- (Public Value) UCANR: Promoting economic prosperity in California
UC Agricultural Issues Center has released new studies estimating the cost and returns of establishing an almond orchard and producing almonds for three growing regions of California.
“These cost studies are valuable for agricultural producers all along the continuum – growers considering entering into a new crop production business, less experienced growers, and those with decades of experience,” said Emily Symmes, UC Cooperative Extension integrated pest management advisor for the Sacramento Valley. “The information in these cost studies allows growers to evaluate their production practices and associated costs relative to an exemplary hypothetical orchard specific to their geographic region, and can help with development of business models, crop insurance and lending.”
In 2018, almonds ranked third among California commodities with almond growers receiving nearly $5.5 billion in cash receipts.
The cost analyses are based on hypothetical farming operations of well-managed almond orchards, using cultural practices common to the region. Local growers, UC Cooperative Extension farm advisors and supporting agricultural representatives provided input and reviewed the methods and findings of the studies.
“The recent almond updates for the Sacramento and San Joaquin valleys reflect costs associated with the continually evolving conditions facing agriculture,” said Symmes, who co-authored the almond cost studies. “Some of the notable updates include labor, irrigation and pest management costs – all integral to producing and delivering a high-quality crop.”
The researchers based one study in the Sacramento Valley, one in the northern San Joaquin Valley and the other in the southern San Joaquin Valley.
The southern SJV study is based on an orchard that uses double-line drip irrigation, whereas the other two locations use microsprinkler irrigation. All are multi-year studies, estimating costs from removal of the previous orchard, through almond orchard re-establishment and the production years. The economic life of the orchards used in these analyses is 23 to 25 years.
Navel orangeworm (NOW) is a major pest in almond production; Symmes and her co-authors describe in detail the pesticide applications and winter sanitation methods for each location for NOW control and include the costs.
The authors describe the assumptions used to identify current costs for orchard establishment, almond production, material inputs, cash and non-cash overhead. A ranging analysis table shows net returns over a range of prices and yields.
The new studies are titled:
- Sample Costs to Establish an Orchard and Produce Almonds in the Sacramento Valley - 2019
- Sample Costs to Establish an Orchard and Produce Almonds in the Northern San Joaquin Valley - 2019
- Sample Costs to Establish an Orchard and Produce Almonds in the Southern San Joaquin Valley - 2019
The studies are available for free download at the UC Davis Department of Agricultural and Resource Economics website at http://coststudies.ucdavis.edu. Sample cost of production studies for many other commodities are also available on the website.
For additional information or an explanation of the calculations used in the studies, contact Donald Stewart at the UC Agricultural Issues Center at (530) 752-4651 or email@example.com. To contact a local UC Cooperative Extension advisor, find the UCCE office in your county at http://ucanr.edu/County_Offices. The Agricultural Issues Center is a statewide program of UC Agriculture and Natural Resources.
California's working landscape and the industries associated with agriculture and natural resources contribute significantly to the state's economy, according to a new study by the California Community Colleges Centers of Excellence for Labor Market Research, California Economic Summit and the University of California's Division of Agriculture and Natural Resources.
“When people think of California's economy, they think of entertainment, information technology and other industries. They may not think of working landscape,” said Glenda Humiston, University of California vice president, agriculture and natural resources. “People may be surprised to learn that California's working landscape accounts for 6.4% of the state's economy, supports more than 1.5 million jobs and generates $333 billion in sales.”
To measure the economic impact of the working landscape, researchers from the Centers of Excellence, California Economic Summit and UC Agriculture and Natural Resources analyzed federal data associated with employment, earnings and sales income of the nine segments that are essential to the working landscape: agricultural distribution, agricultural production, agricultural processing, agricultural support, fishing, forestry, mining, outdoor recreation and renewable energy.
Their analysis of 2018 data from the North American Industry Classification System showed the value of the working landscape in California comes in ahead of the health care, real estate, retail and construction industries. The top five economic drivers were government (21.9%), manufacturing (10.2%), information (9.3%), professional, scientific and technical services (7.5%), and finance and insurance (6.4%).
The researchers found the nearly 70,000 businesses associated with the working landscape paid $85 billion to workers in 2018 and generated $333 billion in sales income. In terms of job numbers, earnings, sales income and number of establishments, four segments dominate: agricultural distribution, agricultural production, agricultural processing and agricultural support.
Agricultural production provides the greatest number of jobs, more than 325,000, and generates the second highest sales income, $61 billion in 2018. Although agriculture accounts for 79% of working landscape sales income, it is important to note that other working landscape segments are still sizeable when compared to the rest of the nation.
In addition to evaluating the contribution of the industries to the state's economy, the researchers measured the importance and impact of the nine working landscape segments by region. For example, some segments, although relatively small in terms of employment or sales income, are cornerstones of local economies and play a critical role in the livelihoods of communities.
The Los Angeles/Orange County region, the San Francisco Bay Area, and San Joaquin Valley have the greatest concentration of jobs for agricultural distribution, agricultural processing, agricultural support, mining and renewable energy. The San Joaquin Valley leads in agricultural production, followed by the Central Coast. Los Angeles/Orange County has the most forestry, fishing and outdoor recreation jobs.
This report does not include economic values for ecosystem services provided by California's working landscape such as clean water, nutritious food and a livable climate, or intangible goods that contribute to human well-being, such as recreation, aesthetic inspiration and cultural
To read the report “California's Working Landscape: A Key Contributor to the State's Economic Vitality,” visit http://ucanr.edu/WorkingLandscape. A one-page executive summary is available at http://bit.ly/2WTA7Vz.
Farmers who are considering growing romaine hearts or organic strawberries in California's Central Coast region can get some help determining whether the crop will pencil out for them.
UC ANR Agricultural Issues Center and UC Cooperative Extension have released sample costs to produce and harvest organic strawberries for fresh market and romaine lettuce hearts in Santa Cruz and Monterey counties.
A major difference between growing strawberries organically and the conventional practice is in weed control.
“Weed management is especially challenging for organic strawberry production because soil fumigation and most herbicides are not allowed under organic regulations,” said Mark Bolda, UC Cooperative Extension farm advisor in Santa Cruz County. “Weeds in furrows between the beds can be mechanically cultivated during the growing season, but most of the weeding will need to be done by hand from December through September.”
The cost analyses are based on hypothetical well-managed farming operations using practices common to the Central Coast region. The costs, materials and practices shown in the studies will not apply to all farms and are intended to assist growers in estimating their own costs.
The organic strawberry study assumes a farm with conventionally grown strawberry transplants planted on 27 contiguous acres of rented land. “Organic strawberry transplants are part of the picture now, but not standard by a long shot,” said Bolda, who co-authored the cost studies. The strawberry crop is harvested by hand and packed into trays containing eight 1-pound clamshells, from April through early October with peak harvest in June and July.
For romaine lettuce for the hearts market, the cost study assumes a farm of 1,500 non-contiguous acres of rented land, with romaine planted on 250 acres and rotated with other lettuce and cool season vegetable crops to assist with pest management and soil fertility. Lettuce is planted continuously from late December to mid-August along the Central Coast. To manage lettuce mosaic virus, Monterey County has a host-free period (December 7 – 21), during which time lettuce may not be planted. In this study, lettuce is planted in January.
For both the organic strawberries and romaine, ranging analysis tables show net profits over a range of prices and yields. Other tables show the monthly cash costs, the costs and returns per acre, hourly equipment costs, and the whole farm annual equipment, investment and business overhead costs. The authors describe the assumptions they used to identify current costs for production material inputs and overhead.
The authors have also expanded the section on labor, which includes information on California's minimum wage and overtime laws.
Growers, UC ANR Cooperative Extension farm advisors and other agricultural associates provided input and reviewed the methods and findings of both studies.
Free copies of these and other sample cost of production studies for many commodities are available. To download the cost studies, visit the UC Davis Department of Agricultural and Resource Economics website at https://coststudies.ucdavis.edu.
For more information about calculations used in the romaine hearts and organic strawberriesstudies, contact the Agricultural Issues Center at (530) 752-4651 or Mark Bolda at UC Cooperative Extension in Santa Cruz County at (831) 763-8025.
The cost and returns studies program is funded by the UC Agricultural Issues Center and UC Cooperative Extension, which are part of the UC Division of Agriculture and Natural Resources, and the UC Davis Department of Agricultural and Resource Economics.