CALIFORNIA:

As record drought intensifies, organic dairy farmers are the first to face financial crisis

As California's record-breaking drought continues, organic farmers are facing shortages that could jeopardize their production of beef, milk and cheese.

The Golden State's third straight year of dry weather is forcing farmers to make tough choices. Dairy and cattle farmers are the first to feel the squeeze of water shortages, as their cows need to eat year-round, while plant growers typically have until mid-March to make planting decisions.

"Everyone knows it's going to be bad," said Dave Kranz, spokesman for the California Farm Bureau Federation, which has 78,000 members. "The question is, how bad is it going to end up being?"

The state's second snow survey of the year, taken near Lake Tahoe last week, turned up even less snow than the first survey. Levels of snowpack are 12 percent of average for this time of year, down from 20 percent on Jan. 3 (E&ENews PM, Jan. 3).

Federal drought experts found that parts of California descended into "exceptional" drought last week for the first time in 15 years of drought mapmaking by the federal government. Almost 9 percent of the state -- a swath stretching from Monterey on the central coast to Bakersfield in the Central Valley -- is in the most-arid category, as defined by the National Drought Mitigation Center, a project of the University of Nebraska, Lincoln, that works with federal agencies.

"Climatologically speaking, 15 years is a very short span of time, but it is safe to say that the current California drought rivals any in recent memory," said Mark Svoboda, a climatologist at the National Drought Mitigation Center. "You've got to go back to the 1970s to find anything comparable."

Marin County, in the San Francisco Bay Area, is particularly concerned about its organic farms, which make up nearly 75 percent of its dairy farms. The county has requested a waiver from the U.S. Agriculture Department's standards for organic dairy and beef cows, which require them to graze cows on pastures for at least 30 percent of their food intake for at least 120 days.

'Zero' pasture and high-priced hay

"Right now, there's zero pasture," said Albert Straus, founder and CEO of Straus Family Creamery and Dairy in Marin, which buys organic milk from eight dairies that own about 2,500 cows total.

"It's a very, very tough situation," he said. "We're all hoping for rain, but at six-hundredths of an inch yesterday, it's just enough to wet the ground and that's about it."

Organic farmers face a double whammy, one industry participant pointed out. In addition to grazing requirements, they have to feed their cattle organic hay, which is harder to come by.

"All the Western states now are basically being scoured for any remaining hay that's still there," said Devon Pattillo, a livestock certification supervisor for California Certified Organic Farmers, which inspects and approves farms that want to sell their food as organic.

Straus said he expects to increase the price of his milk, butter, ice cream and yogurt to reflect the increased price of hay and water. He does not plan to fall out of compliance with USDA's organic standards, although he's hoping for a waiver so he can feed his cows more hay and graze them less.

"Our business is not to sell non-organic products," he said. "There will be price increases to reflect the increased costs of our farms." Straus has purchased enough organic hay to last him until the summer, which is increasing his costs by 5 to 10 percent, he said. He's still looking for hay for his suppliers, some of whom could run out in two to three months, he said.

Neighboring Sonoma County is surveying its farmers to assess damages so far. The survey asks farmers whether they have had to cull their herds, import water or take land out of production.

"You just look around our county, and it's brown," said Priscilla Lane, a deputy agricultural commissioner for Sonoma County. "These animals should be out there feeding on the grass right now."

Lane said that Gov. Jerry Brown's (D) declaration of a drought emergency Jan. 17 should help persuade USDA that a waiver is needed.

"That's a real good piece of evidence to support variance," she said.

Farmers are turning to water trucking and purchasing hay from elsewhere in the state to make up for parched pastures. Farmers normally feed cattle some measure of hay, but not to the extent they are now, Kranz said.

"They've had to start much earlier and continue much longer than they would in a typical winter, so right now you've got a lot of cattle ranchers in particular who are trying to figure out how long they can continue to do that, how long that's sustainable and perhaps if they need to market their animals sooner than they would," he said.

"We've had a lot of calls asking if we can help them get rid of sheep," said Jeffrey Westman, executive director of farm education nonprofit Marin Organic. The economics of turning sheep's milk into cheese are difficult to navigate with feed shortages, he said.

Other farmers prepare for worst

The state's announcement last week that it would deliver none of the water that farmers, cities and other users had contracted for this year from the State Water Project, a sprawling system of canals, reservoirs and pumping plants that takes water from the Sacramento-San Joaquin River Delta, is the latest straw for farmers struggling to make ends meet (E&ENews PM, Jan. 31).

California's action to cut water deliveries to zero, from 5 percent earlier in the water season, is dramatic but will not significantly worsen what already is a serious crisis for farmers, said Mike Wade, executive director of the California Farm Water Coalition, an education group that represents farmers, irrigation and water districts and associated agricultural businesses.

"It couldn't have gotten much worse than it already was," Wade said. "I don't mean to minimize," Wade added. "Five percent is terrible, and zero percent is just a little bit worse."

Farmers already know they will have to let land go fallow because they lack water and will save what supplies they have for crops grown on trees and vines, like walnuts and grapes.

The lack of water is expected to affect the supply of many crops, he said, and that includes limiting how much organic lettuce is available. Farmers that use irrigated water for that and don't have supplies won't grow the crops, he said, and there might not be replacement supplies that are certified organic.

Water agencies that get their supplies from the federally run Central Valley Project are assuming the worst as well. The U.S. Bureau of Reclamation will make its initial commitments for deliveries from the CVP in late February.

"We're already anticipating zero initial allocation from the CVP," said Jason Peltier, deputy general manager of the Westlands Water District, which supplies irrigation water to about 600,000 acres of farmland in the San Joaquin Valley. "We want to be hopeful we'll get some allocation ultimately, but it'll take a significant turnaround in the rainfall patterns."

Federal disaster aid on the way

Last week, the State Water Resources Control Board loosened some water quality standards in the delta in order to conserve water for users upstream. The state and federal water projects will be able to hold back 150,000 acre-feet of water that would otherwise be required to flow down rivers and through the delta to maintain salinity standards.

To complement that, the water board also permitted changes in the operation of gates that protect fish migrating up the Sacramento River from getting pulled into the central delta. The gates will be allowed to open so that any fresh water available can move down through the delta, preventing saltwater intrusion.

Peltier said that move might eventually result in more water for farmers. "If the delta gets freshened up, there's a speculative chance we might see some minor increase in the amount of water that moves out, but we're not counting on anything."

About 200,000 acres in his district will remain fallow this season, Peltier estimated, including some permanent crops that will have to be taken out of production. He didn't know whether the drop in production would affect food prices nationally but predicted that some key crops would get more expensive. "My guess is tomato canneries are offering higher prices to farmers in areas with water," he said. "We're obviously going to have a lot less tomatoes than we usually have."

Statewide, half-a-million acres could remain fallow, Kranz said.

"Farmers are deciding whether to go ahead with planting the crops they had intended to plant," he said. "It's entirely likely that as much as 500,000 acres of land in California will be left unplanted this year because there just won't be enough water to sustain the crops that would have been planted on that land."

So far, USDA's Farm Service Agency has been helping farmers in California by granting emergency loans and approving requests for emergency grazing. The farm bill, which passed the House last week and is expected to pass the Senate and go to President Obama's desk in the coming days, also contains disaster assistance for cattle farms and dairies, said Val Dolcini, California executive director for USDA's Farm Service Agency.

Straus, the dairy farmer, is also looking into long-term solutions like desalination.

"When it gets this bad, what other technologies can we use?" he asked. "We're on Tomales Bay, which has lots of salt water."

Reporter Anne C. Mulkern contributed.