Kings County’s top crop is hurting. The state’s dairy producers filed an emergency petition in January asking CDFA to raise milk prices across the five classifications. They want an increase of 35 cents per cwt. Secretary of Ag Karen Ross has until Feb. 2 to decide.
The petition says dairy operators have faced “significant negative margins witnessed every quarter since January 2015 have placed many producers in a dire financial situation.”
“2017 ended on a sour note, with the estimated overbase price reaching the lowest level since June 2016. As we start 2018, producers are facing an even lower overbase price, with current commodity prices yielding an overbase of $13.30 per hundredweight. Unfortunately, the forecast is even more concerning, with potential for prices to fall below that level in the next few months. Compared to the latest cost of production of $18 per hundredweight released by CDFA (third quarter of 2017), this clearly illustrates how the price of milk will be insufficient to cover costs.”
Waiting for a possible federal order is not enough they say.
“If approved, implementation of a California federal milk marketing order could be another year away. Until then we urge the California Department of Food and Agriculture (CDFA) to increase milk prices to prevent the closure of more California dairies,” the petition said.
Kings County pushes HSR to bulk up overpasses
Kings County is pushing California High-Speed Rail Authority to re-engineer plans for seven vehicle overpasses in the county that will span the new rail line so they accommodate higher automotive speeds.
”It is a matter of safety,” says County Supervisor Doug Verboon.
Rural roads see the movement of farm equipment, says Verboon, adding to the need for safety concerns.
”We hope to hear from Diana Gomez about our request,” he adds. Gomez is the Central Valley coordinator for the project.
Cost is a factor in part because more land would be needed to accommodate higher speeds including eating up more adjacent farmland.
Already Gomez and HSR are facing cost overruns and delays on the project and now a new audit will be performed it was announced this week.
The cost of the CP2-3 segment through Kings County was estimated to increase from $2.1 billion to $2.8 billion in a Jan. 16, HSR board report. Another report said “delays to critical work such as the request for Right-of-Way, purchase of ROW, relocation of third-party facilities, and environmental constraints” are also contributing to the delay and increases in costs.
Of course, several lawsuits by Kings County are still pending against HSR as legal wrangling and court appeals have been a clear factor in construction delays.
Meanwhile, HSR still faces stubborn opposition to the controversial project on a visceral level here. This month an irate farm resident stood in front of a bulldozer looking to remove trees on a piece of farm property the Authority now owns, forcing them to call the Highway Patrol to intervene to allow them to carry on with their work.
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Gomez was not available for comment.
Sources familiar with their thinking say this new effort to bulk-up the overpasses forcing a redesign countywide, amounts to another delaying tactic. In any case, the overpasses are being designed to state standards and these rural roads get a low volume of traffic, in any case, their reasoning goes.
Mortgage rates climb
Wells Fargo increased its mortgage rate on a 30-year fixed rate loan to 4.37 and 4.35 APR this week, the highest in four years. Meanwhile, the Mortgage Bankers Association says that applications for both refinancing and purchasing were lower on a seasonally adjusted basis during the week ending Jan. 26. Overall applications were down 2.6 percent.
Diesel fuel price up
AAA says residents in the Hanford-Corcoran metro area are buying diesel for an average $3.64 a gallon. That is up 70 cents from a year ago. While some are quick to blame new state taxes, that is only part of the story. New state taxes and fees account for 27 cents of that while oil company and middlemen margins account for 43 cents of the 70 cent increase.
Oil prices are increasing in part based on the lower value of the dollar. The lower dollar is helpful in sales of our commodities overseas but not so great for consumers at home experiencing pain at the pump. Meanwhile, reports suggest Hedge Funds are helping to push oil prices up. Bloomberg says “Hedge funds reported record wagers on continued price increases for both U.S. and global oil benchmarks, along with gasoline and diesel. “
AAA says typically in winter - fuel prices head down - but not this year.
Tomato crop to reach 12 million tons
USDA reports as of January California’s tomato processors reported contracts for 12.0 million tons in 2018, an increase of 4.3 percent from August 2017. Processors estimate that the contracted production for 2018 will come from 240,000 acres, producing an average yield of 50.0 tons per acre. The contracted planted acreage forecast is a 3.0 percent increase from the record-low acreage reported in 2017.
Pot price moderates
Now they are tracking pot crop prices, a trend we may start watching in Kings County. The wholesale price of cannabis has dropped, with medium-to low-grade marijuana selling for $600 a pound in January 2018, down from $2,000 a pound a year earlier and a steep drop from the high of $4,000 a pound in 2008. That is according to MarijuanaRates.com .
Researchers warn of California warming trend
New UC Davis research warns that in the future, half of California’s vegetation is at a risk of dying because of warming temperatures, based on research covering the past five years. The next two weeks are looking dry say forecasters with a possible wet pattern change by Feb. 15.