YOU ARE HERE: IVPress HomeCollectionsFarm

Agriculture and the economy: The ripple effect

June 25, 2001|By Keith S. Mayberry

Crop adviser

UC-Imperial County

Cooperative Extension

Times have been tough for farmers in Imperial County. When the Agricultural Commissioner's Office released the 2000 Agricultural Commissioner's Report a short time ago, it showed the overall farm economy had fallen more than $100,000 from the previous year.

If we take inflation into account, the economic damage is even more serious than numbers would indicate.

UC Imperial County Cooperative Extension (known locally as the "farm advisers' office) published in August 2000 Guidelines to Production Costs and Practices (cost-of-production data). This data provides an estimate of the cost to produce an acre of an agricultural commodity in this area.

While there are many farming enterprises that can grow crops for less money, there are some companies that spend even more money than is shown in the data. Although the report contains ballpark data, it provides the best publicly accessible information to make estimates on production costs.


If we take the total acres grown of a commodity and divide that number into the total gross value returned (as listed in the Ag Commissioner's Report) we can estimate the gross returns per acre by commodity. If we subtract the estimated growing cost per acre from the estimated gross value per acre, we get an estimate of profit or loss for the year by commodity.

Only cauliflower and sugar beets returned a profit (on paper) in 2000. It was a millennium disaster for local farmers and one of the worst agricultural years on record for the area. Alfalfa, Sudan grass, wheat, iceberg lettuce, carrots, cotton, market onions, broccoli, melons, etc. lost money overall.

This year the results are not finalized as there are still six months to go, but it appears the mid-winter to early spring season was a little better than last.

When the agricultural engine that drives the local economy sputters, so do local businesses. There is a ripple effect created by lack of farming money that cuts deep into local businesses. After bad years, farmers fix old equipment rather than buy new. They cut back on services. Some employees may have been laid off. Payment rates on bills for seed, fertilizer, fuel, land rent, harvesting services, bank loans, field labor, etc. are slow.

Those businesses in turn have less fluid cash to pay their suppliers and help.

A few farms closed down.

And so it goes with the ripple getting ever larger and encompassing more and more people and businesses.

Is the trend toward lower prices just an anomaly or is it the trend of the future? While no one can say for sure, our best guess is it is an anomaly. We think prices for most commodities will return to normal in time. Of course, there are some commodities that may continue to decline in value and acreage until they are no longer economical to grow.

In the past, Imperial County farmers grew flax, lots of barley, soybeans, guar, sesame, many acres of processing tomatoes, turkeys, chickens, hogs, etc. Changes in cropping patterns are a normal part of the agricultural scene.

Vegetable farmers are more and more becoming contract growers for the larger shippers headquartered in other regions. It is becoming increasingly difficult to compete for a market share when generic bar code branding is preferred by mega chain stores over a colorful local label.

Local promotion of agricultural products seems to be at an all-time low. It would be nice if we would promote Imperial County agriculture more aggressively. A strong local agricultural base benefits the entire community.

Imperial Valley Press Online Articles