From diesel fuel to feed and seeds, rising prices squeeze Sonoma County farmers

On a foggy May morning in Sebastopol, Sue Walker stepped through her family's orchards at Walker Apples, surrounded by glistening apple trees as they were pruned and thinned in the early light.

Standing on farmland with more than 120 years of history growing fruit, she watched as apples without a chance for harvest fell to the ground – knowing she was seeing the season's profits falling to the soil with them.

Walker, like other Sonoma County apple producers, expects a light apple crop this year because of a maelstrom of rising costs, a bad case of blight and an uneven start to the spring growing season. She estimates that the trees will produce "less than half" of their typical yield – which would normally come out to several tons of the fruit, including Gravenstein apples, typically sought by apple-pickers across the Bay Area.

Facing both blight and the growing cost of fuel, Walker said she's left reconsidering several business ventures, including a plan to expand working with several local markets.

"It's killing me right now," she said. "I was thinking about raising the prices on apples this year, but I don't know if it'll even be worth it.

"I don't know what's going to happen – none of us do," Walker said. "We're all fighting the same things."

Many farmers like Walker say they're bracing for an uncertain harvest season, as fuel costs drive price increases across the board and squeeze their ability to break even this season.

Fuel, which has been impacted by the U.S. conflict with Iran, accounts for roughly 15% to 30% of the total cost of food, according to the Independent Grocers Alliance, which includes 7,500 global supermarkets. And high diesel prices have driven up the cost to haul goods, meaning many shippers have added surcharges in response.

Those costs are being passed on to local businesses, including those supplying and moving materials which farmers need, such as feed and fertilizer.

Christian Klier, North Coast Grape Broker at Turrentine Brokerage, said winegrowers are facing both the current costs for deliveries of fertilizer – which is impacted by the war – and, later in summer, to transport local grapes for sales. The surcharge to transport fertilizer has doubled, and he said there's no reason to think that by late July as trucking season begins, the same won't be true on grape transports.

"We could see a double surcharge for grape deliveries as well," Klier said.

At the same time, "Wineries are paying less for grapes and growers are paying more to grow those grapes," he said. "I don't think we've ever seen more headwinds in the wine industry than we've experienced in the last two years."

Livestock producers are already relying more on hay and grain suppliers as the weather warms and grasses dry, leading them to locals like Rocco Cunningham, owner at Integrity Feeds LLC in Petaluma. He cited rising costs for domestic corn, which increased by $100 per ton within the past five months. Fuel prices also helped drive the increase in hay freight costs by $20 to $25 per ton, he said.

As a result, "They're pushing for higher prices when they sell," Cunningham said. "It's the full extra cost added all across the board. Fuel's hitting everybody right now, not just the farmers."

To try to avoid those rising costs, some rely on cutting silage more than once a season to supplement their hay and feed.

Jennifer Beretta of Beretta Family Dairy said despite these measures, the cost of hay has driven up her farm bill alongside rising fuel costs. Facing uncertainty about whether those costs will keep growing, she and other farmers are hedging their bets on whether to hold off on buying feed, or "bite the bullet" and stock up while it's available.

"My fear is, it's just going to go up," she said of the price of hay feed.

Beretta, who spoke from a tractor while mowing her dairy's grasses, said many farmers are also trying to limit mowing pastures to cut fuel costs from operating machinery.

For now, the steady price of organic dairy products has helped her bottom line, cushioning some of the blow from current rising costs.

"We're not making money, but we're paying the bills right now," she said.

Others face environmental impacts as well as financial burdens. Dave Hale, of Hale's Apple Farm, said his apple orchards this year are facing the worst case of fire blight he's seen, which alongside the cost of fuel will hit his pocketbook.

Hale told The Press Democrat that he initially thought the season would bring a "bumper crop" thanks to the rainfall in late winter this year, which drove the trees to blossom and brought "above normal" bee activity.

But then came a dry March – "The early heat wave we had in March is not normal," Hale said. "I have some trees where there's not an apple on them. They didn't set a crop."

Despite the return of rain in April, Hale said his Sebastopol business, which has since 1978 drawn interest in more than 40 fruit varieties, is likely to produce less than half the apples expected.

"It looks like we took a flame-thrower to the trees," Hale said.

Hale is no stranger to downsizing, having reduced his orchards over the years from 90 to 16 acres. But this year is like no other, he said. He estimated he could spend $4,000 on a 500-gallon tank of diesel, which is about as much as he can store before the harvest and marketing season rolls around.

That price tag impacts his ability to afford transporting apples to several of the region's farmers markets, as well as to customers later this season. During the season, his team focuses on direct marketing – transporting apples by truck all over the Bay Area. They also rely on customers coming directly to the farm and local markets, which may happen far less if fuel remains so expensive.

Hale said he worries about potential shortages if conditions continue on the same trajectory.

"If the supply ends, everything would stop," he said. "Without fuel, we can't market. We have to have a strong marketing season."

Others saw prices go up on other supplies. William Lee Higbee, owner of Farm Sinclair in Guerneville, said the cost of chicken feed and seeds has affected his business as he sells eggs and grows various greens, different vegetables and heirloom fruit.

For example, Higbee said he saw eggplant seeds go for $100 for 250 seeds – "That's crazy" he said. To feed his chickens, a 50-pound bag went from $26 to $30 at the local Feed Mill Petaluma, he said.

Despite the impacts of these costs, not everyone has the same concerns about the agricultural outlook. Some are waiting for the June 1 conditions report from the U.S. Department of Agriculture on corn, as the growing season begins. Improving supplies and prices of corn alongside soybeans could ease economic pressure on multiple sectors.

Mike Martini, executive director of Sonoma Alliance for Vineyards & Environment, said despite the costs, winegrowers are remaining optimistic about the year ahead.

"They're still out there doing their jobs," Martini said. He said that, after 45 years of making wine in the valley, "I have never seen two years be the same.

"Every year is different. You have to be as flexible and positive as you can be."

Others said the recent warm weather has been favorable for their production and helped offset the rising costs of business.

Dry Creek Peach & Produce co-owner Brian Sullivan, who produces about 30 varieties of organically grown peaches in Healdsburg, said the warm, dry March was a boon for his fruit trees: "We're already harvesting."

"The weather's good, and that's really what matters," Sullivan said. "It's the earliest it's been in a while since we harvested this early."

Like most, Sullivan said his main cost has been buying fuel in order to drive his peaches to market. He currently spends about $135 for about two weeks of gas – amounting to at least a 25% increase, he said.

Despite the cost, Sullivan was also optimistic about the season.

"I think it'll be better than it's been," he said. "We've replanted a lot of trees. We got as good a fruit set as we could get."

Staff Writer Natalie Hanson reports on business and agriculture for The Press Democrat. She can be reached at natalie.hanson@pressdemocrat.com or at 619-665-5887.

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