California farmers struggle to stay profitable as prices tumble

The Associated Press
Monday December 24, 2001

LOS ANGELES – California farmers say they are struggling with the after-effects of September’s terrorists attacks as major customers in the travel, hospitality and leisure industries cut their orders. 

The agriculture industry, already plagued for some time by falling prices and rising production costs, could hardly afford to lose business in the best of times. 

Combined with the overall economic slump, this latest blow has left many farmers struggling to break even. 

“It’s been a one-two punch, and a lot of growers are still reeling from it,” said Paul Betancourt, a cotton farmer in Kerman and president of the Fresno County Farm Bureau. 

The price of fresh vegetables dropped 24 percent on average in October and November, compared with the same period last year, according to the California Farm Bureau Federation. 

Similarly, the state’s beef industry has faced a 15 percent reduction in market-ready cattle prices since mid-September. 

As consumers opt to stay home and eat in, restaurants, hotels, airlines and amusement parks aren’t buying in the quantities they used to, triggering oversupply and lower revenues for a variety of growers, farmers say. 

“I think people are eating at home more, and they are looking in their refrigerators to see what they have before running out to the supermarket,” said Christopher Deardorff, who grows vegetables, tomatoes and strawberries in Ventura and San Diego counties. 

Deardorff has been harvesting vegetables for nearly two months and said prices on many days barely cover the cost of labor and packaging. 

Edgar Terry, who farms about 1,300 acres of row crops from Ventura to Piru, said prices on his crops of celery and peppers have actually fallen below break-even on some days. 

“Our industry was hurt badly following the events of Sept. 11,” said Bruce Berven, executive director of the Pleasanton-based California Cattlemen’s Association. “Even though now three months have passed, and people’s psyches may be starting to change a little bit, I think we are still seeing the lingering effects of that.” 

But some experts in the industry question whether the impact of the terrorist attacks is as big as some farmers say. 

University of California, Davis agricultural economist Daniel A. Sumner says that while food-service industry demand may have dropped in recent months, there has likely been an increase in demand from supermarkets and other retailers, as consumers eat at home more. 

“Just because I don’t go out to McDonald’s doesn’t mean I don’t eat that day,” said Sumner, director of the campus Agricultural Issues Center. “My guess is we’ve been hurt a little bit, but not that much.” 

Farmers, however, say most home shoppers don’t buy the same volume or the same high quality cuts as restaurants and others in the hospitality industry.