A Golden Harvest for State’s Farmers

In recent years, as the California farm economy struggled through drought, foreign competition and low commodity prices, the name of Prosperity Avenue in this San Joaquin Valley farm town has seemed like wishful thinking.

Not now.

The town’s roughly mile-long main drag, which continues east into cotton fields, dairies and vineyards, is a model of, well, prosperity. New stores, new homes and new office buildings, not to mention Tulare’s first multiplex movie theater, are sprouting along not only the avenue but also its side streets.

The reason is simple: Farmers are making money again.

Products as varied as almonds, beef, milk, oranges and wine grapes are all bringing higher prices than just a year ago. Suddenly flush farmers are paying down debt, investing in new equipment and even keeping some money in their pockets.

Asked to explain such bounty, they point skyward, thankful for near-perfect weather.

“Here in the Central Valley it was one of the best weather years ever for nearly every crop,” said Mark Watte, whose family owns a dairy and grows cotton, wheat, alfalfa and pistachios just west of Tulare. “Even the bugs were less than normal; we didn’t have to spray as much.”

Other factors boosting the state’s $28-billion farm economy include a weak dollar, which makes California commodities more competitive overseas, hurricanes that damaged rivals’ produce and cotton crops in the Southeast -- and even the high-protein diet fad, which has fattened demand for beef and cheese.

The outcome of the election last week was generally good news too.

Some people in Tulare County were disappointed by the defeats of Sen. Tom Daschle of South Dakota and Rep. Charles W. Stenholm of Texas, both farm-friendly Democrats. But President Bush has solid support here, in part because he has been a supporter of farm price supports; he was endorsed by the California Farm Bureau Federation.

“We are a conservative bunch, so Tuesday was a very good day,” Watte said.

To be sure, worries persist -- about labor costs, the price of fuel for tractors and trucks and, for many, the growing gap between what they are paid for their crops and retail food prices.

And despite this year’s favorable weather, including some early, heavy precipitation, farmers are anxious to see significant snowfall in the Sierra this winter. The state’s stubborn drought is the biggest fear of grape grower Charlie Pitigliano; he has seen the water table on his 150-acre vineyard in Tipton, south of Tulare, drop 100 feet in the last eight years and dreads the cost of having to drill deeper.

What’s more, not all California growers are sharing in the good times. North of Tulare in Cutler, where Alan Borba farms peaches, plums and nectarines, “there wasn’t a lot of fruit this year and we didn’t get the prices we need,” he said. High labor costs and competition from cheaper, imported fruit have hurt his business, and he doesn’t see a turnaround coming anytime soon.

But by contrast, it has been such a good year for Tulare dairy farmer Rob Fletcher that he forked over $45,000 in May for a new feed wagon, a purchase he had put off for three years.

“Usually milk prices spike up and down every month or so, but this year they have really held up,” he said.

Dairy operators will collect an average $16.73 for every 100 pounds of milk through the first 11 months of this year, according to one California Department of Food and Agriculture measure. That’s up 23% from the same period last year, mostly because people are eating more cheese and food processors are using more butterfat.

Beef prices are up too, providing a boon for the state’s approximately 10,000 cattle ranchers. Strong consumer demand for beef and a shrinking U.S. cattle herd have kept prices up for nearly two years.

That also helps dairy farmers such as Fletcher. He’s getting more for older cows destined for the slaughterhouse -- 60 cents to 70 cents a pound this year, about double what he was paid several years ago.

There’s also a good market for the bull calves born to Fletcher’s breeding dairy heifers. These calves get sold to feedlots including the Harris Ranch Co. facility 65 miles to the east, where 100,000 head of cattle are getting fat for slaughter.

Most analysts expect beef prices to hold up well into next year, thanks partly to an improved outlook for exports.

Last month, trade negotiators announced an agreement to reopen the Japanese market to U.S. beef. Japan and other countries had blocked shipments in December after the U.S. Department of Agriculture discovered mad cow disease in a Washington state dairy heifer. In the next few months, Japan will start to accept beef from cattle younger than 21 months.

Other export markets are expected to reopen under similar agreements, a move that probably will push prices even higher, said David Weaber, director of Cattle-Fax, a market information company in Denver.

Said Ben Higgins, spokesman for the California Cattlemen’s Assn.: “Demand is up and supply is down. You couldn’t ask for a better scenario for ranchers here.”

The supply-and-demand equation has turned around nicely for grape growers too.

A planting binge in the 1990s led to a large surplus, especially of wine grapes, but that is now starting to ease. Smaller crops in each of the last two years have helped. And growers in the San Joaquin Valley have ripped out as much as 100,000 acres of vines in the last several years, said Nat DiBuduo, chief executive of the giant Allied Grape Growers cooperative in Fresno. He believes that has removed as much as 800,000 tons of grapes from production.

As a result, the Muscat grapes in grower Pitigliano’s 150-acre vineyard in Tipton sold for $400 a ton this harvest, up from $150 last year.

“I am now talking to some wineries about getting contracts and planting more vineyard,” Pitigliano said. “Two years ago, they wouldn’t even talk to us.”

Elsewhere in the valley, the price of the versatile Thompson seedless grape -- which can be used for wine, table grapes and raisins -- more than doubled to $200 a ton this fall.

Like grape growers, citrus farmers are seeing higher prices partly because of a smaller harvest. The 6,500 members of the Sunkist Growers Inc. cooperative are collecting about $9.50 for each 40-pound carton of navel oranges, $1 or so more than last year. Favorable growing conditions produced good-tasting and, almost as important, good-looking fruit.

The crop was smaller in part because farmers who were losing money have torn up their orchards. The land area covered by orange groves declined by more than 12,000 acres to 189,500 acres from 1999 to 2003, according to state data. Lemon production also is declining, according to growers.

“In recent years, prices have not even covered the growing costs,” said John Borchard, a citrus farmer in Ventura County. “That drove a lot of people out of the business, which is helping the others who remain to survive.”

Decreased supply has helped the citrus industry, but the almond business is defying the farm-belt assumption that a bigger crop typically results in lower prices.

California’s almond farmers gathered more than 1 billion pounds of the nut this summer, the biggest harvest ever. But it still wasn’t enough to satisfy soaring global demand, said Richard Waycott, chief executive of the Almond Board of California. The growers have succeeded in opening up new markets, such as India and Eastern Europe, and have helped boost U.S. consumption by promoting the almond as a healthy snack.

Prices began to rise three years ago and are headed for record levels. Revenue per acre of almond grove -- a standard measure of the industry’s health -- is expected to be well above $3,000 this year, shattering the $2,900 record set with the previous harvest, said Doug Youngdahl, chief executive of the Blue Diamond Growers cooperative. The value of California’s almond crop is expected to top $2 billion and rival nursery plants and grapes as one of the state’s top cash commodities.

Cotton is another big California product on the upswing.

Calcot Ltd., a giant marketing cooperative based in Bakersfield, paid 81.52 cents a pound for benchmark cotton in 2003-04. That was the third-highest price in the 77-year history of the group.

Prices will be lower this season, but farmers such as the Watte family, who are harvesting 2,300 acres of cotton on the outskirts of Tulare, are pulling in huge crops and will make up much of the difference on higher volumes.

In many of the rural towns that dot the Central Valley’s main arteries, Interstate 5 and Highway 99, rising farm incomes are having measurable effects.

Tractor salesman Michael Benson of Quality Machinery Center in Tulare says his sales growth from last year is in the double digits. Ruiz Foods, which makes frozen Mexican food, has opened a new plant, bringing 150 jobs to Tulare, said Jennifer McCoun of the city’s Chamber of Commerce. Trucking outfit Knight Transportation plans to open a new branch in Tulare next year, adding 100 jobs.

Home building has taken off too, in part because Tulare is one of the state’s most affordable places to buy a new home, McCoun said. But without job growth and an improving economy, she noted, there would be few new buyers.

Tulare’s turnaround has worked out well for Fred Lagomarsino. His family has farmed the area for 100 years and still grows nuts and fruit there. The family is one of the town’s largest landowners, and its stamp is all over Tulare’s new urban look.

Driving east on Prosperity, a visitor passes the Plaza Del Lago shopping center, which has added nearly 80,000 square feet of retail space. New-home developments, all part of the Del Lago master-planned community, pop up on the north side of the street alongside farmland.

Still, Lagomarsino remains a farmer at heart. This year he has lost money on peaches and plums but has made enough on nuts, cherries, blueberries and late-season table grapes to squeeze a profit out of his farming operations.

“Our family has been here a long time growing all sorts of different crops,” Lagomarsino said, “and we are still trying to find ways to make it all work.”