- Author: Mary L Bianchi
A question from San Luis Obispo County – “Should I pull out my wine grapes and plant avocados?” Maybe these growers can consider a swap! It’s more likely that they need to research the resources needed to grow each of these crops and the market history and potential for the product.
Locating information on resource needs and markets for new crop enterprises can be challenging. In an article, ‘Considerations In Enterprise Selection’, Karen Klonsky, Extension Specialist Department of Ag Economics UC Davis, and Patricia Allen, Agroecology Program UC Santa Cruz provide insight into the process of evaluating existing crops and selecting new crops. Much of the following discussion is excerpted from their 2001 article.
Klonsky and Allen discuss the importance of setting goals for the enterprise – know where you’re going. A careful inventory of available physical, financial and management resources lets you know what you already have to help yourself get there. An understanding of the resource needs of potential new enterprises will outline the physical, financial and management resources you need to acquire to make the new enterprise successful. Finally, a thorough knowledge of the market you will need to access is critical.
INVENTORY YOUR RESOURCES
The availability of resources will ultimately direct your choice of enterprises simply because the resource requirements among enterprises vary. Resources typically include land, labor and capital, but also include climate, management skills, and access to information and markets.
Carefully evaluate the potential for each of the crops you are considering. Systematically compare the resource needs for each crop to the resources available. Talk to other growers in your area or elsewhere about their experience with the crop you are considering.
Cost estimates of resources needed for establishment and production are often not easily obtained, particularly for crops new to an area. Cost and return studies for some crops in California are available for download from the UC Department of Agriculture and Resource Economics at http://coststudies.ucdavis.edu/.
These cost and return studies offer a way of comparing your current enterprise costs with a potential new enterprise. They can give you a picture of the cultural operations, labor, and equipment needs and costs for a new enterprise. There may not be a cost and return study for your location for the crop of interest. Reviewing the information for several areas can help provide some general information. For instance, there are current cost and return studies for wine grapes for Lake, Sonoma, and Napa Counties, and the Sacramento/San Joaquin areas. Certainly costs might differ for wine grapes in Southern California, but many of the cultural practices, labor, and equipment needs will be similar. Review each item carefully since costs may vary widely. In 2007, studies for blueberry production in Ventura/Santa Barbara and San Obispo County and guavas in San Diego County showed a $385/acre-foot difference in irrigation water cost between the two areas.
MARKET ACCESS AND INFORMATION
Access to markets is the most commonly overlooked factor in the enterprise selection process. But in fact it can be your most limiting constraint. Simply because you can grow something does not mean you can sell it. And just because you can sell a product does not mean that it will be profitable. A third possibility is that you will be able to sell a product at a money making price but that you will only be able to sell a limited amount of the product; that is, less than the total amount that you are able to produce.
Developed in partnership with the UC Small Farm Program and co-authored by UC Farm Advisor Ramiro Lobo in 2008, the Market-Driven Enterprise Screening Guide provides an organized tool for goal setting and inventory. This guide provides a series of questions to help farmers self-evaluate their knowledge of potential new crops or products and the potential for to their farming business.
This guide will help you to answer questions like the following about marketing your new crop:
- Do you have a preferred marketing method? Broker, retailer, direct (roadside stand, farmers market, U-pick), cooperative, contract with processor?
- How much time are you willing to spend marketing your products?
- What is your proximity to various potential markets?
- Have you contacted potential markets for their advice on crop or variety selection?
- Are you familiar with market quality standards for the crops you are considering?
- Have you studied the market history and market trends of the crop?
Following are additional information sources to help answer these questions:
California Department of Food and Agriculture’s Agricultural Resource Directory can be downloaded for free. It provides commodity information summaries by county as well as extensive lists of many of the agencies and organizations included in this article.
Marketing orders and commissions are set up to aid in marketing some commodities and establishing standards for size, grade, and/or maturity. There are federal and state marketing orders and commissions. Some assess fees to growers to pay for research, advertising, or promotion. Links to marketing orders and commissions for specific crops can be accessed by clicking here.
The USDA Agricultural Marketing Service (AMS) administers programs that facilitate marketing of U.S. agricultural products, including food, fiber, and specialty crops. AMS issued its first Market News report in 1915. Today, Fruit and Vegetable Market News disseminates detailed information on marketing conditions for hundreds of agricultural commodities at major domestic and international wholesale markets, production areas, and ports of entry. Using direct contacts with sales persons, suppliers, brokers, and buyers, Market News reporters collect, validate, analyze, and organize unbiased data on price, volume, quality and condition, making it available within hours of collection at no cost to you. You can subscribe to Fruit and Vegetable Market News here.
Agricultural Marketing Service (AMS) provides a searchable database of Farmer’s Markets listings. As of mid-2011, there were 7,175 farmers markets operating throughout the U.S. This is a 17 percent increase from 2010. AMS also provides information about the National Organics Program.
Organic agricultural operations have special needs for production, planning, and management beyond those of conventional farms because of limitations imposed by the terms of organic registration and certification. At present, registration is a legal requirement and certification is a private process independent of government and used by growers and marketers to maintain the integrity of the organic product. Additional information about the certification process to produce organic foods, along with contacts for certifying groups, is available at http://anrcatalog.ucdavis.edu/pdf/7247.pdf
California Ag Statistics Service publishes reports of crops weather as well as field crop and fruit and nut reports weekly. Data is submitted voluntarily by growers and agribusiness.
Researching new enterprise resource requirements and markets takes time. Klonsky and Allen note in their article that playing ‘what if’ on paper is always less risky and less time consuming than experimenting in the field when you are not well prepared.
Information for specific commodities can also be found online. Our San Diego and San Luis Obispo growers looking to change their enterprises might find useful information at the following sites.
Avocado Information http://ucavo.ucr.edu/ is a University of California link that contains information on varieties, irrigation, market standards, and links to additional avocado-related sites.
California Avocado Commission contains information on crop projection, yield and price, research and weather.
California Association of Winegrape Growers was founded to represent the interests and concerns of wine and concentrate grape growers.
WineFiles is a project of the Sonoma County Wine Library. It includes citations, abstracts and links to articles in the technical, academic, trade and consumer wine periodicals as well as newspaper articles, government documents, press releases, advertising brochures and other ephemera dealing with wine.
Grape Crush Report, produced by the California Ag Statistics Service, CDFA, provides details of the crushed tonnage, and weighted average prices reported by grape type and variety, as well as by grape pricing districts. The districts refer to the area in the state in which grapes are grown, for example San Diego = District 16 and San Luis Obispo = District 8.
Grape Acreage Reports, produced by the California Ag Statistics Service, CDFA, provide acreage statistics by grape type: acreage standing (bearing and non-bearing) by year planted, by county.
The data can be quite different from that reported by the county Agricultural Commissioner’s office. Click here for a summary of County Agricultural Commissioners reports.