The Perfect Storm


The Perfect Storm; Grow Local or Grow Hungry?
By Jamie Lee

Most of us who live in the United States have always assumed that our food would be available in abundance at our commercial grocery stores at affordable prices, at least for the past three generations. Most have never spent a thought about what they would do if their basic weekly food staples became unavailable and/or priced out of affordability to all except those in the upper class of our society.

Back in the early 1900’s, 44% of the country were farmers and 22% of our net income was spent to put food on the table. Today less than 2% of the jobs in this country involve farming and 7% of middle class income on average is spent on food. This is in large part due to the just-in-time industrial globalization of food supply, large food subsidies to Big Ag doled out by our government, and the creation of synthetically modified “foodstuff” through biotechnology since 1966.

A Perfect Storm is upon us this spring 2014 in California and well beyond.

The gale force storm is likely to blow serious price changes to the price and availability of our basic foods through the months and years ahead due to several different factors that affect food costs and availability, or as called in businessese ,“structural prices change”. This March of 2014 has seen the largest increase in beef and veal prices since 2003 while milk prices globally are hitting all-time record highs. According to the U.S. Labor Department, since the end of 2013, lean hog prices have risen 42.5%, oats 29%, cocoa 11.8%, wheat 11.9%, cattle meat 11.4% and raw sugar 3.9%.

As what happens in many a crisis’ it is not usually one catastrophic event that causes great disruptions and significant abrupt change in lifestyles, but many times seemingly random unrelated events occurring simultaneously or in quick succession, which can cause great upheaval and long-term deviation from previous periods of seemingly long-term normalcy.

Additionally, weather-wise, history shows us that there are long periods of constant and consistent “Goldie Locks” planetary environments which have been followed by sudden, abrupt rapid climate changes. We appear to now be one of those times as the Eastern half of the U.S. endures an endless winter while Californian records historical drought conditions, yet to our immediate North, Oregon has recorded record cold snows this past winter. Globally, it is much the same story.  Europe is blasted this winter with massive winds and storms while Alaska reports 40 degree above normal temps and Australia has to reset their color coded weather warnings to accommodate never before seen temperatures that reached 130 degrees this summer.


California officials who manage the State Water Project announced in early March that they won’t be releasing any water for farmers, marking a first in its 54-year history.

Farmers are hit hardest, but they’re not alone. Contractors that provide cities with water can expect to receive half of their usual amount, the Bureau said, and wildlife refuges that need water flows in rivers to protect endangered fish will receive 40 percent of their contracted supply.

3300 water contractors that provide farmers with water and hold historic agreements giving them senior rights will receive 40 percent of their normal supplies. Some contracts date back over a century and guarantee that farmers will receive at least 75 percent of their water.

One of those is the San Joaquin River Exchange Contractors Water Authority in Los Banos that provides irrigation for 240,000 acres of farmland. The Water Authority’s executive director Steve Chedester said farmers he serves understand that the reality of California’s drought means it’s going to be tough to find enough water for them. “They’re taking a very practical approach,” he said. “If it’s not there, it’s just not there.”

For the State of California, most in the state are critically dependent on what water comes off the Sierra and as noted above there will not be very much water to allocate.

The snowpack – often called California’s largest reservoir – normally provides about a third of the water used by cities and farms as it melts into streams and reservoirs in spring and early summer.

California’s major reservoirs, mostly bereft of both snow and rain this winter as the drought pushes through its third year, are dangerously low. Lake Oroville in Butte County, the State Water Project’s (SWP) principal reservoir, is at only 39 percent of its 3.5 million acre-foot capacity (57 percent of its historical average for the date). Shasta Lake north of Redding, California’s and the federal Central Valley Project’s (CVP) largest reservoir, is at 38 percent of its 4.5 million acre-foot capacity capacity (52 percent of its historical average). San Luis Reservoir, a critical south-of-Delta reservoir for both the SWP and CVP, is at a mere 33 percent of its 2 million acre-foot capacity (39 percent of average for this time of year).

With no end to the drought in sight, DWR on January 31 set its allocation of State Water Project water at zero. The only previous zero percent allocation (water delivery estimate) was for agriculture in the drought year of 1991, but cities that year received 30 percent of requested amounts. This is the first time the allocation has been set at zero across the board. (Source)

”The CA state has promised 5-1/2 times more water rights than the water that actually exists,” said Carolee Krieger, Executive Director of the California Water Impact Network (C-WIN), a member organization of the Environmental Water Caucus.

In reaction, California legislature is fast tracking plans to raise Shasta dam some 18.5 feet. Shasta dam is the largest holder of water for California and raising the water line would further wipe out the last original Winnemen Wintu Indians who were moved off their sacred lands when the original dam was built in 1945. (Source)

Also being fast tracked is to build another massive dam that would be the 7th largest in the state to be located just above Sacramento and East of Mendocino County called “Sites” that would take water from Shasta dam. The new dam would cost an estimated $2-4 Billion from over taxed citizens of California. Congress is illegally being bypassed for the first time in not being allowed to vote on the proposed dam as required by law.  Not so coincidentally, CA Senators Boxer and Feinstein proposed $300 million drought relief funding that would give the Feds more authority to direct California’s water from Shasta dam to the new dam and to the Big Oil frackers down in Central Valley. (source)

California’s agricultural abundance includes more than 400 commodities. The state produces nearly half of US-grown fruits, nuts and vegetables. The state’s 80,500 farms and ranches received a record $44.7 billion for their output last year, up from $43.3 billion in 2011 and $37.9 billion during 2010.
California’s top-ten valued commodities are:
• Milk — $6.9 billion
• Grapes — $4.449 billion
• Almonds — $4.347 billion
• Nursery plants — $3.543 billion
• Cattle, Calves — $3.299 billion
• Strawberries — $1.939 billion
• Lettuce — $1.448 billion
• Walnuts — $1.349 billion
• Hay — $1.237 billion
• Tomatoes — $1.170 billion

Exports totaled $18.18 billion in value which represents an 8% increase over the previous year. Three-fourths of California’s water is used on crops and about 15 percent of those crops are grown for export. As a California water blogger puts it, “If we are growing 750,000 acres of nuts for the rest of the world, then we’re shipping 2.25 [million acre-feet]/year of water away in the form of pleasant snack at the direct expense of people here in the state.”

New figures show U.S. wine exports grew for the third consecutive year in 2012, setting a record of $1.43 billion in revenue, according to the San Francisco-based Wine Institute. Ninety percent of those exports were from California. Volume shipments reached 424.6 million liters or 112.2 million cases. The European Union remained the top market for California wines, accounting for about 34 percent of all sales. The state’s wineries also saw significant growth in Canada and Asia. Sales in China reached $74 million in 2012, up 18 percent from the previous year. South Korea, at $16 million, was up 26 percent. And Vietnam, at $27 million, was up 22 percent.

“My gross sales are probably going to be cut in half,” said Bill Diedrich, who farms 1,500 acres of almonds, tomatoes and other crops in the parched Central Valley community of Firebaugh. “Some farmers out here are going to lose everything they’ve got.” Jim Cochran of Swanton Berry Farm in Davenport, CA. offers a hint of what may come. He stopped watering his artichokes a month ago and expects the cost of a pint of organic strawberries, which usually sell for $3.50 at Bay Area farmers markets, to go up roughly 20 percent to at least $4.20 a pint.

“We’re really concerned about the extent to which acreage is being taken out of action,” said Richard Volpe, an economist in the Foods Markets Branch of the U.S. Department of Agriculture. “The real economic impact is long-term and will be felt down the road, when there will be a structural shift in prices.”

Farmers are not the only business’ that will be affected. Construction contractors and other water intensive business’ are told to expect to receive half of their usual amount, according to the State Farm Bureau. This is coming at a time when home sales for February recorded its lowest levels on record since 2008. Wildlife refuges that need water flows in rivers to protect endangered fish will receive just 40% of normal allocations of their contracted supplies.


Last month, the largest slaughterhouse in the North Bay, Rancho Feed of Petaluma was shuttered and a week later went out of business altogether due to the USDA recall of nearly 9 million pounds of “diseased and unsound” beef.

Caught up in the USDA big freeze of meat suppliers in our area are many of the high end meat suppliers including Niman Ranch that used the Ranch Feed slaughter facilities. Bill Niman has 40,000 pounds of grass-fed beef in freezers over in Richmond that the USDA refuses to allow released for sale for over 6 weeks now. Mr. Niman has said that if he is not allowed to sell this beef to customers he and other grass-fed ranchers will go out of business for good.

At this same time, a highly contagious pig virus known as “Porcine Epidemic Diarrhea virus”, has now spread to 27 different U.S. states, and it has killed more than 4 million hogs since last May. Smithfield Foods, the largest pork producer in the entire world, estimates that approximately 10 percent of all adult female hogs in America have contracted the disease already, and there is a very good chance that any offspring that they have will die. That is because the mortality rate for this disease for piglets is between 80 and 100 percent. Fortunately, we are being told that this disease does not affect humans.

Additionally, due to our historic drought in California, availability of alfalfa and hay to feed their livestock is getting harder to find and increasingly more expensive for cattle and sheep ranchers. Jamie Williamson, of Williamson Hay Supply of Redwood Valley, who provides much of the feed for livestock in Mendocino, is frustrated due to lack of available supply: “I have standing orders I cannot fill right now” he said this week. “This is the time when we are supposed to have abundant supply at lower prices for the ranchers but I just can’t find any. I called up to Oregon to make a run and they told me not to bother because they are tapped out as well.”

When I asked him what he thought prices might be this winter he replied, “If, and this is a big if, if you can find any this winter, you are looking at a doubling of prices, easy.” As the drought continues many ranchers are culling their herds to reduce costs and future expense. Some local valley ranchers in Anderson Valley have cut back their herds by half this year. This has kept some local inventory beef supply and prices in relative check, once that supply is used up, beef prices will rise accordingly.

Last October a “freak flash freeze” hit South Dakota killing 100,000 cattle. Between January 2011 and January 2013 Texas lost 15 percent of its cattle — or about 2 million animals – to drought. That helped the size of the U.S. herd drop to 89.3 million head, the lowest level since the 1950s.

The closing of the North Bay’s largest slaughterhouse on February 7th of this year by the USDA is suspect as to its timing and impact of our local beef supply. Even as the USDA continues on with its investigations, a small high-end beef buyer has been allowed to buyout Rancho Feed operations even though the USDA has not declared the exact cause of the recall and has three ongoing investigations, including one criminal investigation.

Initially, the USDA recalled 40,000 of beef from Rancho Feed on January 13, 2014 because the meat did not receive a “full inspection”. Three weeks later the big hammer came down and 8.7 million pounds of beef was recalled that came from this one meat processing plant due to “diseased and unsound animals”, according to the USDA. A week after the largest recall in U.S. history of beef, the USDA announced that the recall would affect 80 food distributors throughout the country and would go back for an entire year.

Rancho Feed was the only USDA-inspected animal processing facility in Sonoma, Napa, Marin, Lake and Mendocino counties, with the exception of a small plant for sheep and goats near Occidental.
Just a few days after the recall, the USDA announced that the recall would go back for an entire year and include many top Big Food providers. Company brands like Nestle’s Philly Steak, Cheese and Croissant Crust Philly Steak and Cheese Hot Pockets, Walmart Fatburgers, Kroger Ground Beef Mini Sliders and other well-known brands were also cast in the USDA dragnet.

How the USDA plans to recall beef that had been already been sold and consumed over the past year is unclear, yet they insist that no cases of illness from the unsound beef has been reported.
Bill Niman, of Niman Ranch, and one of the longest suppliers of local traditional beef, has been dumfounded by the recall.

From the Santa Rosa Press Democrat (2.23.14),
“Marin County beef producer Bill Niman goes to extreme lengths to track his animals from birth to slaughter. He’s hoping his records will prove his beef is safe and convince federal regulators to reverse a decision that will force him to destroy at least $300,000 worth of frozen meat caught up in the Rancho Feeding Corporation recall.

Niman and his wife Nicolette Hahn Niman are among a small group of upscale North Bay ranchers who have been ordered to surrender all beef processed last year at the Petaluma slaughterhouse. “We’re the ones taking a big hit on this,” said Niman, 69, who also founded Niman Ranch in the early 1970s and is widely considered one of the early leaders in humane and sustainable meat production.
The financial damage to North Bay ranchers — many of them raising high-end, grass-fed beef — makes the Rancho case rare among meat recalls, experts said. And to date no one has revealed such potentially huge losses as the Nyman’s. The couple said the losses may put them out of business.

They have asked the U.S. Department of Agriculture to review documents showing that BN managers or Niman himself were at Rancho with USDA inspectors every time their animals were killed and processed. “We not only know the inspectors were there,” said Nicolette Hahn Niman. ‘We were there ourselves.’”

Only a few days after Rancho Petaluma announced it was closing for good, Marin Sun Farms, a small local high-end grass-fed beef grower had stepped in and bought the processing plant in a slick fast escrow close. The USDA apparently gave their blessing to the buyout even though, at the same exact time, they were adding a criminal investigation to the two investigations already underway.

Why anyone would buy a “diseased and unsound” business while government investigations are continuing is unclear unless they know more than has been disclosed to the public.
Marin Sun Farms is a 3rd generation grass-fed operation with 22 employees according to their website. Yet a deeper story lies as to who came in so quickly to back Dave Evans, CEO of Marin Sun Farms, on the down and dirty purchase of the slaughterhouse providing critical millions of dollars in cash to help with the purchase of Rancho Feed.

According the SF Biz Journal, Mr. Evans was able to quickly gather one of the biggest names in Silicon Valley to help in the buyout, Mr. Ali Partovi. Mr. Partovi was a large Angel investor in the early days of private Facebook as well as other very profitable start-ups. He also co-founded, a technology software company working with Google, Apple and Bill Gates Foundation to bring the technology based Common Core programs to all public schools.

Only after significant pressure from the local grass-fed beef ranchers who are caught up in the recall, the USDA announced on March 7th that some of the beef was tainted due to “cattle infected with eye cancer”. “Rancho was allegedly buying up cows with eye cancer, chopping off their heads so inspectors couldn’t detect the disease and illegally selling the meat, the sources said.” The tipster said that the illicit slaughter was happening after-hours, and that the carcasses, which showed no signs of cancer or ill-health, were able to pass as good beef and were sold under the Rancho label.”  (SF Chronicle, 3.8.14)

How USDA inspectors for over a year could not detect the eye cancer, which grows on their outside eyelids, was undisclosed due to their “ongoing investigations”.

Aiding and abetting The Perfect Storm, it turns out that the USDA realigned its meat inspection program due to cost cutting just six months ago. The USDA introduced a new self-regulation program, called HIMP (Hazard Analysis and Critical Control Point-Based Inspection Models Project). HIMP plans to eliminate 800 federal meat inspectors and is already in operation at about 25 chicken and turkey plants. It likely played a role in the Rancho Feeding Corp. recall said Stan Painter, president of the National Joint Council of Food Inspection Locals, which represents 6,000 inspectors nationwide. “In many places, managers and veterinarians are being asked to help with inspections,” because of a shortage of federal inspectors, he said.

Bottom line for Bill Niman is that he is likely out of business as the USDA announced this week that the three ongoing investigations were going to take a very long time. Officials said it was unlikely that he and the other grass fed beef ranchers would see their inventory released from the massive recall as USDA set a very high bar to clear anyone from the blanket dragnet.

Those cattle ranchers that cannot use Marin Sun Farms processing plant will now be forced to travel great distances to slaughterhouses in Eureka or the Central Valley. This, combined with our critical water shortage and feed costs, will put many out of business for good, causing beef prices soar and a steep decline in local grass fed beef suppliers for North Counties and beyond.

Adding salt to the growing deep wounds of our critical food issues is the first time ever cuts to SNAP, also known as the nation’s food stamp program. Beginning this year food stamp funding is being cut by some $4.5 billion dollars with another $12 billion in cuts planned in following years.

Little known by all is that this $4.5 billion cut was set in motion back in 2012 when Michelle Obama announced her “Healthy Food for Schools” program. Since Congress refused to allocate funds to her new program her husband made a deal with a compliant Congress to use SNAP food stamp program money to pay for her “Let’s Move” campaign beginning in 2014. (Source)

Kathy Jackson, CEO of the Second Harvest Food Bank of Santa Clara and San Mateo Counties, which distributes 52 million pounds of food each year to low-income California residents, says the drought could prove devastating to the food bank’s users. That’s because 27 million pounds of the food her organization hands out annually are fruits and vegetables donated by California farms and growers.
As we move deeper into this Perfect Storm it needs to be noted that our President and elected officials can find tens of billions of dollars from us taxpayers to support regime changes in Egypt, Syria, Afghanistan, Iraq and now Ukraine but only millions to help the starving farmers of California which feed our families.

It also needs to be made clear that the Governor of California, Jerry “Moonbeam” Brown has refused to cut back water to fracking operations in the state at the direct expense of our states farmers and ranchers resulting in feeding our cars over our people.

To those who don’t think food shortages and rationing could ever become reality in the U.S all we have to do is look at what is happening in Venezuela. Just last week Venezuela introduced food rationing that limits grocery purchases to limits of just one day per week with limited amounts of food purchases and an automatic electronic halt to any excess purchases of basic foods. Next week they plan to initiate a national food ID card. The food shortages in Venezuela are being caused by their countrymen selling food to neighbor Columbia, whose food prices are 10 times higher causing shortages, though a similar Food ID system could very well be implemented in this country by the end of summer due to supply shortages due to California’s historical drought, weather weirding throughout the planet and untimely USDA meat recalls causing many cattle ranchers out of business permanently. (Source)

Local farmers and ranchers may become our critical food supplier in the months and years ahead if drought conditions continue through next year and beyond as our collective “new normal”. Supporting our local foodshed infrastructure of farmers, ranchers and local food stores has never been more critical now. All that can grow food for themselves, for others, and to support our local food banks and soup kitchens is imperative.

If the Perfect Storm is our new normal we must all once again get down on our knees, like our forefathers and mothers before us, and plant a seed to feed our own. Maybe then we will begin once again to value and cherish our sacred Mother and not just treat her as a never-ending supply house and sewer.

Maybe our children will once again learn then how to grow their own and live in self-reliance and self-sufficiency without need or want of outside government agencies and learn to respect Earths Laws and Natures Ways as stated by our Founding Fathers in their very first document they signed when they broke away from the previous tyrannical oppressive government of their time:

The Declaration of Independence

IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation

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