PANEL DISCUSSION: Implications of SGMA implementation: Growers’ perspectives

How will sustainable groundwater management play out on the ground?  Will land be fallowed?  Can yields be somehow increased to make up for lost production? Panel of growers give their perspectives

The Sustainable Groundwater Management Act requires the creation of local agencies to develop and implement plans to manage their groundwater basins sustainably within 20 years.  Sustainable groundwater management is defined in the legislation as the ‘management and use of groundwater in a manner that can be maintained during the planning and implementation horizon without causing undesirable results’, which are defined in the legislation as unreasonable depletion of the aquifer, land subsidence, sea water intrusion, degraded water quality, and surface water impacts.

How will sustainable groundwater management play out on the ground?  At the California Irrigation Institute conference held in January, a panel of growers discussed how they see implementation of the Sustainable Groundwater Management Act affecting agricultural production in the Central Valley.

One of the questions that agricultural water users around the state are weighing is the degree to which implementation of SGMA, climate change, market forces, and other regulatory forces such as the Irrigated Lands program may shape how they use water and may drive a fundamental adjustment in ag water use to bring supplies in balance with demands,” began David Miller.  “There are a lot of different perspectives and different scenarios about what could happen.  Today, we’re very fortunate to have three speakers who’ve given a lot of thought to just what the future may hold for different commodities and in different areas.”

On the panel was Dan Howes with Cal Poly Irrigation & Training Center, Jason Pucheu with Maricopa Orchards, and Bob Kelley with Stevinson Corporation.

Does High Evapotranspiration Lead to Highest Yields in Pistachios and Almonds?

PRESENTER: DR. DAN HOWES, Cal Poly Irrigation & Training Center

Dr. Dan Howes is a Senior Irrigation Engineer at Cal Poly San Luis Obispo’s Irrigation Training and Research Center and has been working in irrigation for about 25 years.  The focus of his presentation was to look at answering the question, does high evapotranspiration lead to high yields in almonds and pistachios?

Dr. Howes began by noting that there are problems with water supply, and the data clearly shows that current groundwater use is not sustainable; groundwater levels have dropped, so more water is being consumed than is available.  Another issue is that the populations continues to grow, which is going to require more food, along with changing dietary habits, including increased protein consumption.

The basic traditional thought is that in order to get more yield, we need to have higher consumptive use or evapotranspiration,” he said.  “Number one, I am not the first one to say it.  We can’t conserve our way out of the problem. In the central valley of California, our losses are recycled. On-farm irrigation efficiency isn’t that important in terms of water that’s conservable that can be used for something else because it’s already reused all the way down the line. Which means that we have an ET problem, or evapotranspiration problem. We use more than we have.”

So how do we solve it? We either get more water or we reduce how much we’re consuming. If we reduce how much we’re consuming, does that mean that we are going to lose yield overall? Is that going to be a negative to our economy in the state? Is it going to be a negative to jobs in the state? All the way down the line to the consumer, is it going to cost more for food in the future? Those are kind of the big questions.”

Dr. Howes began by looking at the question, if we want to produce more food for the population in the future, is it going to require more water?  He presented a graph of yield versus ET, noting that the traditional thought is that low ET gives a low yield fairly linearly. “Remember that these are generated through experiments only varying the amount of water. There are differences if it’s a grain or if it’s a fruit that’s harvested off the tree versus a vegetative crop.  It changes depending on when you time the stress and water use. I understand all that, but this is only a 20 minute presentation, so I’m not going to get into all of that.”

If nitrogen and water is factored in, things don’t look as clean, he noted.  “We can get the same yield, but it’s going to require more water if we use less nitrogen or less water if we use more nitrogen, to a certain degree; that’s just one factor,” he said.  “A system that the farmers are dealing with has numerous factors: micronutrients, pruning, plant spacing, soil types, organic matter. With all those factors in play, how is this going to impact our yield and consumptive use relationship?

Dr. Howes and Dr. Burt thought answering the question was so important they did the research paying for it out of their own pockets because they felt it really important and they needed to get a proof of concept to answer the question, can we produce more crop per unit ET? Not applied water, this is evapotranspiration, or how much the plants are actually consuming.

The hypothesis is, if we look at a bunch of fields of almonds and pistachios, that we won’t find a good relationship between ET and yield,” he said.  “That’s a good thing, because it means that we can do stuff, farmers can do things that will improve yield besides just getting higher evapotranspiration, higher consumptive use, and over drafting our groundwater further.”

It’s important because if we can’t conserve our way out of it, which we can’t, and if we don’t get more water supply in, we’re going to have less crop acreage. On the remaining crop acreage, can we consuming about the same amount of water per acre and produce more yield to offset what we’ve lost? That’s what we’re hoping to show in future research beyond what we have here.”

In terms of procedures, they used remote sensing to get actual ET; they also used yield data, as well as tree age, tree spacing, and variety.  He acknowledged it wasn’t a detailed study; they are hoping for further funding to do a more detailed study looking at each field and all the factors that go into it.  The fields studied were in Kern County and Kings County.  Actual evapotranspiration was developed or obtained using remote sensing. They used the METRIC algorithm, modified somewhat, to get monthly spatial evapotranspiration.

He then presented a picture of an almond orchard in Kern County.  He noted there was higher ET in the younger almonds up north, a little lower evapotranspiration on those with bare soils on some fallow ground on the outside, the lowest ET.  They overlaid field boundaries for all the fields and extracted the evapotranspiration from ET raster outputs.  They studied the months April through October because that is the primary evapotranspiration season.

They studied four years, but most of the data he will show will only be three of the years.  They studied 236 fields; the average field size 117 acres, the minimum being about 18 and maximum being 242 acres; a variety of sizes but rather large fields overall. The data being presented will be from 2011 – a non-drought year, and 2013 and 2014, which were drought years.

Different varieties were examined, but Nonpareil was the dominant variety studied. For this evaluation, all the yield from the entire field is lumped into one value in meat pounds per acre, instead of splitting it out by variety.  The almond trees were five years or older; ten years or older for the pistachios.

For the results, Dr. Howes started with one management unit; he noted that these are multiple fields managed by the same person, same tree age, same nutrient management, same pruning, and tree spacing.  “The variables are fairly uniform in this management unit. You can see that there’s a pretty good relationship between evapotranspiration and yield,” he said.  “Now, that’s the last one you’re going to see that looks like that though.  This is our hypothesis because this is all one management unit. The factors that are going into this, most of them are being held fairly constant.

What happens when they’re not?,” he said, presenting another set of results.  “This is what happens. This is the relationship between evapotranspiration and yield for the three years. Overall, almond yields dropped in the drought years, ’13 and ’14, compared to 2011.  This is really interesting. It looks like a shotgun and most scientists out there, R squared, little R squared values give you the shakes. This is what we were looking for. We wanted to show that you could have lower ET and high yields in some cases. In others, you can have high ET and low yields.”

Why are these fields using 35 inches of evapotranspiration and only achieving about 2,000 pounds per acre when these other ones are achieving nearly 5,000 pounds per acre with the same consumptive use? That’s the question that we want to ask.  Ideally, these are all grouped together. High yields across the board, fairly consistent water use, but that’s not what you’re seeing.”

Dr. Howes noted that the drought years show a little bit less.  “I think that’s due to salinity, especially in Kern County,” he said.  “During the drought years, they tend not to leech. That’s where the salinity buildup tends occur. We’ll see differences in east versus west side of the valley.”

They looked to see if it had to do with the age of the trees; maybe the older trees are not producing well, he said, presenting a chart of results from 2011 and 2014; on the left, age of the trees, on the right, trees per acre.  “What this indicates is that it doesn’t really matter the tree age, whether it’s five years or a little over 20 years, it’s about the same yield,” he said.  “Now, past 20 years, they tend to pull them out for a reason; they don’t produce very well. Within these time frames, tree age isn’t having any real effect on yield.  Trees per acre, again, same thing. You can see the vast majority are about 84 trees per acre. In general, there’s no real relationship between trees per acre. You can’t plant more trees and expect to get more yield out of those trees, at least consistently.

He then presented a slide comparing the east side of the valley with the west side.  “The west side of Kern County, these trees are going to be in a state water project, contracted districts. In the drought years, we know what happened with the state water project contract allocations. They also don’t have a usable groundwater supply, at least not as usable as the east side of the valley. They found water, one way or another, but tended not to have as much.  In 2011, we see the west side, the state water contractors, they had pretty high yields compared to the east side. Then it flips in 2013 and ’14. … I think that has to do with the salt buildup. When they’re deficit irrigating, the salinity tends to build up, maybe where they’re pulling the water from, dropping those yields a little bit. 2015 is all kind of evened out, for one reason or another. Again, we don’t know all the answers yet.”

He then presented two graphs, a ranking of the fields by yield only on top and a ranking of yield to ET on the bottom.  The lowest ranking is the worst case: lowest yield or lowest yield to ET ratio.  To the right, higher yields and higher yield per unit of water use.  The different color dots are different years for the same fields. The horizontal axis is individual fields. They’re sorted by the average ranking from lowest to highest in both cases and the blue line is the average ranking.

Why is it interesting? For a lot of these fields, year to year, they don’t have the same ranking,” said Dr. Howes.  “There’s a lot of variability. One year, they’re doing really well, another year they’re not. Some of them, about 10% or 15%, are consistently high performers; they consistently get high yields per unit of evapotranspiration. If you’re a grower, that’s what you want to know. How did they do that? Why? I want to be them.  We know it’s not because of tree age or tree spacing. We don’t know what else it could be.”

With pistachios, there are  bearing versus non-bearing or alternate bearing seasons that occurs; the accounts for the low yields in some cases.  “What’s interesting in talking to farmers, they have a field that’s really stressed, for one reason or another, and it’ll be four years of low bearing and then on year of high bearing; or they have really high producing fields and they may not have alternate bearing cycles or a consistent alternate bearing cycle. What’s going on with the alternate bearing? That’s a whole other question.”

With pistachios, it’s not tree age. They have trees that are over 40 years old that still produce what young trees can produce. I’ve talked to farmers. They say, ‘We don’t know how long they’ll last, but we’re going to find out.’  They’re not going to pull them for a while.”

In conclusion …

To conclude, we met our hypothesis,” Dr. Howes said.  “There’s no clear relationship between yield and ET. That’s good, because it means that there’s a potential to produce more fruit or more nuts per unit of evapotranspiration. We can produce more with the same amount of evapotranspiration that we have now. Which means if we lose yield or if we lose fallow land, lose land production, there’s a potential if we research it and figure out how to make up the difference in yield on the remaining acreage.”

We have a tremendous opportunity here to learn more about what the combination of variables are to maximize the yield,” he continued.  “It’s going to require intensive research, something that hasn’t been done before. Multi-variant research is very rare. When you get beyond two or three individual factors, you very rarely see it, except in climate research, when you’re looking at weather variables. This is more than weather variables. These are what the growing variables are. It’s going to require coordination and investment in order to do this, but there’s a lot of potential out there.   We’re thinking, this is just almonds and pistachios. What about tomatoes, alfalfa, cotton? There’s a lot of other crops out there that the same relationship’s going to hold true.

SGMA IMPLICATIONS: A GROWER’S PERSPECTIVE

PRESENTER: Jason Pucheu, Vice President of Business Affairs for Maricopa Orchards

Jason Pucheu is vice president of business affairs for Maricopa Orchards, a diverse farming operation that grows almonds, pistachios, cherries, citrus, blueberries, and row crops in multiple locations across the San Joaquin Valley.  He assists with the management of water across all farming operations, managing procurement, and working with the entire farming team to optimize profitability.

Jason Pucheu began by noting that he joined the team at Maricopa Orchards about two years ago.  “Historically, most of my professional career has been on the operations sides of business, less so on the policy side of business, and the Sustainable Groundwater Management Act is more on the policy side of the world,” he said.  “My presentation today is going to be more about the practical implications of what SGMA is actually going to mean to farming operations.”

One thing that’s unique about Maricopa Orchards is that given the diversity of where they are located, they have a statewide perspective.  “Not in the Sacramento Valley, but from Los Banos down to the base of the grapevine,” he said.  “Up in the exchange contractor neck of the world, we’re there. Kings River water rights off of Fresno Irrigation District consolidated, we’re there. State water contractors in Kern County, we see that. Then Friant and CVP south of delta, which would be Westlands district. Ultimately, when a decision is made for water management that is good in one area, it often affects us in another. You learn how to balance all aspects.”

From a grower’s perspective, there are two basic goals they are trying to achieve.  “All farmers are trying to produce more with less; that’s evident across the board,” Mr. Pucheu said.  “You’ll see it in yields of tomatoes. You’ll see it in yields of almonds. When I started at Woolf Farming, our average yield for tomatoes were probably in the high 30s. When I left, it was in the high 50s. That was in less than 10 years. When you do that over a broad scale, it’s pretty impressive.”

The other thing when I think about production agricultural in general is you mitigate the risks that you can control,” he continued.  “There are so many elements in farming that are out of your control.  There’s nothing we can do. No one predicted the amount of rainfall we were going to get. You can’t predict frost. You can’t predict hail. You can’t predict when it’s 105 degrees for 30 days straight and the impacts it has on your tomato crop, almond crop, or whatever you’re growing. You mitigate that by controlling the factors that you can control.”

Mr. Pucheu said he will be looking at the impacts of SGMA from a farming operations standpoint.  “One of the first things that I want to point out it that SGMA as a landowner problem, not a water district problem,” he said.  “A water district is responsible for managing and implementing. Often, as you look across the state, you have groundwater sustainability agencies that are matching the borders of your water districts that you farm in or irrigation district, but ultimately, it’s you as a land owner that’s going to be impacted. All they’re doing is trying to roll it out and be the local administrative agency for managing it.”

We must produce more with less,” he said.  “We’ve already touched on that. That’s our goal that we try to do every single year. The difference is that now we have to do it not just with less inputs but less acres. The practical implication is not a matter of if but when acres have to come out of production.”

SGMA in general creates a new risk that is much more difficult to control and to mitigate.  “As an organization, Maricopa Orchards supports groundwater management and eliminating overdraft,” he said. “One of our biggest challenges is there was nothing to address surface water supplies in relation to groundwater management.  Conjunctive use is a balancing use of both surface and groundwater; every farmer is in favor of conjunctive use.  There’s an important part of the equation for conjunctive use to work. You have to have surface water. If you don’t have surface water, you only have groundwater. Ultimately, SGMA didn’t do anything to address surface water supplies.”

All areas they farm in have been impacted, Mr. Pucheu said.  “There were regulations and restrictions on the Delta that prevent water from moving south, that impacts the State Water Project contractors, it impacts Central Valley Project south of Delta contractors, the Westlands Water District. It carried over to the Friant side of the world because exchange contractors needed water from the San Joaquin River, so Friant was impacted. Basically, in 2014, ’15, ’16, everybody was implicated. You couldn’t really escape it. No matter where you were, you had to learn how to manage through it.”

The biggest risk that SGMA brings into play is that a farmer’s primary tool for managing supply volatility, the biggest challenge in farming, is groundwater.   “The statement that the way we got through the historic drought was by groundwater pumping is partially correct. A lot of people pumped a lot of water because it was the only option that they had. Ultimately, groundwater is our primary tool for managing surface supply volatility. In the future, that’s going to be limited. To what extent and how fast, we don’t know.”

He then turned to operational challenges, starting with land development implications, just in general. “The first one is past decisions, and some of this isn’t limited to Maricopa Orchards,” he said.  “If you’re a small farm and you decided to plant everything wall to wall, almonds, pistachios, wine grapes, whatever, in 2013, and the law passed in 2014, you just committed to a long-term development and investment that you may not be able to support. What happens then?  Generally speaking, for those folks, the decision has been made. It’s planted. You’re going to ride it out for as long as you can just knowing at some point you may have to reduce something or, God-willing, heavens continue to open up every year and it stays nice and wet for the next 50.  Unfortunately, California doesn’t really work that way. It’s either feast or famine. It’s either really dry or really wet, and sometimes it’s in the middle.

And then there’s the question of new development.  “You own a piece of ground. Now, what do you do with it? Do you plant it? Do you plant it to grapes? Do you plant it to almonds? Do you plant it to cherries? What do you want to do with it? Ultimately, you’ll know in 10 or 20 years whether or not you made a good decision or not. That’s a tough way to operate a business. It’s only as good as the assumptions that you make. I love information and I love data. I can look at historical allocations. I can look at a lot of different information. None of those will tell you for sure what the next 5, 10, 15, 20 years are going to look like.”

Redevelopment decisions are going to be tougher.  “One of the goals that I’ve always attempted to do is to coordinate redevelopment with the estimated timing of when orchards or vineyards are going to come out,” he said.  “The basis for that is if you can swing it financially and you have the water for the short term, you’re replacing stuff that’s coming out. Let’s pick an almond orchard that’s 22 years old when a new orchard’s going to be four years old or five years old, and you don’t miss a beat in terms of volume and what you’re sending in cash flow for your operation.  Long-term wise, most likely, that strategy will no longer work unless you happen to catch a window where it’s wet and you have enough water to concurrently farm both groups of acres for that period of time. Unfortunately, if it’s an almond or a pistachio, you need three to seven years to get them up and going.”

There are cash flow implications, Mr. Pucheu said.  “With less acres farmed or redeveloped, what are the impacts?” he said.  “You’re going to have less revenue increased costs, a couple things that are going to be the new norm at some point.  Most growers are going to have to get used to carrying open land. The issue with that is you now have open land that you’re no longer farming – You have to support the costs, you have property taxes, you have water district assessments and there are going to be new fees associated with groundwater sustainability agencies. One of the prior panelists was talking about hiring the new executive director and the staff and all that. It all costs money. That’s if the state doesn’t step in. If the state steps in, then they’re going to send you a bill.

There’s going to be both less revenue and increased costs, he said.  “Farming is a business. When we look at farming, it’s, how do we get the best return on our investment? It’s a mentality that, you’ll see this shift more and more. People are approaching it more business-like. The folks that are getting tired of regulation, tired of some of these increased challenges, water situations, they’re either selling or hiring … It’s just something we have to evolve and we have to adapt.

There will be land value implications as well.  “I’ve looked at land values up and down the state,” he said.  “Historically, there’s a lot of land in areas that sell for a lot of money that have no surface water. The implications when all of the sudden you can’t grow anything on it could be swift and harsh. That’ll carry over into the banking world. It’s something for all growers to be aware of. If we can’t support it long-term, what’s going to happen? Flip side of that, if you have good water, good water rights, your value will likely hold or potentially increase.”

A hypothetical example

So acres will most likely come out of production; the question is when and how, Mr. Pucheu said.  “Once the rules are known, we’ll know. One of the things that groundwater sustainability agencies will have to do in their groundwater sustainability plans is basically create a budget, not any different than what you have to do on farms.  I just created a hypothetical example. This particular example was based on Westland’s, which is a south of delta, CVP contractor. It’s a federal contractor.”

In this example, I assumed the farm was 1200 acres.  I did a split of 300 acres of almonds, 150 acres of pistachios, 150 acres of processing tomatoes, and a 150 acres of onions. Then assumed 450 acres fallow or dryland wheat, no water applied. Basically, you come up with just over a third of your acres is permanent planting crops, 25% row crops, and 38% fallow.  I built a budget here; these are just estimates or simple math, but four acre-feet per acre for almonds, three and a half for pistachios, three for tomatoes and onions. Total needs, just over 2600 acre-feet total. That works out to 2.19 acre-feet per acre.”

He started first with water allocation, noting the table showing allocations for the last 11 years.  “2006 was the last 100% allocation. 2011 was our last wet year. The last three years, zero, zero, 5%, unknown for 2017.  … You look at the long-term five year average from 2012 to 2016, that’s 13% allocation. 10-year, 2007 to ’16, 29%. You go to 11 years, let’s throw a wet year in, we’re at 35%. Now, you’re back to the decision. I just bought a ranch. Do I plant it? Do I not plant it? What do I do?

The first thing you have to decide is, what assumption do you want to use? When you look at the historical, feel free to grab a dart and just throw it. It’s probably as good a guess as mine,” he said.  “At a 35% allocation, we’re roughly 1300 acre-feet short. You need the ability to pump one acre-foot per acre. The sustainable yield within Westlands, they’ve currently hired an engineering firm to calculate what that is. When they talk about sustainable yield, you have rainfall, you have rivers or streams, whatever’s coming in, and then you have groundwater applied minus whatever you’re growing. It’s not going to be one acre-foot per acre, so I’m out of luck. It is unknown at this point.”

Let’s take it to the other end of the spectrum,” he said.  “Let’s assume 60% allocation. 0.44 acre-feet per acre is likely what would be needed to pump to support that crop mix. Remember, that was 38% permanent plantings, 25% row crop, and 38% fallow. The question is, when you look at this, are you comfortable planting on a 60% allocation long-term? It’s a tough place to be. I’m not that brave and I’m not playing with my money. It’s somebody else’s money. 60% is probably too great. Basically, what that tells us is that we can’t support this.”

In this example, the almonds can’t be taken out unless they are old, and pistachios live forever, so they’re not going to come out, so the crops that will go unplanted would likely be the tomatoes and onions.  “One of my personal concerns is what implication SGMA will have on the row crop industry. The nature of when groundwater sustainability plans come out and at some point, there are limitations on groundwater pumping, depending on what that looks like; hopefully it’ll flux up, it’ll flux down and give you some flexibility during dry years. What it’s going to give you is, long-term, there’s going to be an average at some point. That’ll vary depending on where you are.”

“If you have trees, grapes, tree fruit, take your pick, and you’re growing row crops, you can no longer pump water to support the row crop. You’re going to have to save that ability to pump to support your trees later on. The practical implications of that is, long-term wise, whether you’re a processing tomato grower, dehy onion, dehy garlic, melon, lettuce, whatever’s growing in the Central Valley, it’s going to be a scramble for acres, potentially.  Who knows how long that’ll take, but that’s a concern I have. The processing tomato world, it’s pretty big in California. It’ll be interesting to see how that plays out, because it’s not on the radar for a lot of folks.”

Practical advice for farmers

Mr. Pucheu then had some practical advice for farmers.  “I have a lot of friends that farm. The first thing that I advise to them is figure out who’s going to control your destiny, who is the groundwater sustainability agency that’s going to represent and form the rules for your area, wherever you are.”

The second one is to participate,” he said.  “You want to be active and participate in providing input for the development of the groundwater sustainability plan. People have to have groundwater sustainability agencies formed by June of this year, 2017. Groundwater sustainability plans have to be submitted to the DWR by 2020. The larger districts are planning on getting that up and going prior to then. This doesn’t mean you have three years to participate. It means you have about three months.

Ultimately, develop an understanding of the implications so you can manage your farms accordingly. It changes. It’s the water world. It changes every day. At least you’ll be in the know and you can make those decisions, because there are a lot of growers that aren’t fully up to speed on what the potential implications could be. I don’t want to paint a bleak picture but it’s one of those things that there is uncertainty. To a certain extent, we can manage through some of that uncertainty. As in any case, there will be some opportunities. People develop business, irrigation schedule, and new techniques.”

To a certain extent, I look at it as we have to figure out how to farm better,” Mr. Pucheu said.  “Ultimately, how we irrigate today is going to have to change in the future. Do we apply the same amount of water because that’s what we’ve always done? If you have to deficit irrigate, when do you do it and how do you apply it? We have to get better at what we’re doing, because the success of our business and our farm depends on it. It’s not any different than it’s always been. Ultimately, we will adapt and we will figure out a way to be successful.”

Thank you.”

BOB KELLEY, General Manager of Stevinson Water District

Bob Kelley began by saying that the rules have been turned upside down subsequent to this drought and the Sustainable Groundwater Management Act, and he’s been asked to talk about it, particularly as it applies to dairy farming and what kind of solutions there may be.

In his presentation, Mr. Kelley said he would be using agriculture statistics from the California Department of Food and Agriculture, from House Representative Devin Nunes’ presentation to his constituents in September of 2016, and also conversations from civil engineers in the San Joaquin Valley. His presentation will focus on the six counties of Merced, Madera, Fresno, Kings, Tulare, and Kern because those six counties produce 72% of all the milk in California, and those counties are experiencing the greatest amount of groundwater overdraft and its associated undesirable impacts.

The California dairy industry is the number one dairy producer in the nation and milk is the number one agricultural income earner among the 400 agricultural commodities produced in California in 2015, he said.  Tulare County alone is over 27% and Tulare, Merced, and Kings counties account for 53%.  “It’s safe to say that if there’s an impact to the south San Joaquin Valley first from the standpoint of fallowing ground from SGMA, one of the first to feel it are going to be the production of milk,” he said.

The dairy industry has benefited greatly from the developments in dairy science, nutritional efficiencies and real-time data collection, he said. Two thirds of the dairy herds today have microchips in the cows’ ears and the managers have real-time information on every bit of data as they look at each cow. They can access such information on each animal’s fertility, nutrition, and production levels. Also, advances in genomic science have made great in roads in the genetic improvement of dairy cows by increasing the pool of superior genetics. The focus on animal comfort has also translated into production strides. The advantage of all this technology at the fingertips of dairy managers is huge.

When the world’s dairy owners want to learn how to increase milk production efficiency in large herds, they come to California,” he said.  “However, these achievements in dairy science have caused dairy herds to become larger. It takes more capital and more sophistication to accomplish these innovations. Regulatory compliance and environmental mitigation practices have also caused dairy operations to increase their land base to be able to mitigate the effects from salt, nitrates, and air quality.

To protect surface waters and groundwater, the regional water quality control board adopted a general order for waste order discharge requirements for dairies in May of 2007.  The general order requires dairies to implement both a waste management plan and a nutrient management plan as well as a monitoring and reporting program.

Dairymen have a lot of environmental compliance requirements that have come down the road,” he said.  “They’ve become more sophisticated in matching the nutrients in the effluent to what is used by the crop.  They’re a resourceful and hard-working group.  They’re too damn good at what they do and have a habit of increasing the size and production in response to whether the price is up or down. Their answer is, ‘Let’s get bigger; let’s produce more milk.’ But the supply side management of milk has never been successful. This has caused the price of milk to be volatile.”

Dairyman have typically responded to adversities by increasing economies of scale of their dairies, which can be seen in the increase in numbers as one moves south in the San Joaquin Valley:  San Joaquin and Stanislaus average in the 800s; Fresno, Kings, Tulare average 1500 cows per dairy; and Kern County averages 3200 cows per dairy.

The response to difficulties for dairies has been to get bigger, but that’s not going to work with SGMA, Mr. Kelley said.  “The sustainable management and the development of a sustainable groundwater plan by 2020 or 2022, depending upon the level of overdraft, is a requirement and it is likely that in the development of these plans, which will be expensive and difficult, there’s going to be a lot of litigation. The path toward achievement of sustainability will be difficult and costly. The achievement of sustainability will happen. The longer it takes, the more difficult it’ll be.”

The important questions are, what will be the effect upon agriculture and how will agriculture respond? Will more surface water be made available to assist in sustainability? Or will less surface water be made available from current supplies due to additional release to the rivers for environmental mitigation?

The management of groundwater has been a bitter pill that the state of California has long refused to address; it’s a political hot potato that’s been kicked down the road for years,” he said.  “Because of inaction, ag land development has continued into areas that historically were never irrigated, areas that are wholly or, in a majority, dependent upon groundwater.  Let’s be honest. The land use decisions on these types of lands are flawed. The development of permanent crops and dairies in these new farmed areas is causing problems. Land subsidence at an unsustainable rate, rapidly falling water tables, deterioration of water quality are among the undesirable impacts.”

The groundwater sustainability agencies are going to have to address this; they are going to have to manage their basins to achieve a sustainable yield of groundwater over a long-term planning horizon, Mr. Kelley said.  “SGMA’s going to have a dramatic effect on future land use decisions. We recognize it. There’s going to be significant fallowing of land to achieve sustainable yield. Economics will dictate what remains in production. It’s anticipated that larger, highly capitalized farming operations will purchase and fallow water right lands and accept this as a cost of doing business. Water will become very expensive and scarce. Water application will become extremely efficient. Larger vertically integrated operations will fund environmental water banks whose role will be the acquisition of lands with water rights and fallow to enable the water bank depositor to keep their land base in production.”

Most likely, field crops and forage crops such as corn and alfalfa will be most likely to be reduced, as permanent, higher-value crops such as grapes, almonds, pistachios, and citrus will be favored, he said.  “The dairy businesses will have to take into consideration the needs for nutrient management on dedicated lands on which they apply effluent. Just fallowing lands due to the lack of available water supply will not mitigate the need to manage their nutrients.  Regulations of nutrient management state that the amount of nitrogen applied is tied to the amount of nitrogen removed by the crop. Simply having acres for application of effluent doesn’t work if there’s no water to grow the crop to remove the nitrogen.  Dairies will have to treat their cropping land base as permanent to remain at a certain cow herd size if current effluent practices continue. Fewer acres for this mitigation required by the general order will mean fewer milking cows.”

One solution could be the transformation of effluent into two parts:  by removing the water and processing the solids and nitrates into a compost, a dry saleable commodity acceptable for agricultural crops and landscaping can be made.  The water removed would need to be minimized and would need treatment to be acceptable for crops, such as a combination of anaerobic digesters, reverse osmosis, ultra-filtration, and solar desalinization, Mr. Kelley said.  “There’s going to be a need for that kind of technology to be developed for the dairies to stay in business in the areas where they’re going to have to fallow land. … Given the economics of scale of these larger dairies, they will and must learn to do something of some kind to mitigate for the loss of nutrient balanced land or go out of business.

The dairymen will also have to purchase outside forage from these SGMA impacted lands; if they don’t have the water to grow corn and alfalfa, they’ll have to buy it out of state and accept it as a cost of doing business and the price of milk will have to rise to support this increase of cost for these dairies, Mr. Kelley said.  “Because of the inability of the dairy industry to introduce supply side controls, there will initially be an attrition of dairies, reducing supply and thereby increasing prices. The short term does not look good for these south San Joaquin dairymen.”

Tied to dairy attrition and related cropping systems will be the impact on the farming industry and the economy of the valley in general, Mr. Kelley pointed out.  “Employment will take a major hit. Dairy construction will stop. Current milk processing facilities will see large vacancies of throughput. Anybody that’s related to the dairy business will be greatly affected. It’s hard to say what exactly the final effect will be, but we all know that agricultural drives the San Joaquin Valley. There won’t be one sector that won’t feel the effect.”

Mr. Kelley did a rough calculation of how big the problem is at the current rate of extraction.  Using numbers from a recent presentation by Congressman Devin Nunes, there is a total 3 MAF of water deficit annually in the San Joaquin Valley, from the Merced sub-basin extending south, he said.  “Now, if you take the average application of water per acre-foot per acre of two and a half, and translate that into how many acres are in danger of retirement, you have 1.2 million acres in danger of retirement. That’s 40%. Pretty scary. I don’t believe that that will be what happens, but that’s just if you run the numbers right now.

Mr. Kelley acknowledged that there’s certainly room for improvement on that number, but what is significant about this is the potential for fallowing of lands to achieve the water balance required by SGMA.  “The pessimistic view shows that within 10 to 20 years, there’s going to be a very, very different looking valley. The dairy industry will first to see the hit. They’re not able to relocate to areas with non-impacted groundwater. They have significant equity, but it’s all tied up in non-liquid assets.”

What will dairymen have to do to address the potential fallowing issue?  “First, they need to realize how serious the problem is,” he said.  “I don’t believe they do; certainly not in our area. I think as you go farther south, I think there’s more awareness.  I think they are at the first level groundwater management;  they’re in the denial stage or putting their heads in the sand hoping for a solution.”

What about other solutions?  What about additional surface water for recharge?  “The challenge with recharge is being close enough to a surface supply that has wet year run-off that would be available for purchase,” Mr. Kelley said.  “For some areas, that’s a big challenge. We don’t have that ability. Infrastructure will need to be built to convey surplus wet year water to recharge areas. In Merced County, dairymen and farmers have installed conveyance under the San Joaquin River to access surface supplies from the Madera Irrigation District.  In Tulare County, the city of Visalia has collaborated with the Tulare Irrigation District whereby Tulare Irrigation District takes tertiary treated water from the city; In wet years, the city gets surface water conveyed from Tulare Irrigation District to their recharge facilities. I believe there’s also projects like this in Fresno County. There’s a need for more of these large collaborative projects and it’s immediate.”

Mr. Kelley pointed to the Kern Water Bank Authority as an important model.  “It must be noted from this model first that there was and there will be a need for large collective effort from many public entities and a collective public will to accomplish these recharge banking projects. Everybody worked to find answers to that and they accepted the increased cost in water as a part of doing business. This was a large group – 20+ active water purveying participants were involved.”

There are also lessons to be learned from the flooding years in 1983 and 1997.   “In ’83, the whole Tulare Lake Basin, some 50,000 acres, was under water.   If you looked out there now, you’d see a lot of permanent crops, so I’m not sure that that would work now, but it was a large recharge in 1983. There was about a million acre-feet in that basin. It’s entirely possible, as Boswell did in ’83, to place large diesel generating pump stations in the Kings, Kaweah, and Tule rivers to pump it directly into the Friant Kern Canal in a wet year and transport those to basins to create large recharge projects.”

Getting a permit from the Water Resources Control Board to recharge is not simple. A permanent water right can take many years for approval, depending upon the previous water rights and the affected lands under that particular river or water course and it’s expensive, Mr. Kelley said.  He noted that there was a temporary permit process that was activated during the drought; it is required to be renewed every 180 days, but it can avoid the CEQA process that the standard permit has if it’s urgent in nature. Either way, there must be no injury to existing water rights and no injury to fish and wildlife.

It’s not an easy task to get the State Water Board’s process for permitting,” he said.  “It’s cumbersome and difficult, but it’s going to have to be done. Maybe it can be facilitated with our legislators. It’s not something that you can just do, and wait for a wet year and do. You’re going to have to start working on it now and expect that, years down the road, you’ll get through the process if you can.”

The Temperance Flat Dam on the San Joaquin is projected to provide a million acre-feet of additional storage,” Mr. Kelley said.  “It would be a great answer to a portion of this San Joaquin Valley groundwater deficit.”

The San Joaquin River settlement in 2008 dedicated 250,000 acre-feet of water from Friant Dam,” he said.  “We’re eight years into it and no one will acknowledge that it’s failed to achieve its goal of reestablishing salmon. The climate has changed. The river is completely encroached in places. It’s too flat for the colder temperature required by the salmon. They’re looking to reestablish the river in a dry flood bypass channel where there’s no existing river wetland habitat. Yet, the Bureau of Reclamation and NMFS have placed salmon in the river system, and before there are any improvements, the salmon are being lifted out of the river a few miles from where they’re raised, hatched. They’re trucked 75 miles to the confluence of the Merced and San Joaquin rivers and released into the ocean where they perish in the canals and sloughs that are connected to Old River.  It’s ill-conceived from the start. It seems to have a mind of its own. Nevertheless, that’s something that is moving right along. You kind of wonder about that whole process.“

Mr. Kelley said the State Water Resource Control Board is now considering to release another 40% of unimpaired flows from existing river storage in the Stanislaus, Tuolumne, and Merced rivers; they will issue their decision later this year. It will directly affect the Merced Basin, making it that much more difficult for the sustainability process, he noted.

In summary, our whole water picture has turned upside down with the recent drought and SGMA,” he said.  “We’re going to have to stop thinking in a, ‘I’ll just protect my water rights to water and forget about my neighbor.’  We have to look at the big picture. Groundwater is a shared right. Every party in the connected aquifer has a shared right to use it. Groundwater is an integral part of our water needs and cannot be thought of as a number one supply, but rather as dictated by the sustainability plan as what’s available to be pumped from the aquifer, or thought of as a use in a water shortage, but not the number one supply.”

We need to accept that there’s going to be fallowing of land,” he continued.  “Working with the balance of the issues, we need to collaboratively work with public and private interests, with Metropolitan and rural users, to make the shortage of this resource equitably and efficiently used.  Our public awareness must change.  We must make it a big part of the public discussion and get public support.  This serious challenge to the future of our state economy and standard of living will directly impact everyone, not just the farmer or the dairymen.  This discussion needs to be placed front and center.

My opinion: we don’t need high speed rail, but we need rather Temperance Flat,” added Mr. Kelley.

Thank you very much.”

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