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Bountiful: SLO County agricultural values hit all-time high in 2018 

For the first time ever, San Luis Obispo County's agricultural industry has eclipsed $1 billion in value.

In a record-breaking 2018, local crop and livestock values totaled $1.04 billion, a 12 percent surge over 2017, according to the county's annual crop report released this month.

click to enlarge SETTING RECORDS San Luis Obispo County's agricultural industry amassed $1.04 billion in total crop values in 2018—an all-time high. - FILE PHOTO
  • File Photo
  • SETTING RECORDS San Luis Obispo County's agricultural industry amassed $1.04 billion in total crop values in 2018—an all-time high.

Since 2009, SLO's agricultural economy has grown 66 percent, or by $412 million in overall value.

"It's a milestone year," said Martin Settevendemie, SLO County's agricultural commissioner. "We had really good growing conditions."

Higher rainfall, more available labor, and favorable market conditions helped wine grapes, avocados, vegetables, and field crops all make significant gains in 2018.

Wine grapes ($276 million) and strawberries ($268 million) continued to dominate the local market, with broccoli ($48 million), avocados ($46 million), and cattle/calves ($44 million) rounding out the county's highest valued commodities.

Avocados saw the biggest year-over-year improvements in 2018, with yields up 96 percent and values up 69 percent. For many crops, including avocados, the lifting of the 2011-2017 drought helped with production and sales.

"Over the past few years [during the drought], we had a lot of avocado growers who had to stump trees or even remove them," Settevendemie said. Some of those fallowed groves have since gone back into production.

Strawberries also set records last year: Harvests were up 22 percent and values up $40 million. Vegetables rebounded after a shaky 2017 that marked a 35-year low in production.

Tom Ikeda, a third-generation Arroyo Grande vegetable farmer, said adjustments to H-2A foreign labor as well as outside market forces played a role in SLO's record year.

Farmers are having more success with the H-2A program, which brings temporary foreign workers to the area to fill labor shortages.

"I think there are a lot more people utilizing the H-2A labor program," Ikeda said. "They used that program to try to cover some of the shortages they've had in the years past ... which meant there was more product harvested."

Ikeda said local growers also caught a break last year when Ventura County vegetable farms had issues with diamondback moths—which in turn brought more business to SLO County.

"You're hoping that if there's a problem, it hits some place else and not you," Ikeda said. "For certain crops, we were the lucky ones."

While the 2018 crop report delivered good news on the revenue side of the industry, farmers are quick to point out that those values don't necessarily tell the whole story.

They don't include costs or profits. Rising operation costs—whether they be labor, infrastructure, or regulation related—can offset the revenue gains.

"One thing we noticed on our farm was that revenue was up but so were our costs," Ikeda said. "Even though it looked really good on the revenue side, the nets weren't as good as you might expect."

Brent Burchett, executive director of the SLO County Farm Bureau, also warned against drawing broad conclusions from the crop report.

"Some people might say, 'Oh, farmers are making a lot of money. It's a great time in agriculture.' That's not necessarily the case," Burchett said.

Labor, water, trade agreements, and government regulation are top of mind as continued concerns for the ag community.

Recently, farmers clashed with SLO County supervisors when the board passed a temporary moratorium on industrial hemp, despite the crop's legal status both federally and in California.

The Farm Bureau strongly opposed the policy, which will be up for reconsideration on July 16. Burchett called it a "government grab" on a promising new commodity that had drawn the immediate attention of investors. The county has also heavily restricted the high-valued cannabis industry since it was legalized in California.

"It's really unfortunate we've put back industrial hemp this growing season," Burchett said. "Hemp is one of those crops that today could be a high-gross return for a small farmer."

Federally, uncertainty around the Trump administration's trade wars has also affected farmers. Tariffs on imported steel and aluminum increased the price of farm equipment. Trump's proposed replacement for NAFTA, the CUSMA (Canada-United States-Mexico Agreement), has not yet been ratified by Congress.

"In most cases, not knowing is a lot worse than knowing bad news," Ikeda said of the trade uncertainty. "Threats of tariffs and threats of not having trade agreements has huge effects on future planning."

Burchett said the Farm Bureau supports free trade and the CUSMA, despite its imperfections.

"We don't supports tariffs," he said. "We want to see open borders and markets."

On top of these pressures, farmers also worry about future droughts. Ikeda said he knows he can't bank on wet years like 2018.

"You know that's not going to happen every year," Ikeda said. "I've lived here all my life, and I know another drought is just around the corner." Δ

Assistant Editor Peter Johnson can be reached at pjohnson@newtimesslo.com.

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