Agribusiness 2014

AGRIBUSINESS

TUESDAY, February 4, 2014

D1

14 ways to look at plans for estate

By Tom Jennings Now that we are entering the era where the estate tax exemption is not subject to expiration every 24 months, landowners and producers can use these arctic days to either begin or modify their estate planning. The following steps may help owners and producers to get started. ◗ Review balance sheets or other net worth statements to make sure the land values are Tom realistic in Jennings estimating the value of the gross estate. Many owners still allocate $6,000-$8,000 per acre to land that would currently appraise well above $11,000 per acre. ◗ Know that the 2014 Federal Exclusion amount is now $5.34 million per individual, which is up from the previous exclusion amount of $5.25 million in 2013. If the surviving spouse intends to utilize the unused portion of the deceased spouse’s exemption amount, a federal estate tax return must be filed for the deceased spouse’s estate even if the assets of such estate are below the exclusion amount. ◗ Know that the Illinois Estate Tax exemption amount is $4 million per individual, and recognize that this exemption amount is not indexed for inflation. ◗ Along with knowing the exemption amount, landowners and producers should recognize that the lifetime gift exemption and the estate tax exemption are part of a unified tax. Thus the lifetime gift amount is $5.34 million. ◗ Review estate planning documents to be sure that assets flow to the intended heirs or legatees in the manner desired. It is often helpful to create a simple flowchart that follows how such assets would pass to spouses, children and other persons. ◗ Remember that the annual gifting amount for 2014 is $14,000. This number was $14,000 in 2013 and did not index for inflation. ◗ Remember that if owners need to use a special valuation tool known as 2032A, such owners

STEVE SMEDLEY, The Pantagraph

Farmland values in McLean County have increased each year for the last decade, though experts say that could begin to decline this year.

High-quality land in McLean County costs about $15,000 per acre.

Area slowdown Farmland prices may decline after years of rising markets

By Pat Shaver pshaver@pantagraph.com

BLOOMINGTON — McLean County farmland prices, typically some of the highest in the state, may soon be on the decline.

Lower corn prices, in tandem with regular price increases over the past decade or more could combine to slow what has been a booming market, experts believe.

“The general trend from the last 12 to 14 months is the market is at an alltime high. Whenever the market is at an all-time high and it keeps charging higher, you’ll start to see it level off or soften. I predict that we’re going to see it soften,” said Steve Myers, farm manager and crop advisor with Busey Ag Services in LeRoy. The annual gains were the result of several factors, including low interest rates and healthy yields, Myers said.

Class A farmland — the highest quality — sells for about $15,000 an acre in McLean County, while Class B sells for $12,000 to $14,000, said Jeff Lee, broker and owner of Lee Realty Group Inc. in Bloomington. Lee predicts those values will stay at about the same for the next two to three years.

In recent years, the price of Class A farmland has increased by 15 to 20 percent each year because of its good income potential, Lee said, which is mainly driven by corn and bean prices.

But those prices have changed.

Last year, corn was about $7 to $8 per bushel. Today, corn is selling for just over $4 per bushel. Poor weather conditions, including a drought in 2012 led to a smaller harvest, causing crop prices to spike, Myers said.

After focusing on corn in recent years, U.S. farmers plan a shift to soybeans in 2014, according to the latest Farm Futures survey of 1,600 growers’

planting intentions for spring. Producers are ready to cut corn plantings by 3.7 percent from the total USDA estimated in November.

The ground that grew corn could end up in soybeans, according to the survey.

And experts believe good quality soil will remain in demand.

“There’s always going to be a group of people who say ‘I’m getting out,’ but traditionally, people are selling farmland for all of the same reasons they have in the past,” Myers said, mentioning retirements and estate sales. “The take home point, I believe, is that excellent farmland in McLean County is still in very good demand. We’re starting to run out of gas here, but we’re not slipping and sliding to zero.”

But it’s also hard to predict.

“A lot of this depends on where grain prices go and where interest rates go.

SEE LAND / PAGE D2

SEE ESTATE / PAGE D2

Virginia farm is raising crops through aquaponics

By David Nicholson DAILY PRESS

JOE FUDGER, Newport News Daily Press

John Morris nets tilapia that will be sold at his farm in Isle of Wight County, Va. Morris grows produce hydroponically using water from fish he raises as fertilizer for the produce.

NEWPORT NEWS, Va. — Using fish to make fertilizer isn’t a new concept. But John Morris has modernized the process through a sophisticated farming operation called aquaponics.

Last February, Morris turned his eight-acre Isle of Wight, Va., spread into the Herb Aqua Farm. Inside two large greenhouses, Morris raises tilapia fish in large tanks. The fish produce waste, and the waste water is processed into a kind of liquid fertilizer. Part of the water is channeled into hydroponic beds inside the greenhouse and the rest is pumped outside to fertilize Morris’ inground crops.

The operation gives Morris two sources of income. By

March, his first batch of tilapia will have grown large enough to sell. And the crops he grows — lettuces, herbs and vegetables — can be marketed year-round.

“It’s the only farming method where you can produce both a protein product and a farming product,” Morris says.

Lisa T. Perry, director of economic development in Isle of Wight County, says Morris’ operation fits in with the county’s goals.

“It’s another form of agribusiness, and it shows exactly how things are changing in that field,” she said.

Morris, 56, came to farming late in life. For 17 years he was a firefighter in Portsmouth where he grew up. Later he operated a cabinet-making business. In 1999 he moved to Isle of Wight.

One day he picked up a

Farmer’s Almanac and read an article about Rebecca Nelson and John Pade, co-owners of Nelson + Pade Inc., a leading aquaponics firm in Wisconsin.

Nelson is the author of “Aquaponic Food Production” and editor of Aquaponics Journal, which was first published in 1997.

“In aquaponics, plants and fish grow together in one integrated system — without soil,” Nelson wrote in an article for the Agri-View website. “The result is a continuous supply of fresh, organic food that can be grown in minimal space — anywhere — with almost no impact on the environment.”

Before he started on his new path, Morris wrestled with the idea, saying, “I was very nervous ... I fought it tooth and nail.”

SEE AQUA / PAGE D2

D2 • The Pantagraph • Tuesday, February 4, 2014

www.pantagraph.com

For Georgia peanut farmers, sales to China are a bonanza that may not last

By Catherine Brzycki MEDILL NEWS SERVICE

JOE FUDGER, Newport News Daily Press

John Morris nets tilapia that will be sold at his farm in Isle of Wight County,Va. Morris grows produce hydroponically using water from fish he raises as fertilizer for the produce.

AQUA FROM D1

However, he finally sold his cabinet-making shop and purchased a Nelson + Pade system.

“I believe this is my calling,” Morris said. “I didn’t want to wake up when I was 75 years old and wish I’d done something else.

“It was a big decision,” he says, “but you have to keep learning. That’s what keeps us young.”

Morris estimates he’s sunk a total of $175,000 into the business. “If it fails, it fails,” he says, but he’s optimistic. “I have a business mind and I’m methodical.”

He’s also passionate about “green” methods of farming that don’t require herbicides and pesticides.

These products have polluted the Chesapeake Bay and killed off the earthworms and the healthy bacteria in the soil.

LAND We obviously also look at the amount of supply,” said Dave Klein, vice president for Soy Capital Ag Services in Bloomington.

The highest farmland value Klein has seen was $16,000 an acre last year.

The average size of farms sold by Soy Capital, Klein said, was about 100 acres in 2013 and about the same in 2012. In 2011, the average farm size sold was 114 acres and in 2010 it was 129 acres. Klein wouldn’t say how many farms they sell in a year, but said there are currently four farms for sale in McLean County.

Typically, only one farm larger than 300 acres goes up for sale each year, he said.

“By and large we’ve had very positive responses to the farms when they become available,” Klein said. “We listed a farm in January and had it sold and under contract within 10 days.”

Despite the possibility of leveled off or lower land values, Klein said farmland is still a good investment, especially for farmers.

“Farmers tend to reinvest in things they understand, and they know farmland. They buy what they know,” Klein said.

Farmer Dennis Went-

worth, who grows corn and soybeans in southeast McLean County, agreed land is still a good investment, even though demand has waned somewhat.

“I think the exuberance from the last three, four years has slowed down.

But I think investors are looking for farmland real estate to be a part of their portfolio, I think it still offers a safe haven,” said Wentworth, who rents his acreage. “I think the bottom line is every piece of farmland has its own story, whether it’s two neighbors buying an 80acre piece of ground, or 700, 800, 900 acres.”

And the high quality land in McLean County keeps values above state and national averages.

Farmland values in Illinois were an average of $7,800 per acre in 2013.

That’s a 16.4 percent increase from 2012, when farmland cost about $6,700 an acre.

Meanwhile, farmland values in the U.S. increased by $460 per acre, or 13 percent, to $4,000 per acre from 2012 to 2013, according to the U.S. Department of Agriculture.

“The problem with farmland is you don’t buy it for $100 at a time or $1,000 at a time like a mutual fund or something. It is a large initial investment,” Wentworth said.

ingredients, so they have a strong demand for peanuts, peanut snacks and peanut oil,” Grunenfelder said.

Joe West, the executive vice president of sales at a peanut-shelling facility in Georgia, said that when it came to the global increase in demand for peanuts, everything depended on price.

Although China is the world’s largest peanut grower and exporter, it’s gradually been consuming more than it produces, so it must import peanuts from elsewhere. China reached out to the U.S. because the record 2012 crop in Georgia sold at a low price.

“We’ve never seen such an influx of volume at one time in buying interest,” West said. “It wasn’t easy, but the overall experience with China was good. It was a learning experience.”

India’s peanut crop in 2013 was back to what it was before the drought.

Chase, the Georgia farmer, has witnessed trends in his industry changing as global imports have increased. He agreed that the Chinese are price-sensitive, but said trade opportunities did exist if the price was right.

“At a certain level, the Chinese could be a great trading partner,” he said.

While peanut trade with China is new for Georgia, commitment to the domestic market, the local farmers and shelling facilities hasn’t waned.

West, the sheller, offered one possibility of guaranteed, profitable trade for years to come: “If only you can get the Chinese eating peanut butter.”

Jennings is a partner with the law bill with parcel number, do not be afraid to seek firm Livingston, Barger Brandt and and a copy of the relevant advice from trusted tax Schroeder in Bloomington. He holds deeds relating to said parand legal advisors. a M.S. in crop physiology.

FROM D1 cel. must materially partici◗ Determine if all leases pate in the production are in writing. Further, it process using crop share is beneficial to examine leases, leases that are de- the expiration terms of pendent on production, the leases. Many older or cash rent such proper- written leases continue as ty to family members as year-to-year leases undefined by the rules. less terminated by the For Complete Feed Services owner. Modern written ◗ Know that the maxiBellflower, IL Ludlow, IL leases typically expire at mum amount you can re(309) 722-3430 the end of the term unless duce the value of qualified extended by the parties in farmland using the 2032A writing. tool is $1.09 million. This number is up from $1.07 ◗ At the end of the day, million in 2013. ◗ Review Powers of Attorney for Healthcare and Property to make sure these documents have been updated after 2011.

The state of Illinois modified these statutory documents in the year 2011.

Although the older docuMany options available! Mix and match to suit your needs. ments are valid, hospitals and banks are likely to be most familiar with the current format of such documents. ◗ When reviewing powers of attorney documents, make sure the named agents and alternate agents reflect current planning goals. Is all contact information for such persons up to date? ◗ Advise executors and alternate trustees where to locate the relevant information and documents regarding the estate plan. ◗ Take the time now to Hopedale, IL • Toll Free 1-888-449-3368 prepare a simple binder containing a plat diagram www.raglandbuildings.com of the farm parcel(s), an 20605628 aerial photograph of such parcel, a copy of the tax

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FROM D1

Two 21-by-96 foot covered bays hold a maze of steel tanks and pipes.

At the far end sit large hydroponic beds waiting to be planted. Morris uses a wood furnace to heat the facility.

Using large grow lights suspended from the ceiling, Morris says, “It’s a year-round growing operation ... I’ll have crops in January.”

Morris purchased his first batch of small tilapia called fingerlings back in August. The warm-water fish live in tanks heated to about 72 degrees.

The waste water is filtered through a clarifier that traps the solids. The nutrient-rich water is pumped into the beds.

In his hydroponic beds he’s growing basil, lettuce, Swiss chard, yellow pea tomatoes and radicchio. He wants to add kale because “everyone at the farmers’ market was asking for it — they juice it.”

OGLETHORPE, Ga. — Another peanut harvest has come to an end, and the fields of southern Georgia are littered with gray vines, which will fertilize next year’s crop.

For farmers in southern Georgia, 2012 was a record-setting year; 2013 paled in comparison. As they talk about 2014 and how the markets might change, one thing always comes up: China’s massive potential market.

“We had a spectacular crop in 2012,” said David Chase, who’s been farming here for 20 years. “That has weighed on the market into 2013, and it might still be shelled into 2014.”

The United States exported its largest yield of peanuts in 2012, nearly 265,000 tons, valued at $470 million.

According to peanut experts, that’s a crop and a half.

The record-setting harvest yielded an excess supply that would have sat in warehouses, but Georgia found a new trading partner: China. While China usually imports peanuts from India, a terrible drought in 2012 destroyed nearly all of that country’s crop.

Instead, the Chinese turned to the U.S., with shipment after shipment heading across the Pacific. On Dec. 28, 2012, for example, a ship that left the port in Savannah, Ga., carried $357,000 worth of peanuts, destined for the Port of Qingdao in China, according to records maintained by PIERS, an export and import tracking service. On Jan. 30, a shipment that contained $244,000 worth of “run-

ner jumbo peanut” made its way east.

Many others followed.

“In the 2012-2013 year, for the first time ever, we’ve exported significant shipments to China,” said Stephanie Grunenfelder, the vice president of international marketing for the American Peanut Council. In late 2012 and early 2013, the U.S. exported about 76,000 tons of peanuts to China.

“That’s a third of our overall sales in three months, from nothing the year before,” she said.

Georgia is the leading peanut producer in the United States, providing more than 45 percent of the American crop per year, according to data from the University of Georgia. Since trading with China in 2012, Georgia’s economy stands to gain even more ground internationally, but that future is uncertain.

“China is something we’re really going to be watching over the next couple of years, because they have an emerging middle class,” Grunenfelder said.

After two consecutive years of drought, all the stars aligned for perfect weather during the 2012 growing season.

That led to a massive crop. And although farmers might have overplanted, Grunenfelder said that because of China, they were able to export more than they thought they would.

Grunenfelder said that with more disposable income in China, people there would spend more on their diets. In China, peanut oil is used for cooking much more than it is in the United States. “It’s one of their main

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U.S. olive oil producers are taking aggressive stance toward importers

Beef industry moves past mad cow scare

By Megan Pauly MEDILL NEWS SERVICE

By David Pierson LOS ANGELES TIMES

MEL MELCON, Los Angeles Times

Gondola operator Javier Alanis looks on as a gondola is used to lower olives that were just harvested into a collecting bin at California Olive Ranch in Artois, Calif.The bin can hold up to 33,000 pounds of olives. with olive oil, something 100 percent pure olive oil cording to California Olive similar can happen,” made by pressing or Ranch President and CEO Sumarroca said. “Besides, crushing olives; it is low in Gregg Kelley.

A former technology the climate and soil con- acidity and contains no executive who joined the ditions for growing olive chemicals or additives.

California Olive Ranch company in 2006, Kelley trees in California are exis at the forefront of the can appear exasperated cellent.”

California isn’t the only U.S. increase. The compa- when he speaks about Old place Sumarroca is put- ny is using a technique World methods.

“Vast amounts of olive ting down roots. Agromil- known as Super High lora, which has set up an Density farming, or SHD, oil from Spain and Italy is olive tree nursery in Grid- that calls for planting as low quality because they ley, Calif., has similar op- many as 675 trees per acre, have difficulty getting the erations in Australia, compared with 125 per fruit off the trees,” he said.

Chile and Turkey — na- acre in conventional olive He likens many of the tions with Mediterranean farming. Trees are planted popular imported brands climates where olives close together, then their to “glorified vegetable thrive. It’s all part of an branches are pruned and oil.”

Kelley said he can deliveffort to feed surging de- trellised to form a single mand for olive oil, a $5.4- dense hedge. That allows er better-quality extra growers to use rolling ma- virgin oil at a competitive billion global trade.

But nowhere is that po- chines called over-the- price.

A 500-milliliter bottle tentially more fruitful row harvesters to move than in the U.S., whose down the hedgerows, of California Olive Ranch olive oil consumption has shaking the fruit off trees. sold for $7.58 recently at a The process is cheaper, Wal-Mart in Rosemead, more than tripled over the last two decades. Domes- faster and yields more oil Calif., a slight premium on tic olive oil makers have per acre than using teams popular imported extra increased production ten- of farmworkers or con- virgin olive oil brands such fold since 2007 to 10,000 ventional harvesting ma- as Bertolli ($6.74) and metric tons. Demand is chines. And it ensures Carapelli ($7.24). particularly strong for so- better quality because called extra virgin olive olives reach the mills beoil. The highest grade, it is fore they start to spoil, ac-

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ARTOIS, Calif. — Nestled in a corner of the Sacramento Valley known for its rice, almonds and walnuts, densely packed rows of manicured olive trees stretch toward the horizon.

This 1,700-acre spread is the domain of California Olive Ranch, an upstart company with big ambitions.

The U.S. is the world’s No. 3 consumer of olive oil, drizzling 293,000 metric tons of the stuff over salads and pizzas last year. Yet almost every drop was produced overseas in countries including Spain, Italy and Greece. Unable to compete with heavily subsidized foreign competitors, U.S. producers have focused on pricey artisanal oils.

The California Olive Ranch is changing that.

In just a few years, the Chico, Calif., firm has become the largest U.S. producer, dominating the market for domestic extra virgin olive oil. Its square green bottles can be found in retailers as diverse as Wal-Mart and Whole Foods. It’s also supplying big restaurant chains including California Pizza Kitchen.

And far from being deferential to its European elders, the company has come out swinging. It has publicly disparaged the quality of some foreign brands and is pressing the federal government for import restrictions.

“They have shaken up the industry,” said Curtis Cord, publisher of Olive Oil Times, a trade publication. “The Europeans have had a run of the place for a long time.”

But this made-in-USA story has a twist. The chief owners of California Olive Ranch aren’t Golden State farmers but a group of wealthy Spaniards.

They include members of the Sumarroca family, a clan of Catalan industrialists who are banking on the New World to expand their agricultural empire.

Their group has invested millions buying 4,000 acres of California farmland and contracting with more than 60 local olive growers. And it has built a state-of-the-art milling facility in its flagship ranch in Artois, 90 miles north of Sacramento, with the expectation that the U.S. is primed for an olive oil revolution.

Speaking from Barcelona, Carles Sumarroca, chairman of a massive plant nursery operation called Agromillora, said he thinks California can do for olives what it did for wine grapes.

“The U.S. for many years was basically an importer of wine, and then decades ago the wine industry in California started to grow...We think that

WASHINGTON — Beef has long been a quintessential American staple, captured decades ago in the marketing slogan “Beef. It’s What’s for Dinner.”

These days, however, more and more of the red meat is making its way from farms in the United States to tables in numerous countries abroad, where many diets are incorporating more beef.

One of the biggest increases has been in Hong Kong, one of two regions that are part of China but have separate trade policies.

According to U.S. Meat Export Federation data, Hong Kong’s imports of U.S. beef have been steadily climbing since 2004, after a mad cow disease scare in 2003 settled down. The value of U.S. beef exports to Hong Kong has doubled since 2010, up to $331 million from $155 million. The number was only $198,000 in 2004.

As for mainland China, U.S. beef has been banned there since the mad cow scare, although there are signs that might end. If it does,that represents a major reopened market — and many new opportunities

— for U.S. beef farmers.

At technical trade talks in Beijing in December, Chinese officials promised to ease restrictions on beef from the U.S. in 2014.

The recent spikes in Chinese demand for beef are due to a few factors.

According to a recent U.S. Department of Agriculture report, one reason is foodsafety incidents with Chinese poultry and pork, which pushed consumers toward preferring beef.

This growing hunger for beef can also be attributed to changing diets among the Chinese, according to Steve Kelly of the Kansas Department of Commerce. Advertisements for beef — particularly for fast-food establishments such as McDonald’s — have made their way abroad,according to Judith Farquhar, a University of Chicago professor of anthropology.

China’s cultural appetite for beef was whetted long before McDonald’s took root, however. During times of famine, meat was in very short supply, leading people to idealize and crave it, Farquhar said.

A keenness for beef over other meats in China took a while to catch on, however, as food is usually served there with chopsticks or spoons.

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D4 • The Pantagraph • Tuesday, February 4, 2014

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By Dan Glickman and Kathleen Merrigan LOS ANGELES TIMES

Many Americans would like to know more about what they eat, including whether the food they purchase contains genetically modified organisms, or GMOs. That desire has sparked ballot initiatives and bitter fights in states across the country. But what a lot of concerned consumers don’t realize is that there is already a way to ensure that the foods they purchase are free of GMOs. During the Clinton administration, we were responsible for implementing the Organic Foods Production Act. One of the implementation decisions that had to be made about the law after its passage was whether GMOs could be used in organic food. After receiving nearly 300,000 public comments during the rule making process, we said no. This means that foods certified as organic are also GMO-free.

So why aren’t more consumers aware of this?

Because producers of organic food are in effect banned from letting them know.

Personally, neither of us is opposed to the use of GMOs and believe they can address important food and agricultural needs. The public made clear, however, that it didn’t feel such organisms belonged in food with an “organic” label.

For more than a decade, organic farmers, ranchers and food processors have been subject to rigorous annual inspections to ensure they are in compliance with national organic standards. The scrutiny is carried out by agents accredited by a division of the Department of Agriculture. But responsibility for overseeing food labeling lies with another part of the USDA, along with the Food and Drug Administration, and they continue to reject petitions by organic food producers who want to label their products as “GMOfree” or “produced without use of GMOs.” Absent such labeling, we continue to have expensive election fights.

Recently, for example, a ballot initiative in Washington state sought to mandate labeling of food produced using genetic engineering. It was narrowly defeated, but only after months of debate and $30 million of spending by those wishing to sway voters one way or the other. Connecticut and Maine have both passed laws requiring labeling of foods containing genetically modified organisms, although the laws won’t go into effect until neighboring states pass similar labeling laws.

We believe that much of the energy around GMO food labeling would dissipate if the federal government honored the original deal we struck on organic food and allowed producers to label their products as GMO-free.

Resistance by the USDA seems especially incon-

sistent, given that one branch of the agency enforces the organic rule, including the GMO prohibition, while down the hall, another rejects labels submitted by organic companies.

For many years, the agency said this was because it had no way to verify such claims.

Thanks to Secretary Tom Vilsack, who issued a memorandum directing all USDA agencies to recognize the department’s organic standards, the verification objections are dying down.

But now there is debate over what a label should say. The FDA published draft guidance on voluntary GMO labeling in 2001 but has never completed its document, leaving the organic industry in limbo.

Recently the USDA has indicated a willingness to consider “non-GE” as a potential label claim.

That is the term preferred by the biotechnology industry, but it is unfamiliar to the vast majority of consumers.

Another impediment to labeling cited by regulators is the fact that there are trace amounts of GMOs in the environment, which makes producing an absolutely pure GMO-free food product challenging. But this is reason for industry and government to work harder to find ways to prevent cross-contamination of crops, not sufficient justification to reject GMO-free labels.

There is broad consensus that a threshold for an allowable — and unavoidable — amount of GMOs in organic and other nonGMO produced food is a necessary accommodation. The U.S.-based Non-GMO Project and European countries set this threshold at 0.9 percent. The USDA and FDA should adopt this threshold and move forward expeditiously.

An organic GMO-free label would also help consumers distinguish organic food from food labeled as “natural.” Natural foods are eroding the organic market space, despite the lack of any clearcut standard for what the term means or federal oversight. Allowing organic products to be labeled GMO-free would provide a clear distinction between the terms “organic” and “natural.”

Mandatory GMO labeling of all food will continue to arouse passions on both sides of the issue.

Though it may not satisfy all GMO-labeling advocates nor be welcomed by all leaders in the biotechnology industry, allowing a GMO-free organic label provides more choice in the marketplace and responds to the demands of millions of American consumers in a practical and common sense way.

Dan Glickman, a former congressman, was secretary of agriculture from 1995 to 2001. He is executive director of the Aspen Institute Congressional Program. Kathleen Merrigan, now a consultant, was deputy secretary of agriculture from 2009 to 2013. Among her clients is a large organic-farming cooperative.

They wrote this for the Los Angeles Times.

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Global demand drives almond production up

By David Pierson LOS ANGELES TIMES

LOS ANGELES — One of California’s top ambassadors often comes lightly salted and travels in a vacuum-sealed can. Eat an almond anywhere in the world and chances are that it was grown in the Golden State.

California produces 82 percent of the globe’s almonds, harvesting about 800,000 acres of the tree nut across a 400-mile stretch from northern Tehama County to southern Kern County.

Fueling the boom is robust foreign demand, particularly from emerging consumer markets like China and India, where the industry has been promoting almonds as a healthful snack.

About 70 percent of California’s almonds are sold overseas. That made the crunchy nut the No. 1 state agricultural export in 2012 at $2.5 billion. That’s two times more than wine, the second-most-valuable California agricultural export, according to the U.S. Census Bureau.

“The U.S. is the 800pound gorilla of the global almond industry,” said Karen Halliburton Barber, assistant vice president and senior analyst for produce at Rabobank, a leading agricultural lender.

“They’re the dominant producer.”

The Almond Board of California forecasts that the state will harvest its third-largest crop this year at 1.85 billion pounds — slightly less than last year’s 1.88 billion pounds.

That’s more than three times what the state was producing in the late 1990s.

Experts are optimistic that the industry can maintain that sort of volume in the coming years. Foreign demand is expected to increase.Competition should remain light.The main barriers to continued growth are access to land and tightening water supplies.

“We’ll run out of dirt and water before we run out of almond markets,” said Daniel Sumner, director of the Agricultural Issues Center at University of California-Davis.

The biggest of those worries is water. Almonds are a relatively thirsty crop, and farmers need to water them even during dry spells.

California suffered its worst drought conditions

BRIAN VAN DER BRUG, Los Angeles Times

Workers hand-sort almonds for defects after the nuts have passed through laser sorters at Paramount Farms in Los Hills, Calif. California produces 82 percent of the global supply of almonds. in 90 years between January and May, leaving reservoirs dangerously low and state water allocations to farmers well below historical averages, according to the Bureau of Reclamation.

The stingy water supplies resulted in smaller almonds this year.

“Water is a huge challenge,” said Richard Waycott, chief executive of the state almond board. The group has partnered with the University of CaliforniaDavis to promote a variety of water conservation plans using micro sprinklers and soil moisture monitoring systems.

Growers are harvesting more almonds and using less water per acre than in years past. But the sheer acreage of California’s almond industry means water will remain a concern.

Still, with almond prices nearly doubling in the last five years to $2.58 a pound, it’s little wonder that growers have been abandoning crops such as cotton and furiously planting almond trees. There’s twice as much almond acreage in California as there was two decades ago. Meanwhile, cotton acreage has dwindled to about 400,000 acres from 1.3 million acres over the same period.

“It feels like almonds became rock stars overnight,” said Karen Ross, secretary of the California Department of Food and Agriculture.

“But they’ve been building in bits and pieces for years. I look at almonds as a great case study because they were very strategic and willing to make longterm investments.”

Central to that plan are

nutritional research and clever marketing. The Almond Board of California has funded a number of studies, including an October report in the European Journal of Clinical Nutrition showing that eating dry-roasted, lightly salted almonds could sate hunger without increasing body weight.

Almonds are a major part of the farming portfolio of Beverly Hills, Calif., billionaires Stewart and Lynda Resnick, who own brands such as Wonderful Pistachios, Pom Wonderful pomegranate juice and Halos mandarin oranges.

The couple’s Paramount

Farming Co. has been expanding its almond acreage in Kern and Madera counties to meet growing global demand for the tree nut. It farms 46,000 acres of almond orchards, a space the size of 13 Los Angeles International airports that produces 6 percent of the state’s almonds.

“This is a natural place to grow almonds,” said Joe MacIlvaine, president of Paramount Farming, surveying the company’s vast acreage in Lost Hills, a dusty flat 50 miles northwest of Bakersfield, Calif.

“You need that Mediterranean-type climate or it won’t work.”

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Grafting lets you grow a rainbow of fruit

By Debbie Arrington THE SACRAMENTO BEE

SACRAMENTO, Calif. — Most of the year, Drew Bohan can pick fresh fruit from his Carmichael, Calif., backyard. In his quarter-acre garden, he has more selection than any supermarket: More than 70 varieties — and growing.

“I had more than 120 varieties in my little east Sacramento yard,” he noted. “When we moved, I tried to bring my favorite trees, but I couldn’t move everything. But that’s OK.” It’s an opportunity to try new combinations: Six peach varieties on one tree or eight different apples growing together off the same trunk. Or how about an all-in-one peachplum-nectarine tree?

That’s the magic of grafting; multiple varieties can grow in the same space.

Scions (pronounced SIGH-ons) are branches that can be attached or grafted to rootstock or existing tree trunks. That budwood will grow true to its variety regardless of what fruit the roots or trunks originally bore.

Grafting can turn a peach tree into a nectarine or an apple into a quince. It also can add multiple varieties to one tree.

The popularity of growing food in suburban gardens has extended into fruits and nuts, noted Bohan, the chapter’s president. But lack of space limits what many gardeners can produce.

Through grafting, that limit can be stretched — a lot.

“Take peaches,” he said.

“Most people have a peach tree and the whole harvest

OWEN BREWER, Sacramento Bee

This espaliered apple tree contains six varieties of apples thanks to grafting. comes in two weeks. It’s boom, then bust the rest of the year. I grafted several varieties of peaches onto the same tree. My harvest starts in early June and I’m still picking peaches in November. That’s five solid months of peaches off one tree, not just two weeks.”

More than 200 gardeners showed up at last year’s exchange, he added. “More and more people are interested in this. Anybody can do grafting. I’m completely uncoordinated with my hands, but this is very very easy and it’s fun. The biggest benefit is you can get all these varieties with flavor.”

For example, Bohan had a Golden Delicious apple tree — nice, but kind of boring.

“Golden Delicious is the sweetest-tasting apple,” he noted. “I thought it would be fun to graft on a Granny Smith, one of the tartest apples. Then, I added a couple more apple varieties and a quince. It became a really neat conversation starter; all these different fruit growing to-

gether on the same tree. I called it my cocktail party tree.”

At a recent scion exchange in Sacramento, Calif., gardeners had their

choice of more than 100 varieties of fruit. The scions were free.

“All these people milling about; it’s a madhouse,” Bohan said with a chuckle.

“We have many conventional varieties but also some rarities. What people want is all over the board.”

Some gravitated to the peaches. (July Elberta is Bohan’s favorite.) Others clustered at the cherries.

(Rainier is consistently good.)

“Cherries are another crop that can be extended through grafting,” Bohan noted. “You can have months of cherries on one tree.”

For beginners, Bohan recommends apple, peach, nectarine and cherry varieties. They’re easy to work with and grafts grow onto the host tree or rootstock with little effort.

“You can do those with one eye closed,” he said.

“Some can be difficult. I’ve had lousy luck with pomegranates; the bark is too thin and it can be hard to

(take hold). Plums can be difficult, too. But the others can be grafted in under 90 seconds.”

In addition to getting scions and rootstock, gardeners will also find plenty of fruit-growing advice from these experts. Living up to their society’s name, California Rare Fruit Growers cultivate just about everything from avocados and citron to jujubes and walnuts.

“My goal is to get more people interested in growing fruit,” said Bohan, the father of two small children. “My kids are fascinated by it. They’re ages 6 and 4. They’ve already learned how to check to see if it’s ripe instead of just pulling it off. They love fruit.”

And they know where to find it — right outside their back door.

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D6 • The Pantagraph • Tuesday, February 4, 2014

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