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Community Corner - What’s Growin’ On …

POSTED September 5, 2012 2:52 p.m.

For many people, Labor Day was the last chance to head to the lake for a little water-skiing and boating – a last blast of summer. In the old days, it used to mean the start of the school year.

In agriculture, Labor Day is a holiday that many famers observe by working harder! Why, you ask? It’s the harvest season – a culmination of all of the hard work and care that we have given our crops throughout the spring and summer.

Almond and corn silage harvest are in full swing and walnuts will soon follow. As you drive around the back roads in the Oakdale/Riverbank area and see tractors, trucks, shakers, sweepers, harvesters and slow-moving equipment driving down the road, please give them plenty of room and respect.

The Stanislaus County Agricultural Commissioner recently presented the 2011 Crop Report to the Board of Supervisors. In 2011, Stanislaus County farmers and ranchers set another record for gross farmgate revenue - $3.069 billion – another record year! WOW! I stress the words gross revenue for a reason. Milk and almonds lead the way again.

The first thing that crosses someone’s mind when they read this is, “those farmers sure are getting rich!” Think again – let’s put it in terms that everyone can identify with. Take your gross paycheck, subtract all of the deductions that your employer takes off. Now subtract your house or rent payment; water, sewer and garbage; electricity and gas; fuel; food and the extras such as clothes or entertainment. Farmers have the same costs – rent or debt service; irrigation water and regulatory fees; electricity for the wells or processing plant; fuel for the tractors and equipment; food for their families; paychecks and benefits for their employees and parts for their equipment. Does that sound familiar? And many only get paid once a year instead of 26 times per year. This is where the term “land rich and cash poor” comes from when people talk about many agricultural operations.

With some crops, such as dairy, the farmers get paid every two weeks like many of you do. Dairies need to be paid every two weeks – the costs most dairies incur in that two-week period rival many of the other crops’ entire annual budgets! Many other crops have months of incurring expenses, challenging weather, fighting pests and getting the day-to-day work done just for a shot at one payday – harvest! Harvest can be the point where sometimes a farmer either makes it or they don’t. Agriculture is funny that way. There are good years and there are bad years – we just hope they all balance out.

Almonds and walnuts are flourishing. The world markets seem to take all the nuts that the California farmers can produce. The US dollar is very weak right now which makes export of our crops very affordable in other countries. In 2011, Stanislaus County exported 94 different agricultural commodities to nearly 100 different countries around the world.

But our largest industry – dairy – is seriously hurting. Throughout the state there are a large number of dairies going out of business. One day they are feeding and milking cows and the next day the cows are all gone and the facilities are a ghost town. The price for the product – milk – is outweighed by the cost of production and regulation this year. The drought in the Midwest affects the farmers in California because the price of corn affects the prices of other commodities such as alfalfa, soybean and cottonseed – commodities dairymen use to feed cows and make milk. Feed costs are currently in excess of 80 percent of the cost of production in some places – they used to be 50 percent. In 2009, dairymen were faced with a similar situation. At that time, many of them had equity in their farms to borrow against to get them by. In 2012, that equity is gone.

This has an effect on all of their communities and suppliers – from the bank to the feed company to the gas company to the tire store to the dairy employees and their families now out of work. Just like closing a candy factory – many people rely on the farms for their livelihoods.

Enough depressing comments from Ag Econ 101 – the Ag Commissioner estimates that for the $3.069 billion, a factor of 3.5 is applied to achieve an economic value of nearly $11 billion in Stanislaus County. This is the estimated economic multiplier described above – the effect of businesses on their communities. Many others estimate this multiplier to be closer to 5 or 6 for the effect on the entire state.

So, when you buy your food – check the label. Be a Californian and buy California! It may be your neighbor or friend that is feeding you. And it really does affect you as well.

Tom Orvis is the Governmental Affairs Director for the Stanislaus County Farm Bureau. He contributes occasional columns as part of the Community Corner series.

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