Better Times For Dairymen Ahead?
Tulare County - Central Valley dairymen have faced stalled permits keeping them from expansion in the past two years, low prices for their milk and the threat of tough new environmental regulations that could make it unprofitable to operate in the future. Add the power crisis and its not a pretty picture.
Now that gloomy scenario may be brightening this summer even as all ag producers face tough times. "I just got my milk check and its up over $3 per cwt from 20 months ago," says Kings County dairyman Tony Oliveira who also is a member of the Kings County Board of Supervisors. Oliveira says the local dairy industry "is ready to take off" in part because of the state's electricity crisis will prompt new dairies in the future to make their own electricity. That will in turn help to clear the air.
California milk prices are based on the price nationwide for key milk based commodities - cheese and butter. Both commodities have been on the rise since last October. Milk is Tulare and Kings counties largest crop - nearly a third of the entire $3 billion value in Tulare County. When the price of milk goes down, as it did last year by nearly $2 per hundredweight in Tulare County, it translates into millions of dollars less to the local economy. Farmers tend to make it up by expansion of production - up a whopping 9% last year despite lower prices.
Few dairymen made any money at the low prices seen last year.
Meanwhile an anticipated increase in demand for milk is being driven by major plant expansions by cheesemakers in both counties that will require a big increase in production beginning next year because of new plants in Tulare, Hanford and Lemoore.
The good news for our dairymen this year has been that per capita consumption of cheese continues to climb, even as there has been a decline of cows in some states - not California. Meanwhile beef prices are up - one of the few other commodities farmers are getting more for these days. At the same time problems in Europe with foot and mouth and mad cow are keeping imports from Europe down and demand for our exports up.
But dairy farmers in Kings, Tulare and Kern counties have been stalled by a lawsuit from environmental groups to keep those jurisdictions from permitting any new dairies for the past few years while legal negotiations stalled.
In Tulare County alone there are 65 permits to build new dairies or expand existing ones pending. Despite the fact that Tulare County completed its own program EIR, no new permits have been issued because the process remains tied up in court.
Now the Dairy Industry Alliance has filed their own environmental report on two Tulare County dairies that supporters believe will hold up in court allowing the log jam on permits to be broken. "We believe the Dairy Alliance documents are rock solid," says dairyman Devin Nunes who just got selected by President Bush to head the state office of the USDA.
The dairy industry has boosted prices for land in Tulare and Kings counties in the past decade even as the Chino area dairy farmers seek to relocate here. But without approval of permits those deals are dead or at least on hold.
Nunes says the dairy industry doesn't have to solve all the air pollution problems it has been accused of causing. "CEQA allows that you must recognize all impacts and follow the Board of Supervisors to make an informed decision on whether the impacts can reasonably be mitigated or not." While the dairy industry has satisfied most observers on water impacts the accusation by the Center for Race, Poverty and the Environment is that methane emissions have not been addressed or mitigated. Methane is a greenhouse gas and contributes to the valley smog problem. But this industry appears to be targeted without regulations in place or research to quantify the problem. The San Joaquin Valley Air Pollution Control District for example does not regulate dairies or cow emissions.
Now Al Oliver - who heads the Tulare office of Artesia Ready-mix and leads the Dairy Industry Alliance - suggests the EIR "will be bullet proof" and that winning a challenge in court after the documents are approved by the Planning Commission late this summer "will have statewide implications." Oliver has a long experience with environmental challenges to the concrete company's plans to mine for rock.
"We figured there are over 300 full time jobs that could have been in place by now out in southern Tulare County where my family farms" if the dairy projects were built, says Devin Nunes.
Tony Oliveira says the icing on the cake will be the fact the state's energy crisis may make it profitable for dairies to retrofit their lagoon operations to capture methane and make their own power. His own dairy has signed up with Colorado-based Microgy to do just that with the company footing the bill to build the plant based on a contract.
He says he has been in Sacramento recently trying to get the state to allow dairies who make their own electricity to be exempt from rules that require they get air credits to offset any pollution. Currently dairy operators who utilize all their power on site are exempt but not those who sell into the grid. Oliveira says if the rule is approved there will be nothing to stop the dairy industry adopt on-site methane use for electricity in a big way. "There is at least 100 megawatts in Kings County alone," he believes. Oliveira says a new bill pushed by Senator Costa (SB5X) will offer $10 million of research to jump start this industry and that he expects at least 50 dairies in Kings County and perhaps 100 in Tulare County to adopt the technology.
"I know of new dairies on the drawing board that will send all their manure through a digester not just producing electricity and cutting back on air emissions but utilizing about half the water of a normal dairy," he says.
The technology pays off not just in environmental approvals and offsetting power costs but in cooler cows that increase milk production. "Cooler cows produce one third more milk." He believes that new dairies will benefit with the technology in the future ending the complaints by most environmental groups that the industry pollutes the air. Adoption of the technology could mean dairymen will be able to reduce the size of lagoons to hold waste water because of greater efficiency. Most manure is spread on land to improve fertility.
Ag producers these days have back-up generators now, says Oliveira and if "they were all turned on just when the grid was about to black out they could light every home in our area" he believes.
Tulare county supervisor Steve Worthley says with all the new generators that have been set up in the past few months and all the stand by generators now in place, the threat of huge summer blackouts in the valley may be like the Y2K scare that turned out to be no more than that. He believes the thousands of backup generators and new permanent power in place could save the grid from collapsing. He says that those who worry about the temporary emissions from the plant from diesel generators - and long term health problems - ought to consider the loss of a cold storage's food supply or an elderly person who dies from heat exhaustion. Worthley attended a grand opening of a new cold storage plant recently in London (near Dinuba). The plant was equipped with a 3 megawatt stand by generator. Other companies have installed state-of-the-art generators like Tipton's California Dairies and Land O'Lakes after concerns about dumping milk. Add up all these megawatts and we can survive this summer, he hopes.
The impact on our area include new processors who have been on hold because of uncertainty over the future milk supply but more immediately on the power crisis affecting what is obviously a perishable product. It could likely be that breaking the log jam on permits and power will translate into millions of dollars of new investment by companies who want to be in the nation's number one dairy producing region but have been scared off recently.
Just in the city of Tulare alone most of its industrial jobs are based on the health of the dairy industry from Haagen Dazs to Land O'Lakes, the new CIP cheese and whey plant under construction and US Cold Storage who hopes to build a new industrial park. The later company has been on hold on a 50 acre food related industrial park, a plan expected to finally move forward in a few weeks.
The Chamber of Commerce is banking on building a new speciality cheese plant. At the Ag Expo the health of the animal industry is key to millions in plans to build a tourist related exposition over the next decade on what is even today just an alfalfa field adjacent Highway 99. That's why the issue of making milk isn't just a discussion that interests a few farmers.
The so-called multiplier effect in the dairy industry is alive and well in the central valley with all the companies that supply the dairymen to all the companies that haul it off, dry it or process it into food for the world. At a 3 to 1 multiplier a $1 billion milk crop in Tulare County turns into three times that every year.
Visalia - Kaweah Delta will expand its emergency room next year adding six beds to the compliment of 21 bed spaces available today. The move comes after a census growth in the Visalia hospital's ER went from about 40,000 visits in 1998 to an expected 57,400 anticipated this year. A hospital projection suggests the demand will rise to 86,000 visits by 2005 but also concludes that this modest expansion can handle the demand over the next ten years, says administrator Lindsay Mann.
The expansion will take place under the same roofline creating a new "fast track" care area designed to handle minor conditions that might be taken care of quickly leaving the remaining ER for more serious cases.
Observers believe that emergency room visits skyrocketed in the last few years because the number of active emergency rooms was cut with the closure of a number of local hospitals. It was just a few years ago that there were eight area hospitals with active ERs but now that number is half that.
Meanwhile the expansion in community clinics in Tulare County - now over 20 - provide an alternative location for urgent care cases that before were visiting the emergency rooms. With the likelihood that remaining hospitals will continue to serve including Dinuba, it is likely there will be no more service reductions for people who need an bonafide emergency visit.
To meet demand Mann says the hospital will spend some $1.1 million and open the expanded facility by July 2002. Mann says any plan that might relocate the main hospital wouldn't be impacted by this investment meant to serve the community downtown for at least the next ten years.
Visalia - A stunning array of separate medical projects are in the study mode this month - potential joint ventures teaming Kaweah Delta District Hospital with Tulare District, Hanford Community and potentially the Dr. Billys led surgical group on four separate multi million projects. The projects include:
Regional Heart Institute. Tulare District Hospital, Hanford Community Hospital and KDDH would build "a new wing of the hospital" says KDDH administrator Lindsay Mann, a multi story building with its own separate identity jutting north to Acequia next to Taco Bell. Mann says the current thinking on planning the wing is to build a new parking garage across West at Willow on land the hospital owns there.
Sequoia Regional Cancer Center. Is a joint venture with Hanford Community Medical Center and KDDH that would have two campuses. One would be the Akers/198 area and another next to the Hanford Mall on land owned there by Hanford Community. Lindsay Mann says a separate Imaging Center would also be built.
Surgical Hospital. Lindsay Mann says the hospital has been in discussion with surgeons who want to build the new proposed Visalia Surgical Hospital led by Dr. Billys in doing a joint venture instead of each building a separate hospital. He says while there is room to build it on the Cypress campus where the hospital has built four separate health related complexes already they would prefer building some 20 acres from Westland Development to build it there leaving 10 acres for retail use. Mann says after discussions with Dr. Billys recently "I believe it is possible a joint venture could be worked out." He says one development that the joint use could offer is space to build new medical office space for the physicians - Orthopedic Associates - Billys group and others seek larger office space than they have Downtown. The group has purchased land across the freeway next to World Wide Sires to build a hospital similar to Fresno Surgical Hospital. It isn't clear if that deal would collapse if the joint venture goes forward.
Mann says that if the joint venture "health plexes" come together the district would continue to strengthen its role downtown and in the Cypress area (Akers).
The hospital is working on a facilities feasibility study for future development. But if all these projects happen it appears both Downtown and Cypress area campuses will remain healthy. "Want to send the message that our expansion plans are not either/or." says Mann who takes over the top job with the district in a few months.
More On Heart Institute
The joint venture project could be launched later this year if a three month study is positive, says Tulare Hospital administrator Bob Montion.
The Heart Institute builds on Kaweah Delta's highly successful cardiac care program that performed over 500 open heart operations last year. "It would take us to the next level," says Kaweah Delta administrator Lindsay Mann.
The multi story building would house new acute care beds, cath labs, and other diagnostic labs. "We're still in the planning stage, and have no dollar or size estimate for now." Although he says it will be larger than 50,000 sq. ft.
Kaweah Delta already has a relationship with skilled heart surgeon group The Starr-Wood Group that have offices next to Kaweah Delta. The group has been working to build the cardiac care program at the Visalia hospital for the past five years allowing Valley patients to get the state's top care locally.
Even though patients would be served at a new Visalia facility adjacent the hospital in Visalia, Montion says Tulare doesn't have enough business to get into open heart surgery and other highly technical procedures but could benefit by having a financial stake in this joint venture.
"We're talking about cutting edge competency, the latest equipment and top personnel" through a single heart program rather than competing smaller programs, says Montion. "You need to do perhaps 400 cases a year of open heart and over 1000 angioplasties to make it work," he says.
Such a joint venture would likely head off private competition from a new heart hospital as has been seen in Bakersfield, suggests Montion. Visalia doesn't want to build a new heart hospital, he believes, because the new institute can utilize all the hospital services, lab, x-ray, imaging services and intensive care that already are Downtown, he says.
Despite the possibility of joining the venture, Montion says Tulare is taking its first steps in building a heart program in Tulare with commitment by the board of $1.4 million to set up the town's first cath lab that can diagnose heart problems.
San Joaquin Valley - The San Joaquin Valley is only about 50 miles wide. But east vs west - there has been a world of difference over strategies to get more water to farmers in the past year resulting in the biggest water war this place has seen in years. Now a trip to Visalia last week may indicate an end to a tense battle over the same water supply.
Westlands Water District general manager Tom Birmingham traveled to Visalia to address the Friant Water Users board in late April suggesting he was heartened by the fact the group made up of some 25 eastside irrigation districts "didn't throw rocks at me." Westlands Water District suffering perennial water shortages has been in the habit of throwing bombshells of their own including the one lobbed last summer when they announced they would mount a legal and political challenge to acquire a big piece of the San Joaquin River water (750,000 acre feet), the source of the Friant Kern canal, that grows the crops on one million acres including Tulare County.
After months of controversy over Westlands filing of a claim with the state for the river water, Birmingham's trip to the Friant board meeting was a dramatic gesture - an apparent resignation of defeat.
Already Westlands claims had isolated Westlands in their quests with most water districts and communities heaping scorn on their plan. Apparently recognizing the grim realities in a short water year in which they will receive as little as 40% of their federal allotment - the district is showing a new persona.
Birmingham suggested to the Friant board that big westside water district "until very recently" opposed a general land retirement in the 600,000 acre district. Only now is Westlands and US Department of Interior working jointly at retiring up to 200,000 acres "to help solve both the drainage issue and water supply problem." Those problems include a US government promise to build drainage to take away salts from the westside land and a perennial water shortage even in wet years. In turn the remaining Westlands farmers would gain a more certain water supply, he said.
However, Birmingham noted that in order for the deal to be finalized with the US government certain agreements had to be in place. They include: no drainage obligations by the US, the lands remain under ownership by Westlands but managed by the US government for wildlife, growers participate voluntarily in the land retirement, the value offered is the value of land if it had water, and most importantly to FWU - Westlands will withdraw their application for water from the San Joaquin. However, they wouldn't do that until the deal is done. In the meantime, Birmingham offered to "go to Sacramento together and suspend" the application for river water at the State Water Resources Control Board.
In addition, a full EIR will be done that will detail the "third party impacts" - the effect on the small westside communities - Mendota, Firebaugh, for example - area business and workers who will lose their jobs.
"I'm already worried about this year," says Nisei Farmers League president Manual Cunha, that "workers won't show up because so much of the land is idle and the fear over the power situation."
Birmingham noted that the grim picture on the westside means that land is being retired now without payment. Over 100,000 acres is fallow and that could grow to 120,000 acres this year he predicts. In addition a separate court case will likely require another 41,000 acres he suggested. To accomplish all this the change in water deliveries will have to hold to the principle of doing no harm to other water districts. Birmingham noted "This will require the support of virtually everyone in the valley."
While Friant users were polite, they didn't endorse Birmingham's notion of suspending of the SJR application preferring they "permanently withdraw it." "We'd like to be allies," noted Birmingham, which is a far cry from the litigious relationship the two westside and eastside districts have had over the years.
"At least for the first time he put out an olive branch," says Metropolitan Water District agent Tim Quinn. "That's a long way from their historical pattern of who can I take hostage next?"
"They need all the good will they can muster because this will require the support of virtually all the congressional delegations in California," says Quinn because of the magnitude of the potential expenditure. MET is a partner with Friant involving a study of use of Friant Kern water in a potential exchange deal. "We pretty much want to stay out of these disputes."
Besides the tension east to west downsizing Westlands has been a long-time goal of some northern California interests who disliked the district taking Trinity River water to irrigate what had formally been a bunch of sagebrush, only to carry flood drain water off that ended up causing wildlife deformities. In the meantime, the fisheries up north had been hurt.
Reducing the volume of federal water south of the Delta was a part the Cal Fed plan that may now come to pass. "I remember when the land was sagebrush," says farmer Tony Oliveira and "now it's a garden but it's going back to sagebrush." Perhaps it is the best plan he admits.
A few days after the meeting in Visalia, Westlands announced they had secured a 160,000 acre ft. water supply from Sacramento farmers that will take their water supply at least to the 50% level at a cost of $150 per acre ft. - more than double what they get federal water for. Birmingham to ld the press that they are acquiring this expensive water supply "because they have not other choice." Friant general manager Dick Moss suggested that Westlands has isolated themselves from other water districts to the point that nobody wanted to do business with them on water transfers. The Sacramento water was secured from rice farmers who will give it up this year.
Friant doesn't want any land retirement deal with the government in Westlands to upset the balance they are seeing on the San Joaquin River including restoration of the river or any shortage that hits the Exchange Contractors. Friant is counting on CalFed to help expand storage on the upper San Joaquin in concert with Metropolitan - a plan that is expected to get thumbs up in Senator Diane Feinstein's CalFed legation being proposed in the next few weeks. The legation authorizes a full feasibility study for more storage on the upper San Joaquin with completion of a feasibility study in 2005. CalFed prospects were given a boost recently when the chair of the House Water and Power Subcommittee Ken Calvert visited the area and heard of need for more eastside storage (also the subject of a Friant-MWD study). That storage could include the possibility of making power too.
Visalia - The first development associated with the West 198 Freeway improvement is open months before the full freeway project will be complete. Last week the Shirk Ave. interchange complete with wildflowers opened for public use all within the access across what was one of the most dangerous corners in town - Shirk and 198.
Now expected to open by the end of summer, the full freeway project is expected to be blessed by a city sponsored civic event - perhaps an old fashioned parade with marching bands to cut the ribbon opening the long awaited freeway project. VUSD bands are ready to lead the parade, says school spokesman Anthony Escobar who says they have not received anything formal as of yet.
CalTrans expects some sort of ceremony up around the Akers interchange where you can get an amazing view of what is arguably the "Entrance to Visalia."
Tulare - Tulare officials are working with an L.A. based development company who is interested in a variety of projects, says Chamber staffer Bob Reynolds. "They've made a number of trips up here," says Reynolds who says talks are preliminary but serious.
Reynolds says talks focused on development potential at sites based on the fact that Tulare has seven freeway offramps. "They were impressed about the potential for tourist related developments," particularly at the Ag Expo site, says Reynolds. They are also working with the Zappas family on building spec buildings at the new K/Paige St. industrial park where a speciality cheese complex has been discussed. He says there also is interest in the Martin property and other lands next to the Tulare Factory Outlet.
Consultant Lynn Dredge, Tulare's former city manager now working on the Ag Expo campus says plans could include building tourist related facilities in the same area where a new horse show complex might be built. Dredge has been working with the Reigned Cow Horse Association for over a year on a plan to site an 8000 seat indoor arena and other facilities along with bringing the Tulare County Fair over to the AgriCenter site. The joint use facility would be a tourist draw encouraging other development like hotels and restaurants to locate nearby. The study to develop the Ag Expo had been put on hold this winter when the Reigned Cow Horse Association lost their executive director. But now Dredge says the feasibility study is ready to gear back up next month.
Already the Ag Expo includes the new Heritage Complex, that includes the Ag Museum, AgTac and the new Ag Commissioner/UC Extension office just now opening. A new sign along the freeway invites visitors to stop by the Ag Expo where in the future there could be even more reasons to stop.
Reynolds says the process is in a due diligence phase with the unnamed developers. He says the list of projects the company has built in California is an impressive one.
Porterville - Porterville apparently dodged a $53 million bullet last week getting the Regional Water Quality Control Board to ease up on their staff suggested rule that would have required the city build hundreds of acres of lined holding ponds and buy thousands of acres of farmland to spread effluent on. Porterville was simply first in line of scores of cities small and large that face an extraordinary expense that valley-wide might be measured in the billions to comply with to keep city wastewater from polluting underground aquifers.
City engineer Harold Hill says the city consultant Dr. Kenneth Schmidt "finally convinced the board" that the city's current practice of percolating wastewater down 40 ft. was a better method than spreading out on ag land. The staff of the state agency has been telling cities up and down the valley they needed to comply with new wastewater rules that require a city keep and hold wastewater in lined ponds until the growing season when it can be let out on farmland with a crop that will take up the nitrogen. The concern of the agency is that nitrates not leach down to groundwater.
But after a power point presentation by Dr. Schmidt the board of the agency seemed to agree that the percolation method with some modifications would work, says Hill and now the cost to the city to comply with new rules will likely be around $8.3 million rather than the anticipated $53 million.
The suggested rule would have tripled sewer costs in this city of 37,000 and even had the potential of halting development if the city could not pay for improvements. Porterville was supported by other local cities including Woodlake, Exeter and Lindsay who also face the prospect of big sewer bill increases for their citizens and no way to pay for the mandated improvements.
Hill pointed out that the tougher rules would cost every man and woman in the San Joaquin Valley $1400 at total cost for some $2 billion, says Hill. But staff of the state agency was unmoved.
Hill explains that the Water Board found violations of city discharge permits because they weren't measuring the entire 40 ft. aquifer but only the upper ten feet of the aquifer. In any case the city takes water below the 40 ft. clay layer under Porterville says Hill. Hill says spreading the effluent out on ag land concentrates nitrates because a large portion of water evaporates. When water is percolated down 40 ft. evaporation doesn't take place and there is a diluting effect.
The proposed permit for Porterville includes further percolation but Hill says the staff has advised them that their direction now is to allow the continued practice of percolating wastewater. Staff made some last minute changes in the permit, says Hill. "I admit that right now there seems to be some ambiguity."
Visalia, too, has a date with the Regional Board to comply with the proposed new wastewater rule that would require over 900 new acres of lined ponds, says Lew Nelson, city engineer. The cost for improvement prompted by staff of the board would cost the city $43 million. A presentation to the Visalia council on the issue is set for May 7.
But now with Porterville's role as "gladiator" in its battle, Hill says "we won a big victory for all the cities."
Hill says they have been told verbally they have at least until December 2003 to comply with new wastewater rules that may still cost the city $5 million more requiring higher sewer rates. "We still need to see it all in writing," he notes.
Still it isn't clear if all cities can meet the high standards mandated in the Tulare Lake Basin Plan or whether as Lew Nelson says "the ducks are going to have thousands of acres of ponds around our cities" to comply with rules meant to protect groundwater.
The above stories are the property of The Valley Voice Newspaper and may not be reprinted without explicit permission in writing from the publisher.
May 2, 2001
