2020 Ag Journal Spring

Ag Journal Daily Record Spring 2020

CWU farm has bee colony up and running Local hay industry is in better shape than last year Supply chain concerns have certain food prices surging 401 N. Main Street Ellensburg, WA 98926

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Table of contents

Ag Journal Editor Michael Gallagher Publisher Heather Hernandez Advertising Contact us: Ag Journal 401 N. Main Street Ellensburg, WA 98926 509-925-1414 The Ag Journal is published three times a year by Kittitas County Publishing LLC. Contents copyrighted 2020 unless otherwise noted.

CWU bee colony up and running Page 4

Hay industry in better shape than last year Page 6

COVID-19 hit California’s flower industry at the worst time

Key foods more expensive after virus upends supply chains

Page 10

Page 12

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Wildcats buzzing

Central Washington University farm has a bee colony up and running

Contributed

The farm is located on the north side of the Central Washington University campus.

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Contributed

Honey bees are being introduced this spring at The Farm on the north side of the Central Washington University campus.

T

he Wildcat Neighborhood Farm is off and growing again. And this spring, there’s even more of a buzz.

A colony of honeybees has been flying around the five-acre patch of farmland on the north end of the Central Washington University campus for the past couple of months, adding a new dimension to The Farm during its second growing season.

“We’re really happy to have the bees because now, our crops have pollinators on site,” said Kate Doughty, CWU’s farm and sustainability manager. “They also provide a good opportunity for people to learn. It’s been fun to see this very important species in action.”

With any luck, the bees will soon be producing honey, but that side benefit will have to wait at least a few months.

“We don’t know how much honey the bees will produce in the first year, but it’s definitely a positive for us,” Doughty said.

Also new this year at The Farm are three 30-foot by 72-foot high tunnels.

Two are being used to produce vegetables and herbs, while the third has been reserved as a seed starter. A sec-

ond 10,000-square-foot field also was added this year, providing additional capacity for row crops. Carrots, winter squash, beets, and a variety of salad greens are currently growing in 50 100foot rows.

Some of the produce — including arugula, spinach, and mixed salad greens — will be available later this month. There’s even a pumpkin patch.

“With the high tunnels and the second field, we will definitely be able to produce more volume this year,” Doughty said, adding that potatoes and tomatoes have also been added to the mix.

The Farm is a long-term venture that serves more than just one purpose. In addition to providing food to Dining Services and community members, the sustainability center and outdoor classroom supports education, community health, and environmental stewardship by examining the social and ecological implications of the food system.Campus chefs, environmental science faculty, and community gardeners also have embraced The Farm’s mission.

It’s been fun to build something new that the whole community can get behind,” Doughty said.

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For the DAILY RECORD

Good news, bad news

Daily Record File

A thriving crop of timothy hay covers a field along Hansen Road west of Ellensburg in 2017.

6 | 2020 Ag Journal - Spring

Local hay industry in a better position than last year, but COVID-19 complicating shipments

By KARL HOLAPPA staff writer

A

s Kittitas County producers gear up for the 2020 growing season, local exporters are working to sell off carryover from last year’s crop while navigating complex shipping challenges incurred by the coronavirus pandemic.

Ward Rugh President Corey Rogers said their inventory is looking good, especially compared to where they were this time last year.

“We have less overall inventory,” he said. “We should not be carrying over any higher-grade timothy, premium dairy and higher. If we have anything to carry over, it’s going to be the lower grades like number one and lower. Even with that said, we’re still in a way better position right now than we were one year ago.”

Rogers said the primary reason for having less inventory this year is the high quality of last year’s harvest, one of the better ones he said he’s seen in both the Columbia Basin and in Ellensburg.

“The quality that was created from last year’s harvest was mostly high-grade,” he said.

“Customers still want and need the lower dairy grades, so we were able to clean up a lot of the carryover from 2018 into 2019. The dynamics of how the harvest went last year was just perfect.”

Although Rogers said they are busy and have regular orders to fill, he said the biggest challenge currently as an exporter is getting the product to the customer. As the COVID-19 pandemic hit Asia, he said vessels stopped calling at West Coast ports from China. With the frequency of vessels arriving at the ports in Seattle and Tacoma, Rogers said it resulted in a lack of shipping containers available to

Daily Record File

An employee of Ward Rugh Inc. of Ellensburg operates bale compression machinery in late September 2017 on second-cutting timothy hay. send product back across the ocean to customers.

“That challenge is still very much alive, and that’s our biggest challenge right now,” he said.

An added impact on the logistical challenge facing exporters is the current schedules at the ports. Rogers said ports typically operate five or more days a week, but during the pandemic have begun to close for an extra day due to the lack of ships arriving.

“That’s never happened where they’ve been closed for a full day every week,” he said. “When

that happens, you’re limited in what you can take over on a given day, depending on if the shipping line you use calls on that terminal that’s closed.”

Rogers said the days the terminals are open see heavy congestion due to their condensed schedules.

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Hay Continued from Page 7 When normal trips through the terminal took around an hour, Rogers said that experience can stretch towards six under the current conditions. With all the challenges involved with getting product out, he said the key is patience for all who are involved.

“Just the expectations that when you send a driver over there with a load, sometimes they’re going to have good days, but most of the time right now they have bad days because they’re sitting over there for a long time,” he said. “We’re waiting for equipment. A lot of times you’re at the terminal and they don’t have any 40-foot high cubes, so you’re basically waiting for some import container to come back in off the street.”

WORLD MARKETS

As world markets begin to

claw back from the impact of the pandemic, Rogers said regular conversations are being had with both the shippers and the Northwest Seaport Alliance which oversees both the Ports of Seattle and Tacoma about how to address the upcoming export season.

“They’re having weekly meetings, providing updates terminal by terminal about what’s going on,” he said. “What we expect now that China’s manufacturing is kind of getting back on course is that we’re going to huge surge of containers coming into the U.S. West Coast, which is good for us because we’ll have a lot of equipment at that point.

Once that surge is over, we could have a little lull in equipment.”

In the meantime, Rogers said exporters will continue to be in constant communication with shippers to find ways to mobilize equipment so the product can get from grower to customer.

“The orders are there,” he said. “It’s just a matter of working through the maze here to get your cargo into a

container and back over on a ship.”

Mike Hajny of Hajny Trading Co. said they are beginning to see inventories of top-end product begin to tighten up, with premium cattle and second-cutting supplies being limited in availability.

“Some of the lower dairy grades there seems to be some availability and most likely carryover of those lower quality products in the new crop,” he said.

Although Hajny doesn’t expect to have any carryover in his inventory going into the season, he said exporters who do have remaining inventory will most likely offer the product at competitive prices to make space for the 2020 crop. Doing so will be a challenge, as he voiced concerns similar to Rogers at Ward Rugh about logistical chokepoints.

“That situation seems to be getting worse as we go,” he said.

“It’s very challenging as steamship lines have more blank sailings, and we’re finding that the schedules are changing daily from the shipping lines. We are shuffling on an hourly

basis.”

Hajny said the key to alleviating the strain on shipping will depend on the import loads coming into the country from Asia.

“The situation doesn’t look rosy, up until new crop at least,” he said.

Adding to the complications is what Hajny sees as an angst about curtailed excitement about customers placing orders on the new crop until the previous orders can be efficiently shipped to them.

“It causes some concern about how brisk the new crop market’s going to start,” he said. “Just wait and see what the rotations and vessel availability are.”

Stressors aside, Hajny said he is looking forward to having a quality product to sell to his buyers once conditions related to shipping begin to improve.

“I think we’re very optimistic about the upcoming crop,” he said. “It’ll work itself out eventually, hopefully sooner than later.”

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A thriving crop of timothy hay covers a field along Hansen Road west of Ellensburg.

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Survival mode

TNS

Field worker Martin Gonzalez harvested ranunculas from the Flower Fields east of Interstate 5 in Carlsbad, Calif.

10 | 2020 Ag Journal - Spring

Coronavirus hit California’s cut-flower industry at the worst time

By Geoffrey Mohan Los Angeles Times It happened this fast: Shoppers frightened by the novel coronavirus ransacked grocery stores.

Store managers shifted staff to restock shelves. The floral booth went empty. California’s cutflower industry imploded.

Sure, there are lots of nuances to this tale of tumbling economic dominoes. But at its core is the simple fact that few will buy a perishable luxury item when they fear for their lives. That could spell the end of many farms in California’s $360 million cutflower industry.

Since mid-March, sales have fallen an average of 85% on California’s 225 flower and foliage farms, while the labor force has dropped by a similar proportion, according to the California Cut Flower Commission, a state agency that promotes the industry.

“We have companies that won’t be here when it’s over,” said David Pruitt, chief executive of the commission.

The novel coronavirus has proved as lethal on an economic scale as it is on the human scale, hitting a highly vulnerable industry in the most precarious part of the season.

“The cut-flower industry has been battling offshore production for many years, and margins are razor thin; so it’s kind of a tipping point,” said Michael Mellano, CEO of Mellano & Co., a thirdgeneration grower and wholesaler headquartered in Los Angeles’ downtown Flower District.

“This is our busiest and most profitable time of the year,” Mellano said. “So, it’s absolutely the worst time for something like this to happen.”

Mellano said he laid off more than 90% of his staff and went into survival mode, hoping to gear up his Southern California and Las Vegas distribution hub when the market revives.

There probably won’t be a grand reopening for Lompocbased Ocean View Flowers, which produced 40 million stems only two years ago. Its producegrowing parent company, Santa Barbara Farms, closed the flower operation permanently, according to company and industry sources.

Eufloria, whose boutique roses have adorned New Year’s Day floats in Pasadena and thoroughbred horses at Churchill Downs, announced it would shut down its Nipomo farm on March 18. It laid off most of its workers and donated unsold stems to hospitals and nursing homes.

But such was the outcry from fans and clients, Eufloria reopened two days later.

“We are starting to bring some of that employment back,” sales manager Chad Nelson said. “We want to make sure that we’re doing things to keep (plants) producing the way that they should, and if and when this market does come back, then figure out how we can handle those orders.”

Coastal farms from San Diego County through Humboldt County likewise laid off most of their workers and went into dormancy at the very time when they usually earn the bulk of revenue — the string of holidays from Valentine’s Day through Mother’s Day. Chain groceries were among the first to cancel orders, said F.J. Trzuskowski, vice president of sales for Washington-based Continental Floral Greens, which grows the “supporting cast” green foliage for bouquets on three California farms.

“There was no forewarning of this. It was like, ‘Hey, stop all shipments starting now,’ ” Trzuskowski said. “Then with social distancing, all of a sudden the wholesaler can’t be open to the public. It was a very quick stop to the industry.”

Mellano said he also was hit hard by cancellations of events such as conferences, particularly

in Las Vegas.

Weddings were put off, along with their roses, said Eufloria’s Nelson.

“Maybe they didn’t happen right now, but they’re going to happen, right?” he said. “We just don’t know what size they’re going to be when they do happen. Budgets are going to be different.”

DISTRIBUTION PIPELINE

The California Cut Flower Commission has told its members that floriculture is protected under the agricultural exemption to closure orders. But with the collapse of the distribution pipeline, the clarification amounts to a technicality. Los Angeles’ historic flower market, like others around the nation, is a ghost town.

“We’ve got wholesale companies closing down and retail stores, which in some cases have business, are losing their normal lines of distribution,” CEO Pruitt said. “We’re in the process of trying to put that back together.”

Pruitt said it’s hard to predict how many farms will fail and which ones will have enough funds left to reboot once demand increases. Growers could switch crops or hedge their bets, as some of the financially strapped greenhouse operations did by leasing space for cannabis cultivation when that crop was added to the California agricultural portfolio in 2016.

Cut flowers are a $1.3 billion industry nationwide, though most of that revenue comes from the sale of imported flowers, predominantly from Colombia, according to the UC Davis Agricultural Issues Center. Domestic growers account for about 27% of national sales, down from 37% roughly a decade ago. Californiagrown flowers account for threequarters of the national domestic sales, according to the UC Davis researchers.

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Andean nations in South America as part of the war on drugs are largely responsible for the decline of California’s flower industry. While Colombia and Ecuador dominate the market for bouquet mainstays such as carnations, chrysanthemums, gerbera and roses, California growers shifted to species that can’t be grown in the cool upland valleys of the Andes.

Longtime California growers switched to Continental’s specialty — the “supporting cast” of greenery in traditional bouquets including ferns, eucalyptus and Israeli ruscus, as well as Christmas trees and holly. That stock can be sustained through the shutdown. Eufloria’s roses, likewise, can survive. But they all have to be nourished, pruned and protected from weather and insects.

“As long as we irrigate and we do pest control, they’re still in good shape for sales when this opens up,” Mellano said. “Probably 35% of our crop mix are annual crops, and those have to be picked when they’re ready, within days, or else they’re lost.”

Among the victims are the ranunculus that carpet the Flower Fields near the San Diego Freeway in Carlsbad — a working farm that also is an important agritourism destination. It closed on March 17, two weeks into its season.

“We are absolutely dependent on the partnership between both tourists and cut flowers in order to make that work,” Mellano said of the Carlsbad farm. “And this year, all of our orders for the ranunculus got canceled by the supermarkets. And the tourism was shut down due to social distancing requirements.”

Only a small portion of the fields will survive in hopes that social distancing rules will relax before summer. Then, people might again be able to go out and smell the flowers, and maybe even buy some.

Food prices surging

Erin Hooley/Chicago Tribune/TNS

Key food prices are surging after virus upends supply chains.

12 | 2020 Ag Journal - Spring

Key foods more expensive after virus upends supply chains

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s the coronavirus pandemic penetrates more deeply into global supply chains, prices for key staples are starting to soar in some parts of the world.

Rice and wheat — crops that account for about a third of the world’s calories — have been making

rapid climbs in spot and futures markets. For countries that rely on imports, this is creating an added financial burden just as the pandemic shatters their economies and erodes their purchasing power. In Nigeria, for example, the cost of rice in retail markets soared by more than 30% in the last four days of March alone.

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Food prices Continued from Page 13 It’s unclear what the biggest drivers were for the retail prices, whether it was a trickle-down effect from grain futures or local logistical choke points or panic buying, or a combination.

What is clear is that, while the world isn’t about to run out of food anytime soon, anxiety over policy makers’ ability to deliver it to the right place at the right time and at the right price is mounting.

“Without the coronavirus, there would not be any problem whatsoever,” said Stefan Vogel, head of agricultural commodity research at Rabobank International. “People are getting worried about the supply chain.”

Most price measures in the broader economy at the moment are moving things in a different direction. There are concerns over deflation as the pandemic shutters businesses, sparks unemployment and unravels the oil market. In fact, a gauge of global food costs fell sharply last month, primarily a ripple effect from the energy plunge which cripples demand for crops like sugar that get turned into biofuels.

However, food prices don’t move uniformly

around the world. Even within that broader drop, some critical staples were outliers. Rice posted a third straight monthly increase.

While global grain inventories have been plentiful for several years, the response to the virus is unleashing ripple effects making it harder for staples to get where they’re needed and helping drive the price gains. That’s happening at the same time that demand has spiked with people loading their pantries while they stay home as much as possible.

Adding to the pressure, countries including Russia, Kazakhstan and Vietnam are moving to secure domestic supply by restricting exports that the world depends on.

The result? Export prices for rice from Thailand, the world’s second-biggest shipper, are at a six-year high. Wheat futures in Chicago, the global benchmark, shot up more than 8% in March, while Canadian durum, the type of grain used in pasta and couscous, is at the highest since August 2017.

There are also signs that price gains could be making their way to consumers for some foods in

the U.S. Wholesale egg prices rose to a record as grocers boosted orders by as much as six times normal volumes. Beef also surged, though some of the gains have eased in the last week.

Wheat and rice are the world’s most consumed food crops. Staple-crop prices have a long history of fueling political instability. During the spikes of 2011 and 2008, there were food riots in more than 30 nations across Africa, Asia and the Middle East.

COULD BE TEMPORARY

To be clear, it’s likely the supply disruptions could prove temporary. And that will probably mean that wheat and rice will stabilize. In the last several years, food costs have been relatively benign thanks to plentiful supplies. Global rice and wheat reserves are both projected at all-time highs, according to the U.S. Department of Agriculture.

But in the meantime, higher prices seen in recent weeks could hit countries that are more sensitive to fluctuations. That’s especially true for nations where food makes up a bigger part

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of overall household budgets, and it puts the world’s most vulnerable in further risk. Virusrelated effects are also exacerbating price gains where food inflation was already an issue.

And it’s not just staple crops rising. Prices of fruit and vegetables, essential in providing nutrition, are also going up in many parts of the world.

“Within countries there are going to be a lot of people who currently can’t make money,” said Rami Zurayk, a professor at the American University of Beirut specializing in food security.

“If their incomes decline, the quality and quantity of the food is going to be declining, especially if this matched by an increase in price.”

In Nigeria, stay-at-home orders from state governments have sparked panic buying. Snarled transportation means fewer goods are getting to markets and grocery stores, and inventories are depleting, said Saudat Salami, who owns an online food retailer in Lagos. Some traders in the food markets where she get supplies have also been afraid to stay in operation as the virus spreads, she said.

Rikotu Isah, a rice farmer from Kebbi, the country’s largest producing state, said there haven’t been significant problems with this year’s crop yet, since the harvest just started.

“But if restrictions on movement persist and we can’t transport our produce to the market, there will likely be a shortage in the market that will affect prices,” he said.

Governments are working overtime to keep prices stable and inflation under wraps.

Algeria, Turkey and Tunisia have already stepped up their wheat purchases in recent weeks to secure supplies. Egypt and Saudi Arabia have said they will be boosting grain reserves.

The Philippines is allocating more than $600 million for food sufficiency efforts and plans to buy 300,000 tons of rice.

Not everyone expects that government intervention can keep things under control, though.

Lalatendu Rath runs a small grocery store in the eastern Indian state of Odisha. He shut his shop for safety reasons as cases mount in the nation. Local authorities are controlling prices for essential commodities including food, but he has bought about 50 kilograms (110 pounds) of potatoes, or about three months worth of his household’s needs.

“There is no guarantee if prices of staples will remain stable,” he said. “It’s better to buy a little more than the normal requirement, as we have children in the family to feed.”

Overall food prices are still well below the peaks from 2008 and 2011 amid the big stock-

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piles. The oil slump should also help keep costs down for farmers, which tends to put a lid on crop prices.

But food-importing nations are also up against a surging U.S. dollar, which makes commodities more expensive for importers. The dollar is the most expensive ever against the Algerian dinar, and near a record against the Saudi riyal and Indonesian rupiah.

Climate change is also a major factor in the outlook. Drought has recently plagued rice crops in Thailand and Vietnam. In Australia, years of dryness have reduced vegetable plantings and sparked some shortages. If this year’s global wheat harvest sees problems, that could prompt more countries to place limits on exports and spark further price gains.

The virus also hasn’t yet spread widely in places with food insecurity, particularly sub-Saharan Africa. If it does, there’s a chance that harvests will shrink, food prices will spike and more people will go hungry, the Agricultural Market Information System, a G20 initiative, said.

“All bets are off the table right now,” said Neil Townsend, an analyst at FarmLink in Winnipeg, Manitoba. “Food security is going to be a big issue.”

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