The Santa Barbara County agricultural commissioner recently issued the Agriculture Production Report for 2021, which summarizes the acreage, production and gross value of the county’s agriculture.
The report indicates the 2021 crop year was one to be “celebrated by our farmers and ranchers,” with a total gross production value of $1,918,186,000, surpassing the gross production value for the prior year by an increase of $98,988,000 — a 5.1% increase.
Unfortunately, this past year was nothing to celebrate because too many farmers and ranchers lost money. The crop report later mentions in fine print, “In general, U.S. food prices have risen since January (2021) while prices received by U.S. producers have fallen.” How so? It is the difference between gross production value (which includes costs!) and profit.
The values and costs were up, but the profit was down.
Look no further than the effects of COVID-19 along with the inflationary price of labor, fuel, fertilizer, electricity, equipment, drought conditions and the like — not to mention the enormous cost of regulations! Most of these costs have risen even more in 2022. After all, farmers are consumers too, just like you!
Meanwhile, the prices farmers receive has mostly remained flat. Uniquely, farmers can’t unilaterally raise prices based upon rising costs, as market conditions dictate the prices received for farm products.
Here is an example from the strawberry patch, the leading ag crop, by orders of magnitude, in our county.
Vons is advertising a single 1-pound strawberry clamshell for $3.50 on sale. The average price a farmer gets is $1.88 per clamshell. But it costs the farmer $1.85 to grow, harvest and transport that clamshell to a cooler and then sell it after paying a commission.
Thereby, on average, the farmer makes a $0.03 profit per clamshell.
Once the product is delivered to the cooler, the sales company takes over shipping logistics. The farmer no longer owns the product. Currently, shipping costs $12,000 to deliver a truck load of strawberries to the East Coast, costing $0.50 per clamshell. At this point, there are $2.35 in expenses to get the strawberries from the field to a retail distribution center. That is, don’t believe that grocers are making $1.15 per clamshell!
That long haul truck will drop the berries at a distribution center, and from there the berries will be delivered to your local grocer or restaurant, adding more costs every step of the way. The grocer or restaurant will make a 3-5% profit on the sale. In other words, they too will make pennies on the dollar unless the berries happen to be the loss leader of the week!
Unfortunately, some local activist groups, including CAUSE and MICOP, have been claiming that farmers are not “sharing the wealth,” and, as such, the groups have been promoting wildcat strikes against growers in the region. Some members of the press have fallen for their rhetoric, not realizing the vast, vast difference between gross revenues and profits.
Nearly all local produce growers are family-owned corporations. There are no stockholders to withstand the losses that are piling up. There is only so much these families can take.
Years ago, a piece by J. Zane Walley was published in Range Magazine. The title was “There is a Sorrow Here That Weeping Cannot Symbolize,” a line from John Steinbeck’s “The Grapes of Wrath.”
The article spoke of “a rural cleansing” whereby farmers are driven off their land, something that has been happening across the country for the past four decades, eclipsing even that which Mr. Steinbeck wrote about while memorializing the traumatic era of the Great Depression and the Dust Bowl.
This crisis is hitting too close to home. That is, the pain you feel at the grocery store was first felt by farmers.
Andy Caldwell is the COLAB executive director and host of “The Andy Caldwell Show,” airing 3 to 5 p.m. weekdays on KZSB AM 1290, the News-Press radio station.