Farmers watch spending on ag products, services, suppliers say
| Friday, Jan 29 2010 06:42 PM
Last Updated Friday, Jan 29 2010 06:42 PM
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John Harmon, a partner at Bakersfield-based Harmon Systems International, stands in front of many sulphur dioxide generators they sell for farmers to treat irrigation water.
The double whammy of an economic downturn and a drought has sent its misery trickling down from growers and ranchers to the vendors who supply them with products and services.
"I keep hearing political speeches that the recession is over, but I haven't seen that yet," said Lonnie Merryman, general manager of Kisco Sales Inc., a Bakersfield company that sells pumps, tanks and other equipment for spraying and fertilizing.
"It's tough when everyone you talk to either is unemployed or having to lay people off," Merryman said.
Golden Valley Orchard Supply, a Bakersfield company that sells farm tools, is also having a hard time.
"People are really watching their spending right now," said manager Pascual Bermudez.
It's not just the economy, said Dan Sumner, director of the Agricultural Issues Center at the University of California at Davis. With the exception of the dairy industry, which is particularly soft, agriculture prices haven't been that bad over the past year, Sumner said.
What's killing Kern County agriculture is the lack of water.
The state of California is in its third year of drought, and even a series of storms over the past two weeks hasn't been enough to make up the water deficit in Kern County, according to the National Weather Service.
The Bakersfield area had 5.10 inches of rain between July 2008 and June 2009, and only 2.38 inches during the same period a year earlier.
But growers and the venders they do business with say equally or even more damaging is a water shortage that's man-made.
In 2008, a federal judge issued a ruling severely restricting pumping into agricultural canals from the Sacramento-San Joaquin Delta in order to protect an endangered fish.
Irrigation with both state and federal water supplies has been sharply reduced as a result.
The California Department of Water Resources has said it will only be able to deliver 5 percent of requested State Water Project water this year to the Bay Area, San Joaquin Valley, Central Coast and Southern California, although that figure may be updated next month.
The U.S. Bureau of Reclamation has allowed only a 10 percent allocation for agriculture south of the delta.
The combined effect of all that is some 40,000 acres of county farmland aren't being farmed right now, according to the Kern County Department of Agriculture Measurement Standards. That includes both owned land that isn't planted and farmland for rent that is no longer leased.
"There's nothing worse than somebody leaving their land idle to totally whack" suppliers, Sumner said.
Some have responded by trying to diversify. Certain farm equipment can be repurposed for other industries, for instance.
"We have salesmen trying to get more industrial and oil field work," said Kisco's Merryman.
But that hasn't prevented layoffs. The company has roughly 35 employees, compared with about 50 a year ago, Merryman said.
Kern County lost 1,400 farm jobs in December alone compared with December of the previous year, according to the state Employment Development Department.
Kelly Pipe Co., a Bakersfield company that sells pipes used in water wells, has managed to avoid staff cuts despite a slowdown since last year.
"We didn't expand during the good years, so we haven't had to downsize during the bad times, fortunately," said branch manager Jim Penney.
But Kelly Pipe Co. is adapting in other ways, reducing inventory and pressuring pipe manufacturers to reduce their prices.
A few companies say the water shortage has worked to their benefit.
McFarland-based Sterling Insectary, which sells predatory mites and other beneficial insects, says it's getting more business because in the long run, its products are cheaper than pesticides.
"People are moving in a more green direction, anyway, so our industry is growing," said general manager Kim Gallagher Horton.
Another company that has been able to capitalize on the water crisis is Bakersfield-based Harmon Systems International, which provides equipment to purify irrigation water.
Because there's so little rainwater, more growers are tapping wells, and well water is more likely to contain contaminants that over time damage soil, said managing partner Terry Gong.
If there's any silver lining in the drought, it's that it's forcing people to experiment with sustainable farming methods, Gong said.
"Sooner or later, we're going to have to figure out how to do that without damaging the economy of the Central Valley," he said.
