Here’s more proof that some basic, fundamental changes are taking place in California regarding produce trucking. The two most cited reasons are excessive regulations – and the drought. This deals with the drought.
Many folks recalled not too many years ago when it was a rite of spring that truck rates would go crazy in California. In particular, the rates would be lowest the first part of the week, but might increase 30 to 50 percent by the end of the week as truck supplies were depleted. While some of the reasoning can be placed on long term negotiated rates (for a year, or at least a shipping season), it is suspected that less production or volume is coming out of California while Mexico and Canada are increasing. (Also, see the interview with Kenny Lund of the Allen Lund Company, from June 4th).
More California crop acreage is being removed from production in 2015, according to the California Department of Agriculture.
At 564,000 acres, fallowing will be up 33% over last year as growers cope with the state’s fourth year of drought, according to the preliminary estimate by University of California, Davis researchers.
They compared this year’s drought effects to years of average water supply. Surface water is even scarcer in 2015 than last year.
Growers are forecast to pump 6.2 million acre-feet of groundwater to partially make up for an 8.7 million shortage. The added pumping is projected to cost $595 million. When pumping costs, job losses, livestock, dairy and other factors are added in, the state’s agricultural industry anticipates drought losses of $2.7 billion.
The estimate pegs direct job losses at 8,560 full- and part-time jobs. But when spillover effects and increased pumping costs are factored in, total losses are closer to 18,600. The loss in irrigated crop revenues statewide for vegetables is estimated at $107.7 million, and for orchard and vines at $82.8 million.
If the California drought continues, the consequences for produce trucking, consumers and agriculture will become even more severe.
Salinas Valley vegetables – grossing about $5100 to Chicago.
San Joaquin Valley fruit and vegetables – grossing about $7800 to New York City.