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Prices of several commodities could rise sharply due to severe water cuts

by Rand Green | February 18, 2009
FRESNO, CA -- Growers in western Fresno and Kings counties in California's San Joaquin Valley who have been relying on water from the federal Central Valley Project have been warned to expect a zero water allocation this year. As a result, more than 330,000 acres of land that would normally be in production will not be planted this year.

While a few growers on the famous and fertile West Side of the valley have access to well water, the Westlands Water District, which gets all of its water from the Central Valley Project and which has historically provided water for some 660,000 acres of West Side farmland, expects at least half of that land to lie fallow this year for lack of water.

What well water is available will almost certainly be used for permanent crops, such as almonds, pistachios and stone fruit. But tens of thousands of acres that would normally have been devoted to crops such as cantaloupe, head lettuce, broccoli, carrots, onions, bell peppers and sweet corn will not be planted for the 2009 season.

While growers will try to make up for the shortages as much as possible with production from other areas, prices on several commodities are likely to rise sharply.

Water for Westlands comes mainly from snow melt in the northern Sierras, which is stored in reservoirs in Northern California, released into the Sacramento Delta irrigation system and then pumped out of the delta into the CVP canal system.

This year's water restrictions are partly due to an ongoing drought but largely due to environmental issues, the most significant being court-ordered restrictions on pumping water from the delta, which was deemed to be endangering the Delta Smelt population.

"I just think we are getting ourselves set up for a very serious situation this year," said Dave Kranz, manager of media services for the California Farm Bureau. "It is hard to know where the impact is going to be and how severe it is going to be. We know the western San Joaquin Valley is the epicenter of the problem, but there are other regions throughout California. Even if we get a lot of rain [in February and March], it is going to be a tough year for a lot of people."

Sarah Woolf, a spokesman for the Westlands Water District, told The Produce News Feb. 3 that "the Bureau of Reclamation has not made a formal announcement" regarding allocations for the Central Valley Project. "However, Westlands on its own has gone out and told growers that we expect it will be a zero allocation and that there is almost no likelihood of it increasing regardless of rainfall."

The few wells on the West Side are "the only alternative the growers have," she said, adding that the water table is dropping. "We have been overdrawing the aquifer for over three years, and the water quality is inadequate to begin with" due to high levels of certain salts that are damaging to some crops. "Every grower makes their own decisions on what they can and can't grow," Ms. Woolf said. But she expects that whatever well water is available will be used for permanent crops that "need to get water to survive into the next year."

John Savage, production supervisor for Pacific International Marketing in Salinas, CA, does not expect to see significant shortages in lettuce supplies this year even if no spring or fall lettuce is planted in the San Joaquin Valley. "Growers will simply extend their Salinas and desert seasons a little longer to fill the gap," he said.

Mr. Savage expects some crops other than lettuce normally planted in the Huron area to be moved to the Salinas Valley this year, which may reduce acreage in Salinas for other crops. He hoped that would mean "less acres of lettuce and broccoli and, therefore, better prices for us."

The West Side melon deal is expected to see a significant decline in volume this year, particularly on the front end.

Couture Farms in Huron, CA, which has already reduced its cantaloupe and mixed melon acreage significantly, will be cutting back even further this year, according to Steve Couture, a partner in the company.

"We are down to three fields," he said.

The company does have two wells, but it also has almonds and other permanent crops to consider. Moreover, the cost of pumping water from deep wells is expected to add $1 to $2 to the cost of each box of melons grown.

The early melon deal "will be severely short," he said. As the deal moves north into the Los Banos area, which gets water from other sources, there should be "plenty of water for mid-July, August and September melons," he said.

Asparagus is another West Side crop that will suffer from the water cuts, according to Mr. Couture. Couture Farms will keep water on its asparagus until it is ready for harvest this spring, but "there are several hundred acres of West Side asparagus in the Firebaugh area that will probably be abandoned and allowed to die," he said. Many growers have no wells and "no access to other water."

Baloian Farms in Fresno typically grows red and green bell peppers on the West Side, but it does not expect to do so this year. Baloian also has production of various crops on the eastern side of the valley, where other water sources are available.

Baloian's sales manager, Jeremy Lane, said in late January that he had "just come out of a meeting" where he heard, among other things, that "a lot of processing tomatoes [and] a lot of melons won't get planted" on the West Side. Even some growers of permanent crops "may just try to blow the bloom off" and just try to keep their trees alive until next season, rather than try to get production this year.

Family Tree Farms in Reedley, CA, which also farms on both sides of the valley, has about 1,500 acres of stone fruit on the West Side.

"It doesn't look like there is going to be any allocation" from the CVP, and whatever water is available to purchase from other sources will be very expensive, said Dave Jackson, president of Family Tree Farms.

He expects that it may cost $2,000 an acre just for enough water "to keep your trees alive." As for vegetables, farmers "just can't afford to grow those" on the West Side anymore, he said.