Sharing the 2014 Ventura County Crop Report. #VCCropReport

crop report

This week saw the release of the 2014 Ventura County Crop Report. As always, it sheds some light on a part of our economy that many residents are not that familiar with. I hope people will grab their own PDF copy ( 2014 Ventura County Crop Report) , spend a little time with it, and even share the report and impressions with their friends and neighbors on Social Media.

Here are a few of my observations that I hope will put Ventura County agriculture in perspective for people. I’ve included some tweetable tags for those who would like to share… Acknowledgment appreciated, but not required if shared.

Ventura County is more productive than many states. 2014’s record of $2.14 Billion in crop sales would place our county ahead of nearly half the states in the US.

#VCCropReport : $2.14 Billion in Ventura County crop sales supports local economy

Strawberry dominance diminishing? While still the county’s #1 crop, strawberries saw a drop in acreage from 2013 to 2014…a trend that is continuing in 2015.

#VCCropReport : 2014 Strawberry acreage to 11630 from 13555

The #2 Spot highlights our crop diversity: In 2014, Lemons were the second highest value crop. For the preceding 5 years? Avocados, Lemons, Raspberries, Celery, and Nursery Stock.

#VCCropReport : #2 crop for last 6 yrs: Lemons, Avocados, Lemons, Raspberries, Celery, Nursery

#VCCropReport : More than 50 crops break the $1M barrier #CropMix

Highly productive farms: Take a few minutes to think about some of the per acre production figures in the charts. 18.7 tons of lemons. 26.2 tons of strawberries. 63.5 tons of cucumbers. 89.7 tons of tomatoes. Ventura County farmland is insanely productive.

#VCCropReport : Why we grow lemons here: 18.7 tons per acre not even a record. Life doesn’t give Lemons. We do.

Different crops: Ventura County grows a lot of different crops, but few of the ones that people most often think of. Only 444 acres of corn in the county, out of 90,000+ irrigated acres.

#VCCropReport : Only 1/2% of our farmland is growing corn. #NotInKansasAnymore

A lot of rangeland, not a lot of cows. Ventura County has more rangeland than irrigated farmland, but we don’t raise a lot of livestock. Our ranchers provide great stewardship for this land, and that is important to all of us. But they don’t get paid a lot for the service.

#VCCropReport : Total 2014 Livestock sales $7.9M. Cilantro $23.3M #NuffSaid

Anyone taking the time to dig will certainly find other facts of interest. Please share them! But a  final note: Every year when the Crop report comes out, I run across someone grumbling about how much money farmers are making. If this might be you, please remember that the report only shows the sales… it doesn’t show expenses. Nearly every one of these dollars was spent, much of it locally…labor, supplies, water, utilities, professional services and property taxes. A farmer’s profit margins are lower than nearly every other business. Thanks for understanding.

“When life gives you lemons…

make lemonade.”

We all know this tired old aphorism. I don’t know who came up with it, but it sure wasn’t a lemon grower. Since I can’t have the expression banned from the English language, I suggest we take a look at it instead.

I understand that it is meant to inspire us to make the best of a bad situation, but frankly, if free lemons are your biggest problem, you’ve got it pretty good. I have to work for mine.
Yes, lemons take work. A lot of it. As well as risk, patience, and sometimes a little luck. A surplus of lemons doesn’t sound like hardship to me. It sounds like Christmas.

The same can be said for avocados, figs, oranges and any other crop I’ve ever been associated with. A chicken farmer, almond grower, or cattleman will tell you the same thing. I don’t mean to sound as if I’m taking it too seriously, but I think this expression is emblematic of our society’s disconnection from our food. Do we really think so little of our food that we consider a surplus of it a hardship?

Reading the Crop Report

The 2011 Crop Report from the Ventura County Agricultural Commissioner was released on Tuesday. This report always generates a lot of interest, and can be a very useful source of information. Here are 6 tips for a reader looking for a better understanding of Ventura County Agriculture.

It reports sales, not profits. The crop report only reports the value of the crop sold, not the amount the farmer had left in profits at the end of the year. In 2011, avocado growers “made” just under $92 million dollars. But that is without considering the costs of water, labor, interest, fertilizer, equipment, property taxes and more. Those costs averaged approximately $6,000 per acre, or just over $100 million for the 16,777 acres of avocados in Ventura County. Overall, Ventura County avocado growers probably lost somewhere around $9 million last year.

Rankings are relative. Most attention paid to the report is directed at the changes on the Top Ten list. After all, everybody loves a contest. But the movement of one commodity past another on the list really says very little by itself. Lemons “moved up” to the number three spot. Does that mean that lemons are doing better? Actually, the value of Ventura County’s lemon crop barely changed… up just one tenth of a percent. Prices were down and acreage was down. But, largely due to favorable weather, production per acre was up. Overall, the report is decidedly a mixed bag for Ventura’s favorite citrus.

Trends are the real story. The crop report reflects the changing dynamics of Ventura County agriculture. It is the history of our local farms as it is being written. $185 million in raspberry sales is an impressive accomplishment for the growers who made that happen. This milestone is worth attention because raspberries were not grown here in any commercially significant way until the late ‘90’s. When many parts of our country have barely seen their crops change in a century, raspberries have made a big impact on Ventura County in just a touch more than a decade.

Acreage points the way. The value of Mandarin oranges dropped this year due to a combination of lower prices and lower production (primarily because of weather). But don’t count the tiny oranges out yet. Acreage increased nearly 50% in one year, from 722 acres to 1080. This is a huge expansion, and indicates many very young trees that will be getting larger and more productive every year. The future will be small and orange.

When land is expensive, per acre production counts. How do you sell $10 million worth of cucumbers from 147 acres? By producing 61 tons on every acre. Highly intensive agricultural practices are expensive, but they can deliver staggering results. Cucumber sales nearly doubled from 2010, primarily due to incredible yields in greenhouse operations. Tomatoes also averaged more than 50 tons per acre in 2011. Take the time to look at per acre production in the charts.

Eat more kale. Ventura County now produces more kale (in dollar value) than livestock. The rise of this formerly obscure green into the $10 million club says something about the way American dietary habits are changing. Ventura County is one of the top nations in the nation for fruit and vegetable production. When Americans eat more salads, the money comes here.

California Bountiful on Ventura Limoncello

My central strategy for marketing specialty fruit is a simple one: Work with people who make you look good. Anybody who has tasted Ventura Limoncello knows that they make us look Very Good Indeed. Press coverage, awards, promotional dinners… the Ventura Limoncello story is everywhere, and I’m proud to be a part of it. Today’s chapter comes from California Bountiful.

Lemonomics

So why is it OK for 25 to 45% of Ventura County lemons not to be sold as fresh fruit? The first thing to know is that demand for lemons is pretty inelastic. Simply put, consumers know how many lemons they are going to buy, and changes in price don’t tend to influence buyer behavior very significantly.

On the one hand, this is great. Even a relatively small shortfall in lemon supply tends to make for very good prices. Unfortunately the reverse is also true: small surpluses drive prices into the toilet.

 The industry’s safety valve is the market for processed lemon products: Lemon juice, lemon oil and citric acid. These lemon products have a great range of uses, but it would never make sense to grow lemons just for this market. The prices are horrible. But for fruit that would otherwise be culled, it makes perfect sense. Fruit that is damaged, scarred, deformed or off size can be sold and utilized, recapturing a few pennies for the grower from what otherwise would be waste. Processors very readily will absorb more fruit with even slight pricing adjustments.

At a certain point is became clear that surpluses of better quality fruit could be diverted to these markets as well, helping to manage inventory levels of fresh fruit.  A quick (and very simple) example:

Let’s say you have two tons of lemons: You can sell one fresh for $500/ton, and one for products at $10/ton. Obviously, it is vastly preferable to sell it all fresh. But let’s suppose that this isn’t one grower’s harvest of lemons but the whole industry. If you sell one ton each for fresh and products, you get $510. But what if you try to sell it all fresh? The price is forced down. In the exampe, lets assume that it hits $250/ton. Selling both tons fresh yields $500, not $510. But if you withold a quarter ton from the  fresh market, and sell .75 tons fresh, and 1.25 tons for product, price rises of $800 a ton. You would gross $606.25, even if the product fruit dropped by 50%.

The numbers above are approximate, and this is a market that fluctuates constantly based on weather and several points in the globe, exhange rates, energy prices, consumer confidence and many other factors. But the bottom line is this: in lemons it pays to overproduce and use the product market to modulate inventories of fresh fruit. At the February 2009 AFA discussion of economics the number was thrown out of 55% fresh. My experience is that the fresh percentage is typically closer to 70%, even though I used 50% in my example above.

A final note on the topic. Overproduction of lemons is not subsidized by the taxpayers in any way. It is simply a market based solution to meeting the demands of two very different customer bases: the consumer who wants consistently beautiful yellow fruit year round (which Ventura County is able to provide), and the processor who needs a cheap source of raw materials. The grower, while always grumbling about the crappy product prices, enjoys a relatively stable market and pricing structure for the fresh fruit that is their bread and butter. Were inventories allowed to flucuate as much as they would without the outlet for surplus fruit, a single bumper crop could drive a lemon grower to insolvency.