Sign of Inflation

NEW -> Contingent Buyer Assistance Program
It's been awhile since I read up on it, but I thought that the central valley water projects were primarily built (with government funding) to provide water to the CV farmers (as well as SoCal) and that the water comes to the farmers at a miniscule fraction of what it would cost if it were going to a residence.
 
Close. The government decided it needed the production 50 years ago so it funded the IDs and the project, ammortized the loans over 50 years, and made them principal only. At the time, there wasn't enough production nationwide. I had an ag economics class in the late 1980's where we had calculated advances in ag production allowed the planet to produce double what it's offtake of calories in a regular year. Given the changes in diets over the past 20 years, I'm not sure we're even positive now (we eat more calories per human on the rock now than anytime in the history of man).



So Cal municipalities will be the ultimate benificiaries of the water projects as they will continue to buy farmland, lay it fallow, and transfer the water here.



Most of the stuff they grow in California isn't subject to subsidies the way everything in Kansas and Ohio and Nebraska is. If you farm grapes, or tomatoes, or lettice, or tree fruit, there is no program for you. If you farm corn (non silage) or wheat or soybeans or peanuts you get help. Nobody in California farms those because you have to irrigate them here (in the midwest everyone dryland farms) and the water is too expensive relative to the crops yeald. It is very difficult to get them to be cash flow neutral. Some growers do it for rotation with the justification they get it back somewhere in the production end of another crop, but I think they are fooling themselves. If you can't make a profit on it you shouldn't give yourself the exposure for a loss on a (at best) break even deal.



The capital exposure of a typical grower is staggering. Spending a million dollars a year on production expenses on a million dollars of assets nets about $45,000 if you're farming rowcrops and doing everything right. And you're a little lucky. If you're playing the home game, 2.25% ROI doesn't beat treasuries.



Farmers have it good today for the first time since Nixon was in the White House, but it's not because of farm subsidies or cheap water or anything else but the Fed cutting interest rates and destroying the dollar (making US ag exports competitive on a global marketplace) and an increase of the consumption of meats by a billion or so Chinese moving toward the middle class (meats are fed with grains).



I'm all for free trade but when it comes to ag trade issues, the world is anything but free and fair. In the immortal words of James Carville "If you're explaining, you're losing" but it's a fairly complex deal that evades thirty second soundbites to explain it.



The era of cheap -



* money

* replacment labor

* energy

* calories



is now over. It lasted thirty years. It's a new era.
 
No Vas - Thanks for your informed insight. Have you read "The King of California?" I would be curious to know what you thought if you did. If you haven't, PM me. I would be happy to let you borrow it.
 
I have not read it, but I'm reasonably familiar with the story. I probably should.



Boswell has a headquarters in Pasadena, but th farming operation is mostly in Corcoran, CA. I lived there for several years. Other than Boswell's headquarters and a State Prison that famously hosts Charles Manson, it also has a State Prison drug facility which gets it's fair share of celebert. Robert Downey Jr. had a stint there. The local newspaper photographer knew the guard at the gate, who would call him whenever Whoopi or Mel Gibson or whoever came to visit. When they left, they were met by the photographer and somebody of prominence in the city (the police chief, the mayor, the city manager, you get the idea) and their picture would wind up on the next week's front page.



Mark Arax (the author) is an interesting guy. His dad owned a bar in Fresno, and was brutally murdered in 1972. He wrote a book about it in 1996.



I think at one time he was a staff writer for the Fresno Bee.



<a href="http://books.google.com/books?id=1DHfSxkjNskC&dq=Mark+Arax&hl=en&prev=http://www.google.com/search?q=mark+arax&sourceid=ie&rls=com.microsoft:en-US&ie=utf8&oe=utf8&sa=X&oi=print&ct=result&cd=2&cad=author-navigational&pgis=1">In My Father's Name Link</a>



He has most recently caused controversy for being instructed to not report on/been told he cannot objectively write about the Armenian Genocide.



<a href="http://www.cilicia.com/2007/04/la-times-mark-arax-controversy.html">Source for LA Times Link</a>



I quit following it, but Mark's a tough guy. I'm sure he'll survive it.
 
I really liked that book. I had no idea that the ecology of the CV was originally far different than it is now - one large vernal pool and a wealth of animal and plant life. I know I benefit from the change alot, particularly each time I don a t-shirt or have a steak salad. But if we could just get 10% of the original back (and not in the patchwork they have set up currently), that could be a really great thing to see / experience.



After I finished "The King of California," I bought "In My Father's Name." It was pretty good. If the LAT's new owner had any sense, he would try to bring Mark Arax back. (Yes, I'm looking at you, Sam Zell.) He is a great writer and his roots in the CV provided him with a great background for his CV stories.



Since Wartzman and Arax did such a great job with the Boswell story, I wonder what Russ Parsons (the LAT's food writer) and could accomplish together.
 
[quote author="EvaLSeraphim" date=1209593298]I really liked that book. I had no idea that the ecology of the CV was originally far different than it is now - one large vernal pool and a wealth of animal and plant life. .</blockquote>


I think that might be a nostalgic exaggeration. I suspect it looked more like:



<a href="http://en.wikipedia.org/wiki/California_Valley,_California">California Valley Link</a>



but you really don't know because nobody did the EIRs back then. Without one, we're just speculating.



I have never been to California Valley. It is literally in the middle of no where, and there is no compelling reason to go there. Therefore, I hearby resolve that I'm going next time I go up to visit family. A "shortcut" of sorts.
 
I've noticed that the prices of my favorite restaurants have gone up

drastically. I'll buy that 11% rate of inflation easily.



I'm sure my teeny weeny crops cost far more to grow than purchase

in the grocery store. I just do it for fun and because I don't spray them

with anything, I know they're not poisoned Except for the citrus.



I dump a few bucks of fertilizer on them, and I'm sure the oranges and

grapefruits would cost more at the store. Off season, I don't buy citrus.

They have never been watered in the past 10 years except for what

comes from the sky.



I'm spoiled by the flavor of home grown fruits, the stuff in the store

doesn't begin to compare.



And French small farms produce great food. Very expensive, but great.

And the French are not fat.
 
A place that really doesn't alter their prices that much, I always go to Trader Joe's for my milk and eggs. Their egg prices have gone up recently, $1.49 for a dozen, up from $1.29. Half gallon of milk is still $1.99, but I won't be surprised if it goes up.



Who wants to go to Costco and horde rice with me?
 
Miss No_ and I went to Costco to buy a big TV for a combined Mothers/Fathers day present. I saw a dozen asian families in line with 2, 3, 7, 9 bags. Each.



Only asians. People, this isn't helping.
 
[quote author="lawyerliz" date=1209938323]Yuck.



Desolate. Destroyed?</blockquote>


Welcome to pre 1849 California. Or, California without (publicly funded) water projects. Or, what a lot of Environazi types would like to see California revert to. And when I say "Environazi", understand I'm a Dem. Some of these fools have totally lost touch.
 
[quote author="no_vaseline" date=1210134357]Miss No_ and I went to Costco to buy a big TV for a combined Mothers/Fathers day present. I saw a dozen asian families in line with 2, 3, 7, 9 bags. Each.



Only asians. People, this isn't helping.</blockquote>


Well for most Asian households, its a staple. Don't know how many of my friends have rice thats in the cooker at all times of the day. But its this herd mentality that "oh no, rice is increasing in price and I heard that there are shortages" that just exacerbates the issue. From what I was told, Costco is limiting because they claimed a lot of people from restaurants were hording and they wanted to have enough for the "average household" consumer.
 
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