The agreement would settle litigation over an unfulfilled federal requirement to provide drainage to the district, which farms lands laced with highly toxic selenium. When these lands are irrigated for crops and flushed with additional water to remove salt intruding into the root zone, vast quantities of selenium-contaminated water sluice into San Joaquin Valley aquifers and waterways, imperiling human health, fisheries and wildlife from Fresno to San Francisco Bay.
While the agreement brings many benefits for Westlands, it will lead to continued water deficits in California. It will provide the district with permanent deliveries of subsidized water at low prices without imposing acreage limits. It will increase the stress on our scant water resources, penalize cities and small farmers and devastate the Sacramento/San Joaquin Delta and San Francisco Bay.
There is a better, cheaper and more equitable way. A new report by EcoNorthwest, an independent economic analysis firm, confirms that 300,000 acres (120,000 hectares) of selenium-tainted land in the Westlands Water District and three adjacent water districts could be retired at a cost of $580 million to $1 billion. The U.S. Fish and Wildlife Service and the U.S. Geological Survey have reached similar conclusions. Retiring this land and curbing the water contracts associated with it would result in a savings to California of up to 455,000 acre-feet of water, or enough for 2,600,000 urban water users.
Further, land retirement is significantly less expensive than Gov. Jerry Brown’s plan to build a massive tunnel system to divert water from the Sacramento River, designed for the benefit of western San Joaquin Valley agribusiness.
Agriculture consumes 80 percent of California’s developed water while accounting for only 2 percent of the state’s economic output. Our water supplies are limited in the best of times, and drought and climate change are only exacerbating the crisis.
Subsidizing corporate agriculture on impaired and toxic lands is hardly a wise and reasonable use of our water. Congress must not approve this catastrophically flawed agreement embodied in HR 4366 (Valadao). Californians need to tell our federal legislators, particularly senators Feinstein and Boxer, that we don’t want another egregious and inequitable corporate bailout.
California Water Officials Vote To Extend Emergency Water Conservation Measures
FRESNO (AP) — State water regulators voted Tuesday to extend emergency conservation measures because of a drought, even though an increase in rain and snow this winter has improved California’s snowpack.
But with the drought still severe, conservations efforts fell off in December. Officials said residents used 18 percent less water than in December 2013, but that was the worst showing in seven months of tracking and fell well short of Gov. Jerry Brown’s goal of 25 percent.
It’s also the third straight month that the state missed its target.
California, however, will likely beat its long-term conservation goal, saving a combined 25.5 percent since Brown issued the mandate in June calling for savings from 2013 use rates, the State Water Resources Control Board reported.
State water managers are looking ahead to April 1 — when the Sierra Nevada snowpack is historically at its deepest before melting and feeding rivers and streams and replenishing depleted reservoirs.
The snowpack’s depth then will signal whether drought conditions are easing after the state’s driest four-year period on record.
“We’re at halftime,” water board chair Felicia Marcus said in an interview. “We’re not doing too badly, but we certainly haven’t won the game yet.”
The water content of the snowpack on Tuesday measured 130 percent of its historical average for this time of year.
Under a light snowfall, snowpack survey chief Frank Gehrke plunged a measuring pole into 76 inches of snow near Echo Summit in the Central Sierra region that includes Lake Tahoe.
“It’s certainly a very encouraging start to the winter,” said Gehrke, chief of the California Cooperative Snow Surveys Program for the Department of Water Resources.
Still, he said, the state needs to see storms each week to ease the drought. The snowpack provides nearly one-third of California’s water supply.
An electronic measurement collected by more than 100 sensors throughout the Sierra has shown the snowpack at 114 percent.
Officials say that despite the El Nino rain storms, California’s major reservoirs remain critically low, requiring continued conservation.
Under the extended drought regulation, cities that are especially hot, dry or crowded or that have managed to come up with new sources of water would get a slight break. The statewide conservation is expected to net a savings of at least 20 percent instead of last year’s goal of 25 percent, officials said.
But water districts say the breaks don’t go far enough and leaders lined up at a Sacramento meeting Tuesday to tell the water board that the breaks don’t go far enough.
They wanted more credit for investing millions in drought resilient projects and those built before 2013, a cutoff date set by the state for local districts to qualify for cuts up to 8 percent from their individual targets.
They urged state officials
to replace the emergency regulations with long-term water policy.
The Sacramento Suburban Water District invested $120 million in groundwater storage a decade ago, making it drought proof, said the district’s general manager Robert Roscoe. Yet, he said the district is held to high conservation standards.
“We did precisely what we were supposed to do,” Roscoe said before the water board voted. “We anticipated a drought, were proactive and we made a huge investment.”
The new regulation would extend through October. But water officials said they would review it again in the spring. By then, they say it will be clearer whether California is still in drought.