Urban Water Institute
Annual Water Policy Conference
Ken Melban
Director of Issues Management
California Avocado Commission
Hilton Mission Bay Resort
August 24, 2012
California Avocado Commission
Role
• California Avocado Commission is a non-profit,
public agency that provides marketing and promotional
support for the industry's 5,000+ growers
• The Commission also provides advocacy and support on
issues involving labor, water, production, trade, pest
protection, environmental stewardship, and food safety
Mission
• To maximize grower returns by
maintaining premium brand
for California Avocados
grower sustainability
positioning
and improving
Commission Structure
• 29 member Board of Directors
-
20 growers, 8 packers, 1 public member
• 13 member staff
• Headquarters located in Irvine, CA
• Includes a Southern California
Agricultural Water Team to assist
farmers in addressing issues impacting
the cost, availability and regulation of
agricultural water
History of Ag in Southern California
• Agriculture has been part of the
southern California’s identity since
the beginning
• Objective of Ag water sales shed demand before urban
rationing while generating
additional revenue
• Ag imported water supply
programs w/MWD since 1958
Southern California Ag Today
• Agriculture and related businesses
contribute $40B to southern
California economy
• San Diego, Riverside, & Ventura
counties ranked among top 10 Ag
counties in CA*
• Average value of farm products
sold per acre in southern California
exceeds almost all other regions
nationwide
• Ag generates about 450K jobs
* Based on the market value of Ag products sold
Top Ag Commodities in Southern Cal.
Southern California avocados are a $373 million a year crop (2010)
Strawberries
Woody ornamentals
Lettuce
Milk
Avocados
Cattle
Lemons
Foliage plants
Bedding plants
Celery
Cut flowers
Broccoli
0
100
200
300
400
500
600
700
Million Dollars ($1,000,000)
800
900
1,000
Profile of California Avocado Industry
• Season: March – September
• Planted acres by variety:
- 59,341 Hass-like
- 1,835 Non-Hass
• Average grove size: 10-20 acres
• A mature orchard of approximately 110 trees per acre, can
produce as much as 22,000 pounds per acre per year
• Modern orchard may have more than double the number of
trees per acre, but absolute irrigation needs remain
essentially the same, approximately four acre-feet per acre
per year, regardless of tree planting density.
California Avocado Production Areas
• 95% of growers are located within 20 miles of the
southern California coast and are responsible for more
than 90% of all domestic avocado production
• Approximately
70% of
California
avocado
production
within the MWD
service area
U.S. Market Overview
Per Capita Consumption
• In the U.S. fresh fruit market, domestic per capita
consumption of avocados increased an average 10
percent annually from 1999-2009, the second-fastest
growth rate after blueberries*
• Total consumption has also increased substantially.
In 1980 total consumption was 479 million pounds.
In 2009, that increased to 1.27 billion pounds.
• As of 1980, total per capita consumption was 2.08
pounds. In 2009, that increased to 4.10 pounds per
capita*
* USDA Economic Research Service
U.S. Market Overview
Volume (Million Pounds)
Total Aggregate Supply
* 2011 Data not yet final
Challenges/Opportunities
• Water Pricing and Quality
• Food Safety
• Labor Availability and Cost
• Industry Modernization
– High density plantings
– Managed tree height
– Salt-tolerant varieties
• Environmental Benefits
– Cap and Trade/Carbon Credits
Breakdown of Avocado Production Costs
• Affordable/Reliable/Quality Water is Critical to a
Healthy Ag Economy
Pollination
2%
Annual Grove Operating Cost
Irrigation
74%
Fertilizer
3%
Pruning
10%
Erosion/Weed/
Pest Control
11%
Comparison of Ag Water Rates
• Agriculture Is Faced
With Crushing Rate
Increases
- 222% in 20 years
Historic/Projected MWD
Treated Ag Rates
$1,000
$800
$600
$400
$200
$-
Agency
$/Acre-foot
MWD IAWP UNTREATED (2012)
$537
MWD TIER 1 UNTREATED (2013)
$593
Valley Center Ag Rate
$1,170
Coachella Valley Water District
$29
El Dorado Irrigation District
$43
Imperial Irrigation District
$20
Semitropic Water Storage District
$80
Case Study - Valley Center Water District
• Drop in overall water sales of 42%
• Ag water sales have dropped by 45%
• Productive avocado acreage
dropped by 25 percent between
2005 - 2009
• 667 square acres of dead or dying
avocado trees in abandoned groves
were declared a fire hazard
• 21% drop in Ag water meters
• Layoffs for 12% of staff
Water Quality Challenges
• Water Quality degradation of imported supplies is
damaging production
• Sufficient SWP supplies are crucial to meeting MWD
blend target
Alternative Supply Cost Comparison
• Eyes wide open
Final Thoughts
• Great deal of interest
in a Delta fix
• Number of issues to
work through
• Final capacity could
have significant cost
and reliability impacts
• Delta Fix has great
potential to address
Ag’s long-term needs
• Ag affordability needs to
be considered
Future of Ag
• Ag Water Survey
Question:
“Should regional water agencies
continue to allow farms and
other agricultural producers to
purchase surplus water at a
lower rate, with the
understanding that agricultural
users participating in this
program will be the first to
reduce their water usage in
shortage conditions?”
81% Support, Probably
Support
19% Oppose, Probably Oppose
Thank-you