Drought cuts vendors’ profits at California Avenue Farmers’ Market

 

Bob Blanchard, owner and operator of the Cayucos, Calif.-based Old Creek Ranch, founded by his father in 1949, is faced with the increasingly daunting task of making ends meet during a historic three-year drought.

The ongoing drought is cutting into profits for Blanchard, along with many farmers in the Central Valley and Central Coastal Regions of the state, putting their livelihoods in jeopardy.

“The drought has been horrible on us,” Blanchard said. “Running a farm on a third of the normal rainfall hasn’t been easy.”

It’s not all bad news for these local farmers, as demand for their organically grown, farm-raised products has never been higher. As a regular at the California Avenue Farmers’ Market in Palo Alto, Blanchard has seen the market grow into one of the most lucrative and popular destinations for vendors and customers in the Bay Area.

When the market opened in 2007, there were 68 vendors. Today, there are around 98 vendors every Sunday. The increase in vendors mirrors the growth in attendance for the market, which has reached an all-time high of about 6,000 weekly visitors — doubling the attendance when the market started.

But the increases in demand aren’t enough to mitigate the effects the drought has had on Blanchard’s agricultural production.

Blanchard’s ranch is known for growing some of the best organic Valencia oranges in the Valley, as well as avocados, grass-fed beef, goat, lamb, pork and poultry products. But, his costs have tripled, and the ranch, which has a yearly cash flow of around a million dollars, will be lucky to break even, he said.

The Central Valley and Central Coastal regions of the state contain about 1 percent of the available farmland in the U.S. but are still responsible for about 10 percent of the nation’s total agricultural production. But lack of rainfall in the region has made grazing pastures nearly bare. Pastures that once provided ample food for livestock are hardly recognizable, sparsely covered in dry, golden-brown forage that cannot sustain an entire herd.

These areas are used to seeing an average rainfall of 18 to 22 inches per year, and have seen rainfall increase to anywhere from 30 to 50 inches during wet years. During the past three years, however, farmers have been forced to make do on seven to eight inches. As a result, “natural grass and shrub growth has been severely restricted,” Blanchard said.

Blanchard has been forced to reduce his herd to half of its normal size. When it comes to livestock, said Blanchard, “it simply costs too much money to feed a calf for its lifetime; the only way to get by is to have less cattle on the ranch.”

Blanchard has watched other farms in the area close for now, cutting their losses until the rainfall returns. Farmers who are lucky enough to have access to springs and wells on their land are solely relying on this resource to irrigate their trees and produce; but this is also a limited resource that cannot be replenished at the rate it is being depleted — a broader issue of its own.

The drought has also increased demand and reliance on imported hay and alfalfa feed for livestock, diminishing profits for farmers even more.

While market prices for hay feed have increased due to greater demand and reliance from farmers locally, these farmers are increasingly being priced out of the market because of demand for the product in China. Currently, China solely relies on imported hay — mostly from the Western United States — to feed its livestock herds, according to the U.S. Department of Agriculture’s foreign agricultural service.

Hay and alfalfa sales have increased almost eightfold over the past four years and prices have doubled or tripled in some regions due to increasing demand, according to USDA data. Sales of alfalfa shipped abroad amounted to $586 million last year, a record high.

Meanwhile, production of alfalfa and hay was down this past year to 6 million tons compared to 8 million tons in 2002. Prices have risen to between $300-$400 per ton. Farmers in the Central Valley and Central Coastal regions are now competing against a global market for hay to feed their herds.

Rebecca King, another local dairy farmer and Cal Ave market regular, said her costs on hay and alfalfa feed have increased from around $20,000 in 2011 to $50,000 this past year — a price markup that forced her to drop her organic certification and threatens to put her out of business.

“It will be nearly impossible for me to make a profit this year,” King said.

“Prices for meat and dairy have been affected the most at the market,” Blanchard said. A half-gallon of raw milk from the Schoch Family Farmstead stand is going for about $8, and a dozen eggs from Soquel’s Fogline Farms is going for around $10. Meanwhile, a pound of rib steak from Blanchard’s ranch is going for around $27 — prices well above normal market standards. Even with these kinds of price increases, costs to farmers aren’t being covered.

Although rainfall has been sparse, Blanchard said with every new rain, however small, he can see new growth in his fields. But Blanchard, 72, and his wife Terri, 65, were hoping to retire within the next few years and pass on the responsibilities of operating their ranch to capable hands. That goal will no longer be possible.

Blanchard said he doesn’t mind working until he can no longer handle running his farm because it is his home and his livelihood. But his dreams of retiring and walking away from the industry with a comfortable nest egg have been put on hold until the rain returns.