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Agriculture depends on the snow pack to hold its irrigation water for Spring.  With little snow pack, farmers will have to pump groundwater in the new year.

The La Nina pattern pushes storms to the north of the Central Valley making the Pacific Northwest wetter than ususal and the southwest US drier.  Because of the higher rainfall in the north, southern California depends on flows captured in northern California and pumped through the Delta to the south even more in dry years.  But to complicate matters, the government has mandated more of those flows go to environmental purposes.

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The strength of the dairy industry here even as many other commodities face record low returns is a sign that the industry will continue to grow securing both Tulare and Kings counties as the nation’s dairyshed - a “milk mecca” one observer calls it.

When Leprino Foods ramps up to full production - 9 million lbs of milk a day - at its two sister mozzarella plants they will require the milk from fully 135,000 cows, says Leprino VP Larry Jensen.  That is roughly the number of cows in Kings County.  “We knew there were not many places where the dairy industry is growing fast enough to supply this volume of milk,” says Jensen.

Already Leprino uses something like 5% of the US milk supply to make their tasty low fat cheese.

Indeed the news that the big Denver based privately owned cheese maker would build a new plant here is clear recognition that the south central valley remains the fastest growing dairy region even as much of the nation contracts in milk volume.   Within 10 miles J.G. Boswell is looking to add 50,000 cows out on the old lakebed.

Leprino is the nation’s largest mozzarella maker controlling about 60 percent of the market. Mozzarella itself makes up about half the cheese produced in the state of California.  Jensen says the biggest users of mozzarella by far are pizza makers accounting for about 70% of the mozzarella used.  He says while the central valley cows will make mozzarella, the pizza will be eaten by folks in the east and southeast - Leprino’s largest market where notably the locally generated milk volume is falling.

If the decision to site a new plant in the south valley was clear, the choice of just where in Tulare and Kings counties was not.  The company had been closely monitoring offers from Goshen and Tulare for the project that will be valued at $150 million estimated construction costs.

Former city manager of Tulare Lynn Dredge who was a consultant to the company on the project, says the decision where to locate came down to a family preference.  “I have a feeling James Leprino himself made the decision that could have gone either way.”

Jensen says building another plant in Lemoore “has certain symmetries” that helped with the decision.  First keeping both plants open meant that the management of both plants could be in the same community.  Secondly, the long history with the local community and thirdly the waste water issue - they can scale up both plants through the same treatment plant.

In a news release Jim Leprino, chairman of the board, remarked on the quality of the people in Lemoore and their 14 year operating history at the existing plant.  “They’ve always made us feel welcome and appreciated in the community.”

But the competition between Tulare, Goshen and Lemoore came down to money.  Leprino had announced early last year they were looking for a new site for a plant and over the past months the competition had reportedly come down to Goshen, Tulare and Lemoore as finalists for the mega plant.

“We talked to them a few days before their December 22 announcement.  They thanked us for working with them,” says Jim Brown, Tulare County Planner who helped negotiate for Goshen’s redevelopment district.  “They had told us that Lemoore was coming in $6 million less than Goshen, but we were able to close the gap by $4 million.”  That still left the Goshen proposal $2 million short of matching Lemoore’s bid.

Brown says the cities of Visalia and Goshen worked together to help land the big employer, but in the end some factors including the fact Leprino was already there, the fact it was cheaper to develop sewer capacity at the Lemoore site than pay to have Visalia process the waste and Lemoore has PG&E that may have offered a better deal than SCE here.

But key to the decision that landed Leprino was an offer put forward by Assemblyman Dean Flores to seek public funds to improve the rail link from Goshen west to Lemoore with a public/private partnership.  Flores has the ear of the Governor and is hopeful in the next few days Davis announces support for state monies to do just that.  “The rail line improvement is critical to all shippers along this line,” says Jensen.  The rail line can not support the larger standard rail cars now being used in the industry.  Lemoore city manager Steve Froberg says he has $1 million in redevelopment funds he will kick into the equation and expects the state, private shippers and the railroad (Union Pacific) to help out as well.  Froberg says Lemoore through its redevelopment zone offered $3 million for public infrastructure to Leprino.  Then there is the full Enterprise Zone that Kings County has where Leprino is able to write off $20 million in sales tax.  Tulare County does not have a full enterprise zone, it has BIZ -with less tax benefits for companies.

There is the issue of the water quality.  Like some other communities, Lemoore is in violation of the discharge permit with the California Regional Water Quality Control Board already because of high salts discharged by the sewer system generated out of the Leprino plant.  In a November 18 letter to the city obtained by the Voice, the city was scolded over a number of continuing violations but suggested in the letter by CRWQCB engineer Alexis R. Phillips-Dowell that there was a possibility of “relaxation of the effluent EC limit “because of the general knowledge that the underlying ground water is poor quality.”  They asked the city to submit a plan to reconsider the limit instead of complying with the limit by December 17th, which they did.  Apparently that was good enough for both the water board and for Leprino who announced a few days later.

If there is one guy given credit for making this happen in Lemoore it is Dean Flores who has one of his district offices in Lemoore.  “His hands are all over this project,” says Steve Froberg.  The city manager is “optimistic” that Flores and Davis will deliver funds for the rail, he expects to revitalize economic development all along its path.  The price tag to finish the line just to Lemoore is $6 million and $12 million all the way to Huron.

When you look at what “Visalia doesn’t have in this economic competition is any legislator that resides in Tulare County,” says Visalia city manager Steve Salomon who worked closely with the County on the Leprino deal as well.

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Mineral King - The issue of Mineral King and its future is back on the front burner this week as the County of Tulare offers a proclamation supporting the preservation of cabins in the scenic alpine valley and the Mineral King Preservation Society offers a new twist to the Park Service - public access to the historic cabins.

“We have a meeting with Congressman Radanovich and Parks Superintendent Mike Tollefson January 10th,” says Preservation Society President Don Pinkham.  “We plan to lay out an idea of how a partnership might work in managing Mineral King,” says Pinkham.  Included in the mix for the first time by cabin owners instead of just looking to maintain their personal right to use the old mining cabins might be open to renting them out to the public,” says Pinkham.  “That’s a change in what we’ve seen before,” says NPS spokesperson Bill Tweed.  Private ownership on public lands has been one of the Park Service’s concerns with continuing to allow the private holdings in a national park.  There are nearly 70 cabins in the park in or near Mineral King.  At issue is whether the cabins will be removed in the long term or maintained as a historical resource.

When Mineral King was included in the park in 1978, legislative language precluded the transfer of the cabins special use permits.  By preserving the cabins in an historic district, the Park Service is forced to deal with the fact the cabins might be maintained and not torn down as they have planned in the past.

The Park Service themselves are in the middle of their General Management Plan process for the past year with the latest being its listing of alternatives to be considered as part of the long term plans for Sequoia and Kings Canyon set to be released as soon as next week.  “The partnership idea will be among the alternatives listed,” says Tweed in the case of Mineral King.  In addition, the GMP addresses many other issues in the parks besides the hot Mineral King issue.  The next step in the GMP process will be an environmental impact statement, says Tweed.  Before it’s over the public will know what the “preferred alternatives” for managing the park will be.  The dynamics in the management of the resources has been to protect them as well as allow public access.

Some 82% of the parks are designated as wilderness and the general management plan addresses how those lands will be maintained and yet offer recreational opportunities.  In addition the new plan will address fire issues.
You can log on to the NPS park planning page at http://www.nps.gov/planning

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Tipton - Based in Tipton California Horsepower.com announced an ag based web site debuting January 17 aimed at farmers looking to buy or sell commodities over the Internet.  The new e-commerce portal catering especially to farmers follows the well financed launch of The AgZone.com that will be headquartered in Tulare this month as well.

If the AgZone is high powered with major backing by agribusiness firms, Horsepower.com is not trying to raise capital in the industry but simply wants to be a farmer to farmer connection.  Whichever portal you use - the interesting news is that they both originated out of Tulare County.

If farmers are getting low prices for their commodities these days the impetus to cut costs and cut out the middle man is especially strong. The founders of the new site, Ralph and Diane Friend, say they watched a broker pull up to their ranch and take a 175 ton load of hay 4 miles down the road to a neighbor dairy farmer who needed it.  “If we had an open market of buyers and sellers we both could make out sharing that profit the broker would otherwise get,” says Diane.  It was resold to the neighbor for $25 per ton profit while the transportation costs were about $4 a ton, she figures.  “It illustrated something that we had known for a long time - that farmers have limited control over the marketing of their commodities,” Diane Friend said.

The site has been under research and development for seven years by Tipton farmers Ralph and Diane Friend and their founding shareholder base.

What they hope is it will allow farmers to offer their ag commodities to all potential buyers in an easy-to-use web site.
“This will be the first agribusiness-to-agribusiness e-commerce site built by farmers for farmers,” said Ralph Friend, president of the site’s parent company, Net Horsepower Inc.  “It appears to us that other agricultural sites are designed to help agribusiness firms obtain information, sell goods and offer services to farmers.

“What we’re doing is altogether different.  The greatest need for the national farm and food processing arena is achieving higher sales dollars for little cost, thus improving bottom-line profit for the ultimate risk taker.”

Growers can use the site free of charge until April 15.  After that, monthly subscriptions will be available for $39.95.  It will cost $10 to post commodities for sale and $10 to complete a sale.

Horsepower.com is not an auction site.  Rather, farmers use the information they provide to conduct confidential negotiations in person or by telephone, fax or e-mail.  Horsepower.com will display standard forms and other tools that will help growers document the terms and conditions of transactions.

“This tool is intended to make the ag  and food chain far more efficient than it is today,” said Diane Friend, chairman of the company.  “Instead of farmers having exposure to one to five buyers in a particular location, farmers will be able to offer their products to hundreds if not thousands of potential buyers at one time.”

Dr. Jack Herlihy, a professor of agribusiness at California Polytechnic State University at San Luis Obispo, is a consultant to Horsepower.com.

“It’s all about increasing efficiency within the marketing and distribution of farm commodities,” he said.  “If growers, both large and small, can be more efficient, they stand to make a better profit.”

Net Horsepower Inc. is based in Tipton with general offices in San Luis Obispo where its staff works on software development, marketing, customer service and other functions.  It is supported by venture capital funding from Ridgewood, N.J.-based Ridgewood Capital, which has an office in Palo Alto and an Internet site at Ridgewoodcapital.com.

“It illustrated something that we had known for a long time-that farmers have limited control over the marketing of their commodities,” Diane Friend said.

“I have asked farmer and processors of all sizes in California if they know every one of their end users,” Ralph Friend said.  “After they think about it, the answer is always no.  This is true for the hay farmer selling to the dairyman, or the creamery selling butter to the confectioner.”

Horsepower.com is designed to help growers increase the efficiency of their marketing, help them get closer to the consumer of their product, and ultimately earn a fair and reasonable profit for the high-quality food, fiber and livestock they produce.

“The need is timely, as many producers are exposed to unbelievable risk, and they are operating on their edge of profit or loss,” Diane Friend said.  “It’s a revolutionary approach to crop marketing that could have as much impact on California agriculture as innovations like the laser scraper in the 1970s, drip irrigation in the ‘80s, an biotech in the 1990s.”

Horsepower.com is an enhancement, not a replacement, to the Friend family’s way of life.  They will continue to run their farms in the central San Joaquin Valley, as their families have done for more than 100 years.

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The above stories are the property of The Valley Voice Newspaper and may not be reprinted without explicit permission in writing from the publisher. 

January 5, 2000