A Merced-based farm irrigation system retailer has made its first foray into the South Valley with a new Tulare storefront. Central Irrigation specializes in agricultural irrigation system design and installation, ranging from full ranch development to simple maintenance. The new Tulare store joins existing retail locations in Merced and Chowchilla.
“Our arrival in the Heart of California, both on the Central Coast and in the Central Valley, will round out nearly four decades of investment in our California Customers and communities,” Southwest Airlines Chief Commercial Officer & Executive Vice President Andrew Watterson said. “While other airlines seem to fall in and out of love with the state, we’re focused on increasing the reach of our low fares and flexible policies in places where we expect them to make a difference.”
“For years residents and businesses throughout Central California have expressed a desire for Southwest service and connectivity to their vast network of destinations and renowned customer service,” said Kevin Meikle, Director of Aviation for Fresno Yosemite International Airport. “Southwest will expand the Central Valley’s air transportation gateway to Yosemite, Sequoia and Kings Canyon National Parks, and we look forward to our new partnership with Southwest and their arrival in the spring.” “We salute Southwest’s bold decision to enter one of the most vibrant and beautiful regions in California, bringing visitors to our sweeping coastline to experience our mild Mediterranean climate and distinctive Spanish-influenced architecture,” said Mayor Cathy Murillo of Santa Barbara. “For our residents, our partnership with Southwest will energize the economic rebound to come in 2021.”
Along with Palm Springs, which received its first Southwest flight on Nov. 19, 2020, the addition of Fresno and Santa Barbara will position Southwest Airlines as an option in 13 California airports before summer 2021, further deepening the carrier’s commitment to the Golden State. Southwest long has carried more air travelers to, from, and within California than any other carrier, a legacy sustained in the most recent reporting of U.S. Department of Transportation data on airline passengers traveling nonstop.
Plans for building up Bakersfield’s small computer software industry recently took a big step forward — despite the COVID-19 pandemic and in a way because of it — with the city’s finalization of a $750,000 contract with Fresno-based tech hub Bitwise Industries. Under a deal struck late last month, the company will begin offering 14-week evening classes, typically taught online two nights per week for three hours at a time, to city residents who have suffered economically as a result of the pandemic.
Some details have not been disclosed, such as how and when Bitwise will begin the classes and how it intends to recruit and screen student candidates. The end goal is to expose 400 people to careers in technology and produce at least 130 new entry-level jobs: 50 in software development and 80 in more general fields of business. “The city of Bakersfield is very excited about this program and we’re looking forward to our continuing partnership with Bitwise Industries,” city spokesman Joseph Conroy said. “We believe this job training program will be a success and a great opportunity for our community.”
Bitwise was already working on an expansion into Bakersfield, having purchased two buildings along 18th Street near the Padre Hotel, when COVID-19 arrived. The pandemic slowed the company’s efforts to rehabilitate the properties and turn them into a sleek local home for its Geekwise computer programming academy, new offices for its Shift3 Technologies software development company and flexible work spaces for lease. When the pandemic hit, Bitwise moved classes online and began offering them to California communities anxious to create new jobs to replace those lost to the lockdown.
Local leaders already familiar with the company’s accomplishments — more than 8,000 Geekwise students served since 2013, many of them poor or otherwise disadvantaged — saw a way to help rebuild and diversify Bakersfield’s economy. The city had received $33.5 million from the state as part of the $2 trillion federal CARES Act. The catch was that the money had to be spent on pandemic recovery efforts and the city had to allocate the funds by the end of 2021. The City Council signed off in mid-November. On Dec. 28, just three days before deadline, Bitwise signed and returned the city’s contract offer.
The company said in a letter to the city in October it would offer a training menu ranging from specific disciplines like quality and assurance testing, web application development and security to more widely applicable skills like sales, product tech support and customer relationship management. “Bitwise is very excited about the job training program with the city of Bakersfield,” spokewoman Katherine Verducci said by email. “Our workforce development programs have impacted the lives of thousands of people in the Central Valley. Partnerships like the one with Bakersfield allow us to reach more people who can benefit from programs like ours.”
E. & J. Gallo Winery announced Tuesday that it has finally completed an $810 million purchase from Constellation Brands Inc. The Modesto-based company got 30-plus labels at various price levels, along with winemaking capacity in the Lodi area and four other locations.
The two industry giants announced in April 2019 that they had agreed on a larger deal, totaling $1.7 billion. The Federal Trade Commission raised concerns about Gallo getting too much control of the sparkling wine, dessert wine and brandy markets. The parties agreed to strike those portions from the transaction in a Dec. 23 draft ruling by the FTC. The revised purchase price was initially $1.1 billion. It dropped again to $810 million “related primarily to changes in inventory for which Constellation has already received the benefit,” a news release from that company said.
Gallo is adding about 350 employees to the 7,000 or so it already had in Modesto and other locations around the world. “The closing of this transaction represents our company’s long-term commitment to the wine industry,” said Ernest J. Gallo, the third-generation CEO, in another release. “We are pleased to welcome the new employees joining the Gallo family.” Gallo is making its first foray into the New York state industry, with Taylor and a few other brands. It also is getting its second winery in Washington state and adding to its holdings in premium and mid-priced California regions.
Gallo, founded in Modesto in 1933 by brothers Ernest and Julio Gallo, was the world’s largest wine producer even before the Constellation purchase. It has made low-priced bottles throughout its history and ventured into premium regions starting in the 1980s. Gallo also markets vodka, gin and other spirits.
The company also has closed on the Nobilo winery in New Zealand in a separate $130 million transaction with Constellation.
The FTC approved the deal with a few anti-trust conditions. Gallo must sell its Sheffield Cellars port and Fairbanks sherry to Precept Wine, based in Seattle. Constellation must retain its Cook’s and J Roget sparkling wines and sell its Paul Masson brandy to Sazerac, based in New Orleans. The large Mission Bell Winery near Madera also was stricken from the deal. Constellation, based in Victor, N.Y., said selling to Gallo would allow it to concentrate on wines priced at more than $11 per bottle. This company also is a key player in the beer and spirits industries.
A 495-unit apartment complex proposed at what is now an outlets-center parking lot has jumped to the front of Tejon Ranch Co.’s line of housing projects. Pending a vote Tuesday by the Kern County Board of Supervisors, the project is expected to house people working at the company’s nearby retail and distribution-center developments — and help recruit new employers to the area.
The 27-acre project would be far smaller than the Lebec-based company’s three other residential projects, including one proposed a few miles away aimed at serving the same blue-collar residents. That project has fallen behind schedule amid legal challenges. A company spokesman declined to provide a construction timetable but said the two-phase project, with 13 residential buildings two to four stories high plus resident amenities and 8,000 square feet of shop space, will be the first of the company’s housing projects to be built. It will serve demand for apartments among 4,000 people already working at the Tejon Ranch Commerce Center, he said, and it will help persuade other employers to move to what is now an area with few housing options.
Bakersfield industrial property broker Wayne Kress said the project will boost the area’s attractiveness among operators of distribution-type centers. “The proximity to labor will only help Tejon attract industrial users,” he said by email. Originally the land proposed for the project was set aside for an expansion of the company’s Outlets at Tejon immediately to the south. The shopping center launched in fall 2016 has at times struggled to keep some of its larger spaces leased. “Given changes in the bricks and mortar retail environment, providing housing opportunities for the workforce is a better and more immediate use of the land,” Tejon Ranch spokesman Barry Zoeller said by email.
Tejon Ranch, an agribusiness and real estate development company, had planned to meet the area’s housing needs with a project called Grapevine. With a master plan of 30 years or more, it is proposed to eventually include 12,000 residential units at the foot of the Grapevine and more than 5 million square feet of commercial space, as well as schools, parks and entertainment. The company said the Grapevine project has been slowed by lawsuits — “an unfortunate reality plaguing California real estate development,” Zoeller wrote. A court hearing set for later this month is expected to determine the adequacy of a supplemental environmental review approved by the Board of Supervisors in December 2019. Zoeller emphasized the very different scales of the two projects. The one going before the board Tuesday, he stated, “will be done very nicely, as is the Tejon way, but it’s not a large project.”
A county staff report said the mix of apartment types could change but that as it stands there would be 297 studio and one-bedroom units, 186 two-bedrooms and 12 three-bedrooms. Stephen Pelz, executive director of the county Housing Authority, said the organization supports such projects because the lack of residential units drives prices up faster than income levels. “It’s encouraging when developers and employers like Tejon Ranch see the big picture and find ways to help meet the housing needs of their workforce,” Pelz wrote in an email. “This will complement the Grapevine project as it is important to have diverse housing types available to a variety of income levels.”
Fresno County businesses, farmers and retailers have weathered a tornado of unpredictable events in 2020. But in 2021, commercial and residential real estate are expected to thrive. Ethan Smith, a broker at Newmark Pearson Commercial in Fresno, specializes in industrial real estate. He says that Fresno’s commercial real estate market is growing. “Industrial has continued to be incredibly active since we sort of shifted gears due to the pandemic,” Smith said. He said demand continues to outpace supply, but it can take a while for pricing to catch up to market changes.
Spring brought concern about the economy, but conditions are not looking nearly as poor as experts first thought. “As things have settled down, we haven’t seen the doom and gloom predictions that people have thought,” Smith said. Industrial firms were deemed essential from the start, which might have helped, and will continue to help in 2021. “Small businesses locally tend to be pretty resilient; we actually still see demand because businesses are growing,” he said.
Some businesses need to lease more space. However, growth can be tough between businesses and banks. “Banks are being more judicious with their lending. However, we’re not seeing the same things during the financial crisis where liquidity just went away,” he said. Low interest rates means cash is cheap at the moment.
The housing market is also booming, and will continue to stay that way in the near future. But Smith and Danyelle Conner, real estate agent at London Properties in Fresno, said it’s because inventory is low. Thus, prices continue to climb. “The market right now continues to be pretty hot,” Conner said. Traditionally November slows down because people like to decorate their homes for the holidays, Conner says. “But as par for the course this year, nothing has been traditional with Covid, and we’re not really seeing a slowdown like we typically would expect right now,” Conner said. “Buyers are also willing to pay the prices sellers are asking, but I have had a few issues with appraisals lately,” Conner said. “Buyers are willing to pay it, but appraisers are not willing to give it the value.” This has potential to make buyers want to come down on the price if appraisers think it’s too high.
Office space has not died off as first predicted. Projects are still under construction because people want to work in a collaborative, in-person setting. Small and medium sized businesses rely on the office because of the lack of accommodation for sophisticated information systems available working from home. “The obituaries that were written about the offices were incredibly premature. And there’s no obituary,” Smith said. Many office workers have been negatively affected by school closures, as was the agriculture industry, which delivers mass amounts of fruit, vegetables and milk to grade schools. Ryan Jacobsen, CEO of Fresno County Farm Bureau, says that Covid will continue to play a role in the 2021 agriculture forecast. “Overall, the commodities definitely are lower than what we’ve seen in the past decade, and a lot of that is attributed to the softer foreign markets for some of the products that are more heavily demanded worldwide,” Jacobsen said. This will play a role in foreign trade in the Covid era looking into 2021. “Central Valley agriculture is very dependent upon foreign trade, and so our hope is that the worldwide economy still demands California produce,” Jacobsen said.
Jacobsen hopes the United States-Mexico-Canada Agreement and U.S.-China Phase 1 trade deal will pay dividends in 2021. Aside from Covid-related differences, water runoff was below average year, so the agriculture industry hopes to have a better water year in 2021 because it means more crops in the ground. In 2021, retail giants like Amazon, Target, and Walmart could change the small business front. “The retail industry already was changing. The pandemic — people staying home — has only accelerated what was already happening,” Smith said. There is a shift as retailers occupy more warehouse space and use their own delivery infrastructure to accommodate consumers quicker, which could spur industrial construction. “The expectation on the customer’s end is not waiting five to seven days for delivery anymore,” Smith said.
The outlook for restaurants is certainly not bright, especially as Fresno County reenters the most restrictive purple tier on the state’s lockdown list. This week, Fresno Mayor-elect Jerry Dyer said on a panel discussion with California mayors that 30-40% of restaurants in Fresno will never open again, reported gvwire.com. Smith says we will continue to see the weeding out of businesses who can’t survive the temporary 30-40% decrease in sales until the economy levels out, which may occur in summer 2021. But online retailers born during the pandemic also see the value of operating a brick-and-mortar. Nicole Zieba, Reedley city manager, and Alex Henderson, Kingsburg city manager, both remain optimistic about 2021. Reedley has a 90-day operating fund reserve for 2021. And both Kingsburg and Reedley cities show rapid commercial and residential development. For instance, Reedley has been targeting advanced food manufacturing to reported success.
Then there is the incoming T-Mobile call center in Kingsburg, which Henderson says will bring 1,000 jobs to the city. The 100,000 square foot customer experience center is slated for early 2021, after being on hold for the past year.
Beer made from rice grown with less water, rye planted in the off-season and the sale of carbon credits to tech firms are just a few of the changes North American farmers are making as the food industry strives to go green. The changes are enabling some farmers to earn extra money from industry giants like Cargill, Nutrien and Anheuser-Busch. Consumers are pressuring food producers to support farms that use less water and fertilizer, reduce greenhouse gas emissions and use more natural techniques to maintain soil quality.
Investments in sustainability remain a tiny part of overall spending by the agriculture sector, which enjoyed healthy profits in 2020. They may help to head off more costly regulations down the road now that Democratic climate advocate Joe Biden was elected U.S. president. Some companies, like farm retailer and fertilizer producer Nutrien , are also opening new revenue potential for farmers by monetizing the carbon their fields soak up. The companies say technology is improving measurement and tracking of carbon capture, although some environmental activists question the benefit of such programs and how sequestered greenhouse gas volumes can be verified.
Sustainable techniques farmers are adopting include refraining from tilling soil at times to preserve carbon. Some are adding an off-season cover crop of rye or grass to restore soil nutrients instead of applying heavy fertilizer loads over the winter that can contaminate local water supplies. A study conducted by agriculture technology company Indigo Ag estimated that if U.S. corn, soy and wheat farmers employed no-till and cover crops on 15% of fields, they would generate an additional $600 million by reducing costs, bolstering soil productivity or selling carbon credits.
Indigo has a partnership with brewer Anheuser-Busch Inbev NV, which plans to buy 2.6 million bushels of rice this year grown with less water and nitrogen fertilizer than conventional rice. Anheuser-Busch said that is up from 2.2 million bushels last year and accounts for 10% of its U.S. rice supplies.
Bill Jones, the brewer’s manager of raw materials, said farmers voluntarily growing rice with a lower environmental impact along the sensitive Mississippi River would be less disruptive to supplies than having local authorities require such practices by legislating changes to water and nitrogen use. “We look at supply chain security. I see this gaining traction,” he said, noting that Minnesota and other U.S. states and conservation districts worried about polluting the Mississippi are already introducing limits on how much manure farmers can spread on fields. Arkansas farmer Carson Stewart used the program for the first time this year, earmarking his entire 340-acre rice crop to Anheuser-Busch. Depending on milling quality, his rice may earn up to $1.50 a bushel more than conventional rice, a premium of about 27%, he said.
Worms are helping a Valley winery on its path to becoming more green. Olympic-sized swimming pools at O’Neill Winery are actually beds filled with worms helping the company become greener. “Our technology at BioFiltro, what it is is the star of the show is the worm. Ultimately, the worms are known as an ecosystem or environmental engineers,” said Mai Ann Healy, BioFiltro spokesperson.
BioFiltro, an international company, was able to go through Fresno State’s Valley Ventures program that focuses on water, engineering and technology businesses. The worms are known for converting waste or organic matter. Water is spread across the worm beds and goes through levels of wood chips, river rocks, drainage cells and exit pipes. “So within four hours, our worms are getting fed, getting full and also producing more microbes and bacteria that’s furthering helping us reduce and convert waste into beneficial byproducts,” Healy said. The technology allows the company to take about 80 million gallons of processed water and clean it.
O’Neill Winery is the seventh-largest winery in California. They produce wines and spirits sold around the United States. “So what we are trying to do is provide a sustainable process so that we can have a facility that is environmentally stewards, that is reducing our carbon footprint, reducing/minimizing our waste,” said Phil Castro, senior director of winery operations. O’Neill said they’ve taken steps to be more green with solar energy and the BioFilitro system. They’re able to save water and use that for crop irrigation and reduce the amount of water they use. “So we can ensure for generations to come that there’s water available to continue the great process of agriculture,” Castro said. A sustainable process and technology thriving here in the Valley.
The former Kmart on Wilson Road is slated to become an Amazon distribution hub and the e-commerce giant’s second warehouse development in Kern County. City records show a 123,000-square-foot warehouse proposed at the site would receive and sort six truckloads of consumer goods per day. Products would then be loaded onto 20 delivery vans and shipped out in staggered departure times to avoid causing congestion.
Amazon has been identified as the operator, according to a representative of one of the small businesses ordered by the property’s owner to vacate the site to make room for the new project. An Amazon spokeswoman would not confirm or deny the project. She said by email the company is “constantly exploring new locations and weighing a variety of factors when deciding where to develop sites to best serve customers.”
The property’s owner did not return calls requesting comment Monday. Neither did the project’s applicant at Irvine real estate developer Greenlaw Partners. The city’s Board of Zoning Adjustment in September approved a conditional-use permit to convert the existing, 50-year-old building into a distribution warehouse. Nowhere in materials filed with the city is Amazon mentioned, and a city official said the operator’s name had not been disclosed.
Amazon was similarly stealthy when it was in early stages of developing the much larger “fulfillment center” the Seattle-based company recently opened just north of Meadows Field Airport. In that case, county officials considering the project were unaware the nation’s most valuable retailer was behind it. A majority of the property’s 128,150-square-foot footprint along Wilson Road will remain in place, according to paperwork filed with the city. But it says the shopping center’s eastern portion will be bulldozed to accommodate driving access and parking. The demolition is expected to take out several small businesses operating on the property, including the Golden Ox Diner and a small store owned by the father of Miguel Munoz, who said he was told by the landlord that Amazon had purchased the entire property.
County records give no indication Amazon has bought the center. They show the former Kmart, which closed in early 2017, was purchased in May 2018 by investor Balbir Singh. He sold it in March 2019 to Big J Investment LLC, which is at least partly owned by Singh. County property records show that eight months later Big J sold or transferred the property to itself or a company of the same name. Munoz said his father’s lease doesn’t expire until April but that they have been told to vacate by January. He said the final deadline to move out has changed a few times. A representative of the city of Bakersfield said its Planning Division has not received a project timetable from the property owner or the applicant, Greenlaw.
The warehouse can only improve what has become a blighted property, said Bakersfield real estate professional Frank St. Clair, whose company owns a 257-unit apartment building directly north of the empty Kmart space. “We’re happy to see it go,” he said, adding that transients hanging out at the shopping center sometimes jump a fence onto his company’s property. Singh originally planned to develop an independent supermarket on the site of the former Kmart and the Big Lots next door. His business partners said there was also going to be a banquet hall, a gym and a Dairy Queen at the shopping center. Those plans appear to have been changed.
Delays involving coronavirus pushed the publishing of Central Valley crop reports back this year. While farm receipts from 2018 to 2019 show an almost unchanging total, beneath the surface, shifts in dominant crops have begun to occur as growers face labor shortages and higher water demand. Cumulatively, ag commissioners across Fresno, Tulare, Kings and Madera counties report gross values in 2019 equaling $19.41 billion, down from $19.45 billion in 2018.
Almonds have been the top crop for several years in Fresno County, but in other counties, they are still coming into their own. In Tulare County, almonds ranked No. 6, up from No. 8 the year before. The nut grossed $426 million in 2019, up from $311 million. Acreage also increased, up 11,000 acres from 2018 to 78,300 acres. Growers have been fearing a price drop as acreage continues to grow, said Roland Fumasi, North American Regional Head for RaboResearch Food & Agribusiness in a previous interview. Supply continues to grow, setting shipment records. Another record year is predicted for the crop, with estimates ranging at 3 billion pounds being produced. Lower prices means some California crops can better compete abroad against other producers, but the United States produces 80% of almonds worldwide. Lower prices don’t give California growers an edge like they should. However, lower prices means more people can afford the nut. Because of lower pricing and strong demand, shipments have been robust, Fumasi said.
Almonds averaged $4,942 a ton across the four counties, according to the crop reports in 2019. Prices in 2018 averaged $4,664 a ton. Decreases in wine acreage lead a retreat in grapes across the Central Valley. In Fresno County, raisin and table grape acreage had slight increases. Grapes used to consistently hold the top spot over the years, competing with citrus. Of late, vineyards have bequeathed that title to less labor-intensive crops such as almonds. Table grapes have seen a rise over the past few years, according to Ian LeMay, president of the California Fresh Fruit Association. There has been a shift in varieties for sweeter grapes, he said.
The industry still relies on human hands and labor represents the biggest issue, followed by water. Bunches of grapes are still picked by hand, then sent down the rows in wheelbarrows where they’re packed. Even in the off-season, vines need to be thinned and prepped. Forty percent of table grapes go overseas and foreign markets view California grapes as “premium,” said LeMay. So while labor demands have put pressure on getting higher prices, that view of quality coming from the Central Valley hasn’t affected the fruit’s ability to compete internationally “yet,” said LeMay.
Grapes grossed $2.07 billion, down from $2.27 billion in 2018. Acreage increased in Tulare County to 53,680 acres from 51,950 acres in 2018. Acreage decreased in Fresno County to 164,549 acres from 168,038 in 2018. Over the last few years, citrus has struggled, said Casey Creamer, president of California Citrus Mutual. Larger volume crops coupled with trade disputes have caused problems all around for citrus growers. “When one is out of whack, it creates a real problem in the industry,” said Creamer. Exports represent 30% of the market for citrus. Oranges, both navel and Valencia, grossed $1.17 billion, up from $762 million, according to crop reports. Creamer says 2020 has cause for growers to be more optimistic about citrus.
The loss of restaurant purchasing has put lemons at a loss, but domestic demand for citrus, especially in the face of a pandemic, has raised pricing for oranges and mandarins. The upcoming winter crop for navels looks like the fruit will have good size and quality, Creamer said. It is a little too early to tell how foreign markets will be for the upcoming crop, but he anticipates domestic demand to continue to be strong.
A phase-one agreement in trade deals between the U.S. and China in February dropped tariffs on citrus to 35% from 75%. The fact that the development occurred a month before the pandemic stymied any potential boon growers could have experienced from the negotiation. Growers may see a benefit for this season’s harvest, however. Some other notable development occurred in fruits and veggies. Melons did well in 2019 in Fresno County, growing to $194 million from $156 million in 2018. Lettuce leaf more than tripled to $97 million from $31 million. Recorded price per unit in the crop reports almost tripled to $1,350 a ton from $500. Garlic and onions had a tough year with late spring rains, according to Bob Ehn, CEO of the Garlic and Onion Research Advisory Board.
A fungus called garlic rust was prevalent, causing growers to spray three to five times that season. Hail also damaged a lot of fresh market onions. Onions halved to $178 million from $369 million. Garlic dropped to $365 million from $434 million.
2018 was a banner year, however, setting high marks for the crops. 2020 is looking to do the same, said Ehn. The advisory board is looking to stretch its influence into Kern and Madera counties. Critical water issues in west Fresno County could pose a threat into the future, Ehn said. In the past 10 years, that region of Fresno County grows 95% of garlic for the country.
https://thebusinessjournal.com/crop-reports-reveal-new-old-trends-in-valley-agriculture/