Crop values may be on the rise, but the profits aren’t always
reflected in farmers’ pockets.
Crop values may be on the rise, but the profits aren’t always reflected in farmers’ pockets.
Santa Clara County’s gross value of agricultural production rose $6 million, totaling $266.14 million, according to the 2010 Santa Clara County agricultural crop report. And, Kevin O’Day, Agricultural Commissioner, says these numbers are not too surprising.
“I’m pleased to say we are on the stable-to-up trend,” O’Day said. “But the first thing to point out is the valuations are gross returns, not net profit.”
The top three crops were once again nursery crops at $90.6 million, mushroom at $60.7 million and bell peppers at $13.4 million. Mushroom production in the county continues to be ranked second in California with 149 farming acres.
This 2 percent rise from 2009 to 2010 is smaller than the nearly 5 percent increase from the 2008 to 2009 report. Supervisor Mike Wasserman said that given the economy in recent years, profit margins are shrinking for many businesses, including farming.
“The fact that there was an increase is great,” he said. “We’ve been in a recession, so it doesn’t surprise me that things are not as good as a couple of years ago. Yet farmers need to make a profit to continue to make the products that they do.”
Pete Aiello, owner and general manager of Uesugi Farms in Gilroy, said that their profits in 2010 compared to 2009 increased.
“Bell peppers are our biggest crop, both volume wise and financially speaking,” he said. “We had probably our best year ever (in 2010) financially speaking.”
He said the biggest attribute to that growth was due to the 20 to 30 percent increase in acreage and more planting that they did.
Even with the overall higher gross value, some commodities fell short. From 2009 to 2010, the value for cut flowers fell nearly $900,000, on a downward spiral as a result of foreign competition, said O’Day. Foreign production has lower labor costs, whereas California has higher production costs to heat green houses during the winter, said O’Day.
Another significant decrease came from cherries, which suffered a 52 percent drop from 2009. Andy Mariani, owner of Andy’s Orchards on Half Road in Morgan Hill, suffered cracks in 80 percent of his crop due to heavy rains prior to the year’s harvest.
“It was the kiss of death for that crop,” he said. “On the tree and cracked, they have absolutely no value.”
Mariani said if farmers have more than 50 percent splits, they are left with the decision to pick the harvest that year or walk away. With the high cost of picking – about 30 cents per pound – Mariani still chose to pick this year, and sold only 5 percent of his cherry crop that can yield 200,000 pounds in a good year.
“I don’t know if I can survive if we have another year of rain. Cherries are my bread and butter,” Mariani said, who’s profits suffered in 2010 because of the poor cherry harvest.
A value that was not reflected in the report was an increase in the number of growers that are doing more on-farm processing to sustain farming itself. Agritourism in the county, such as wine tasting or Christmas tree picking, has economic components for local farmers and can be seen as a marketing opportunity, said O’Day.
On the rise are winemaking grapes, which rose from the number eight spot to the seventh spot on the list of one million dollar crops in the county.
“What I’m pleased to see is the wine grapes total value is about the same but its not declining,” he said. “The grapes we produce in our region are competing with Monterey County, which imports some of its grapes. Almost all of our product is staying local and being processed here. ”
Santa Clara County now boasts 32 certified farmers market; 10 are located within 20 miles of downtown Morgan Hill.
