Words of Wisdom for Jerry Brown, from Jerry Brown

October 31st, 2016

A siege mentality is taking hold in California’s agriculture community. The state’s farmers have never confronted so many existential threats at one time.  The most well-known to people outside the industry are the lack of a legal and stable workforce to harvest crops, and the lack of water that has been brought about by a historic drought and made much worse by failed environmental policies that cause water to be flushed out to sea.

Less understood among the general public is the overwhelming burden of federal and state regulations that have been layered on farmers year after year for decades.  At this moment, virtually every state agency that touches agriculture is promoting aggressive regulatory mandates, driven by labor unions and environmental activists, which will cause serious economic harm to California’s only remaining legacy industry.

Policymakers, however, have been keenly aware of this for many years.  All businesses in California struggle with the state’s thick red tape and regulatory mandates.  Chief Executive magazine’s ranking of the best and worst states to operate a business placed California dead last—again—in 2016.  While the state ranked in the bottom half for “workforce quality,” it took the 50th position for taxes and regulation.

Think for a moment about what ranking 50th on taxes and regulations means.  Worse than every other state, even Massachusetts!

It takes a serious and sustained effort to beat that competition!

The state’s Legislature is dominated by urban Democrats, who are closely aligned with labor unions and environmental activists.  Some have demonstrated a sincere desire to understand and support the state’s farmers, but as the debate over the overtime legislation demonstrated, the overwhelming power in the California Legislature lies with the unions, who can resurrect a defeated bill and, through relentless application of political pressure, subdue the concerns of Democratic legislators who can foresee the harm that will come to farmers and farm employees alike.

We’ll have more to say on that problem—the Legislature’s majority—in the near future, but for the moment, let’s turn to Governor Brown.

Jerry Brown came back into the governor’s office in 2011 as the experienced and decidedly non-flashy pragmatist, a man who had seen much and knew more than any legislator about balancing California’s complex web of interests to effect relative harmony and economic growth.

And he seemed to bring with him a newfound clarity on the ills that come with hyperactive legislating and the proliferation of regulations and rules that inevitably follow.  In a 2009 interview with LegalNewsline.com, then-state Attorney General Jerry Brown spoke quite eloquently:

 

“The whole framework of law is crucial for the operations of business enterprises,” Brown said. “But when over prescriptive, it creates a huge and growing amount of overhead and it does seem that we’re reaching the point of counter-productivity.”

 

The publication went on to report this passage from a speech Brown had given earlier that day:

 

“We are moving every year to add more and more legal prescription to our lives, to our organizations, to our businesses and how we all function,” Brown said, estimating that the state has about 30,000 more laws today than when he was a two-term governor from 1975 to 1983.

·  ·

“We’re overlaid too much with too many rules,” Brown said. “The real challenge for lawyers and legislators and chief executives is to do no harm and to add to the system ways that give more elbow room, more flexibility, more discretion, more judgment.”

·  ·

“The capacity to manage people in society by unending escalation of pervasive legal prescription is questionable,” Brown said.

·  ·

Too often public officials notice a problem, Brown said, and want to do something about it immediately.

·  ·

“If the ‘something’ is only more law, then I would oppose that,” Brown said, noting that with each new statute comes disputes, litigation and subsequent appeals.

·  ·

 

And, he might have added, stifling rules and compliance mandates that add cost to economic enterprises while all too often failing to advance the stated objective. These are the immediate impacts.

In the long-term, the impacts are severe. Urban Democratic legislators may believe that they are the champions of small “sustainable” and “local” farmers. And they may believe that because farm land cannot move out of California, farming will stay here. They are wrong.

Larger farming operations have the financial wherewithal to manage California’s mass of regulations and mandates.  They can hire the lawyers and environmental consultants needed to comply with California’s rules.  It is the small farmers who can’t afford these burdens.  They will be forced to sell out to larger farming companies, and in fact consolidation has been increasing in pace for years in California.

Furthermore, when the large farming operations crunch the numbers and find that producing the same food in another state or a foreign country costs so little compared to California, they possess the capital and the business relationships to move production out of the state.  The buyers of most fresh produce—the big box stores, grocery chains and restaurant companies—understand this as well.  For example, Costco recently announced its intention to finance farmland acquisition in Mexico and subsidize the cost borne by growers of transitioning that land to organic production.  Why would Costco do that?  They quite reasonably see the high cost of sourcing fresh produce in California compared to Mexico, and, working with trusted growers, choose instead to source from Mexico.  The message to our governor, legislators, and regulators is simple: There are economic and social consequences to your actions.

Jerry Brown has two years remaining as California’s chief executive.  I pray that soon he will stand back, look long and hard at the many regulatory arms of his administration, and remember the wise words of a former state attorney general who dared to reveal a truth so rarely heard from career politicians: The “counter-productivity” of a government that never stops passing laws, imposing rules, and trying to force outcomes.

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Dozens of Partnerships Drive Business Model

October 31st, 2016

CA Member Profile

Tom Russell

Partner

Pacific International Marketing

Member Since 1990

Family Background: Tom Russell was born in Phoenix, Arizona, in 1951, the son of a banker.  His father did participate in the ag lending universe, but Tom was not exposed to the agricultural industry and really had no plans to go in that direction in his career.  He went to Arizona State University, majored in business management, and envisioned a career in martial arts.  In fact, he had a career in martial arts.

 

Kicking His Way Through College: Russell started wrestling at age 12 and was a martial arts student by 15.  He became quite the expert and paid his way through college because of his karate skills.  A company with a string of schools in the Southwest would fly him all around the area on weekends, teaching and giving exhibitions.  He once did an exhibition in Madison Square Garden as the undercard to a Mohammed Ali boxing exhibition in the early 1970s.  Somewhere along this time, he also opened up his own karate school, an endeavor he remained connected with for the better part of a decade, even as his ag career was taking off.  Though he still trains in martial arts, he gave up fighting as he approached his 30s.  “I won most of my matches, but I was still hurting the next day; that’s when I decided to stop fighting.”  Russell estimates that he competed in 1,000 matches in his career, winning the vast majority of them.

 

The Ag Connection: It was an early relationship that introduced him to agriculture.  The end of the relationship set the stage for the business model that has proven successful for about 40 years.  His ag career began with the J.A. Wood Company in the mid-‘70s with his backside firmly planted on the seat of a tractor.  When he joined that company, he thought it was for a desk job, but soon learned differently.  After he became fairly well acquainted with the fresh produce business from the ground up, he did move into the sales office, and eventually the end of the relationship pushed him out on his own.

 

Traveling the Produce Circuit: “It was the early 1980s and there were a lot of 30-day fields.  I was a hired gun,” he said.  “I went from deal to deal selling the production and then moving on.”

Russell spent time in Alamosa, Colorado; Las Cruces, New Mexico; Brawley, Phoenix and Salinas.  Wherever there was a crop in need of a salesman, he would go.  He largely lived out of the back of his car.  He picked up a lot of experience and a lot of friends.  One of his early friends was Vic Smith, who was also in Alamosa working that deal.

 

The PIM Business Model: It was during the mid to late-1980s, that Russell opened an office in Phoenix and another in Salinas.  He formed a partnership with Dave Johnson and started Pacific International Marketing in the mid-1980s, formally incorporating several years later.  About this same time, he formed a partnership with Smith.  “We’ve been partners for 37 years,” Russell said, counting this as perhaps his longest standing partner.  However, the Smith partnership has plenty of company.

“I have about 40 partners,” he said rattling off a who’s who in the western vegetable industry, with partnerships in virtually every phase of the business, including growing, harvesting, cooling, sales and distribution.

In fact, he was hard-pressed to define Pacific International Marketing.  “Everyone asks me that.  What are we?  We’re a confederation.  We have a bunch of different growers and we work together on a lot of different crops.”

Russell believes the key to PIM’s success is finding the right partners, giving each of them an equity position and sticking with them for seemingly decades.  The longevity of the relationships and the way they were crafted over the years makes them relatively easy for Russell to keep track of, even though there appears to be dozens of them.  “I’ve been putting this together for 40 years, piece by piece.  I inherited a good accounting gene.  I see numbers.  I can look at a spread sheet and see pretty quickly if it’s going to work.”

Another key is the way Russell goes about his crop rotation plan.  “We do it differently than most.  We look at what we can sell and then we work with growers to provide that.”

And it appears that he has those grower conversations with a deft touch.  “It’s his money and if he wants to grow it, he can.  But we tell him what we can sell.  Otherwise, it’s just like going to Vegas.”

On any given day, PIM is selling product that it has zero to 100 percent ownership of.  “But it makes no difference.  The salesmen can’t see that on their screens.  We treat it all the same.”

 

Contract vs Open Sales: “We try to never have more than 30-40 percent of our production contracted,” he said, noting that Mother Nature plays a huge role and can make volume fluctuate greatly.  He clearly doesn’t want to have 10 loads contracted and only six loads produced that day.

“What we try to do every day is maximize returns to the grower.”

 

The Future: Even as he is approaching 65 years of age, Russell has no plans to ever retire.  He expects them to pry the sales phone out of his cold, stiff, dead hand one day.  Today, he spends most of his time planning for the future.  He loves working out the numbers as to when he will need what to satisfy his sales desk.

While he sees many major challenges, including labor and water, Russell said the advantages in the soil California and Arizona have over other areas is not going to change.  He did note that the labor force is increasing in age and declining in number.  “We have to mechanize,” he said, stating that it has to come to all areas of production from planting to thinning to harvesting.

Russell said he has more plans and ideas for growth than he will ever accomplish in his lifetime, but that doesn’t stop him from trying.  Over the last three years, the company has registered a growth rate of about 25 percent.

 

On a Personal Note: Tom and his wife, Carol, have been married for 33 years and have three daughters and a son.  Son John has joined the business and works for Will Rousseau (another Tom Russell partner) at Rousseau Farming in Arizona.  His daughter Anna runs the family winery business in Monterey County.  The De Tierra Winery has a tasting room in Carmel.  He said daughter Olivia’s passion is conflict resolution.  She works for a non-profit, non-governmental organization (NGO) in Burundi, Africa.  His daughter Sarah Cieglar, who is married and lives in Los Angeles, is in her second year of residency in radiology at the USC Medical Center.

With the kids and their families spread out a bit, he and Carol have indulged in quite a bit of leisure travel in recent years, largely to visit the various members of the family.  Last year, they took a trip around the world via airplane.

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WG Careers in Ag Program Connects Community Colleges Students to Ag Workforce

October 31st, 2016

Enthusiasm and excitement radiated from 14 community college students as they toured agricultural operations throughout the Central Valley, learning about the jobs they had only heard about in textbooks.

On September 23, 2016, Western Growers officially expanded its Careers in Ag program to serve California community colleges.  The program, which has only been in commission since June, was originally created to encourage college students from the California State University and University of California to pursue science, technology, engineering and mathematics (STEM) careers within the agricultural industry.  The program has advanced and is now offering community college students the opportunity to learn about the various careers available in ag by connecting with professionals in the field.

Agribusiness and plant science students from Reedley College, College of the Sequoias and West Hills College took their education to the field when they participated in a full-day tour of growers, shippers, processors and related industry suppliers.  Hoping to use their skills and talents garnered from the classroom to give back to the communities that have raised them, these 14 students were thrilled to meet leaders from local ag operations and connect with the companies that make a difference in the Central Valley region and beyond.

The day kicked off at HMC Farms, where Harold McClarty introduced the students to his team to learn about the job skills required to pursue the many career opportunities available in the industry.  The students toured the Kingsburg facility and heard from professionals specializing in a range of jobs, from sales/marketing and business management to grape production and food safety.  The McClarty team also touched on how the increase in regulations—such as the passage of the ag overtime law and the latest Food and Drug Administration Food Safety Modernization Act rules—has created new jobs, including an on-site lawyer who specializes in agriculture.

After leaving the McClarty operations, students headed to Agri-Valley Irrigation, Inc. to learn about the diversity of positions within this large irrigation services provider.  Larry Rompal, CEO, and Jeff Tuel, president, alleviated any fears students might have about coming into a new company and not knowing the job right off the bat.  Agri-Valley makes it a priority to hire interns and train employees, as well as guide them on how to advance in the company.  Students had the opportunity to meet with Oscar Cruz, who was already leading the field operations in his 20s.  He spoke about how he did his “homework,” took the time to learn about the product and processes and applied gumption to everything he did.  Students learned how much hard work goes into making a company as successful as Agri-Valley, and left the tour knowing that working in agriculture is rewarding but not your regular 8-to-5 job.

The caravan of students stopped at Woolf Farming and Processing to learn more about the business of production and processing.  Paul Fanelli, director of human resources and risk management, gave students insight into growing and harvesting crops such as almonds and tomatoes and then converting them into byproducts.  Students also had the opportunity to hear what employers desire when hiring interns or employees.  “When you have a degree, it lets us know that you have long-term goals and discipline,” said Fanelli.  “That’s what employers look for.  That’s what we look for.”

The last stop in Fresno was at J.R. Simplot Company where students engaged in a Q&A session with a diverse panel of soil, seed and plant specialists.  Rich Bernier, the Water Logic Services lead, started the session off by highlighting the vast array of career opportunities J.R. Simplot offers throughout its many operations around the world.  Students were then introduced to an agronomist, seed manager and two technical service representatives to hear about their latest projects and their favorite aspects about their job.  A number of students on the tour are studying to be certified crop advisers (CCA) and certified professional agronomists (CPA) and took this opportunity to ask about the steps to becoming a CCA and CPA and tips for success.

“I learned more about PCAs, but was also introduced to new careers paths,” said Brent Skaggs, an agricultural science & technology major at West Hills College, about his time at Simplot.

The tour wrapped up in Orange Cove at Mulholland Citrus, where Tom Mulholland and his daughter, Heather, gave students a tour of their nursery and insectary.  The Mulhollands walked students through the nursery process, highlighting the importance of rootstock verification, cone development and nutrition chemistry.  The tour ended with an impressive tour of the insectary, where Tom told students the story about how and why he started his insectary program.  In an effort to help reduce the amount of chemicals and pesticides used in the orchard, he raises millions of beneficial insects (Aphytis menlinus) to protect citrus trees from the California red scale pest.  Hearing from two generations of the Mulholland family and getting their boots dirty in the insectary and nursery was the perfect end to an insightful day.

“This tour was one of the most rewarding, well-spent times in my college career,” said Callie Bassett, an agribusiness major from College of the Sequoias.  “It not only informed me but motivated me to continue my education in ag.”

In addition to introducing students to the multitude of career options in ag, the Careers in Ag program also aims to bring bright and enthusiastic minds to our members to help fill their future workforce needs.  As the program develops, Western Growers plans to reach out to members to identify job openings and facilitate career placement between graduating students and member companies.

This is the first of many regional tours for the Careers in Ag program for community colleges.  If any member companies are interested in hosting a tour or have internship/career opportunities, please contact Stephanie Thara at (949) 885-2256.

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WATER WOES Rain Year Ends; Drought Persists

October 31st, 2016

Despite the El Nino effect, which did drop above-average rainfall in Northern California in the 2015-16 rain year, the year officially ended on September 30 without an end to the drought.

Statewide, this marks the fifth consecutive year of below-average precipitation that fell more often as rain than snow.  Record warm temperatures created an early and sparse runoff that was in large part absorbed by parched soil before ever reaching the state’s reservoirs.  The water content of the California Sierra snowpack was also well below normal.  These dry, warming conditions leading to the decreased water content of the snow has been called a “snow drought” by water officials.

In its recently-released report “Water Year 2016,” the California Department of Water Resources (DWR) leaves no doubt that the drought persists.  Water Year 2016 is officially listed in the record books as ‘Dry’ statewide, even though parts of Northern California experienced average to slightly above average precipitation.

The forecast for Water Year 2017 is uncertain.  The National Oceanic and Atmospheric Administration’s Climate Prediction Center currently sees slightly better than even odds that weak La Niña conditions will develop this fall and winter.  La Niña refers to the periodic cooling of sea-surface temperatures across the east-central equatorial Pacific.  It represents the cold phase of the El Niño/Southern Oscillation cycle, nature’s year-to-year variations in oceanic and atmospheric conditions. La Niña is the opposite phase of the warm, El Niño effect that California experienced this past water year.  There are no guarantees for substantial La Niña rainfall.  Water officials warn that making seasonal forecasts of precipitation—the ability to predict now if 2017 will be wet or dry (and how wet or dry)—is scientifically difficult, and the accuracy of such predictions is very low.  Historical records are the only source of facts to study for any indication of what California may see in the form of precipitation in coming months.  Of the 18 La Niña winters since 1950-51, 16 have provided below average precipitation for Southern California’s coastal region, and 15 winters have resulted in below average precipitation for Southern California’s interior region.  Above average precipitation was recorded in 11 winters for the Northern Sierra and in eight years for the Central and Southern Sierra.  Water year 2011 brought the only significantly wet La Niña event in this time period.

The report shows that 60 percent of the state currently remains in severe or extreme drought.

DWR Public Information Officer Doug Carlson went through the report with WG&S pointing out many of the deficiencies as he looked at reservoir contents and precipitation numbers for the year.  “The snapshot (of where we are now) is not looking good,” he said on Oct. 4.

He noted that last year, with the expected El Nino on the horizon, the state’s official climatologist was widely quoted noting that California needed 150 percent of normal precipitation to pull out of the drought.  That did not happen and there is no discussion this year of a one-year fix.  “It’s going to take several years of wet conditions to end the drought,” he said.

In fact, even as he spoke, drought conditions continue to increase.  He noted that Sacramento received a spate of measurable rain over the first weekend of October, which was the first measurable rain in more than four months.  Coming on the first couple of days of October, on October 3, the state was on par with normal precipitation two days into Water Year 2017.  By the following day, with no further rain, the state precipitation level was already below par, meaning that early October on average, usually delivers some rain.  At this writing a week later, there has been no further rain, though there is a storm in the forecast for mid-October. Seemingly Water Year 2017 is coming in like a lamb rather than a lion.

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Immigration 2017—Opportunities and Challenges

October 31st, 2016

(Editor’s Note: This story was written in late October, prior to the November election.)

 

We are about to conclude one of the strangest campaign seasons in American politics in any of our lifetimes.  We had two of the most unpopular major party nominees either party has ever put forward.  We saw a campaign that diverted into the personal and scandalous at almost every turn, leaving many critical issues woefully unaddressed in the political discourse.  Yet, one issue both Hillary Clinton and Donald Trump addressed was the issue of immigration reform.  It seems safe to say there will be some kind of effort on immigration reform in 2017.  So, what should we expect in 2017?

Regardless of a Clinton or Trump victory on November 8, the U. S. Congress is still responsible for writing and passing immigration legislation.  It remains unclear what the make-up of the House and Senate will look like, but it appears likely that the Senate will be split close to 50-50, maybe with one party holding a one or two seat advantage.  With the 60 vote threshold for most legislation in the Senate, the math for how to get to 60 votes is going to be a more significant challenge than in 2013 when the Democrats held a 55-45 seat advantage.

In the House, the Republican majority, by all indications, is expected to shrink, with most estimates projecting the GOP to lose between 10-15 seats.  Most of these losses will be in districts where the Republican was more likely to support some kind of compromise on immigration reform.  With those losses, the Freedom Caucus will have greater proportional strength within the Republican Conference, and will be pushing Speaker Paul Ryan and Majority Leader Kevin McCarthy to take a more enforcement-oriented and restrictionist stance on the issue.  The House has and will likely remain the most significant hurdle to passing meaningful immigration reform.

 

Trump Administration outlook

Outside of his expressed commitment to build a wall and enforce our immigration laws, much about Donald Trump’s immigration plan remains a mystery.  His primary advisors on the issue all come from a more restrictionist view on the issue.  We can expect to play defense in a Trump Administration on enforcement.  While some are hopeful he will understand the immigration challenges facing agriculture, his expressed policy statements and rhetoric to this point do not provide any solid assurances.

Additionally, while any administration does not have the resources currently to deport all 11 million falsely-documented individuals in our country today, agriculture remains low hanging fruit for anyone looking to increase deportations.

That said, if a President Trump wants to move legislation through Congress to build a border wall, there will be a number of Democrats and even Republicans who will insist that we deal with other broken aspects of our immigration system, and some kind of compromise could emerge.

A Trump Administration would be more likely to place political appointees friendly to employers within the Department of Labor, so we would have a stronger opportunity to argue for regulatory improvement to the H-2A program, but would still have to fight significant union opposition to such efforts.

 

Clinton Administration outlook

Hillary Clinton has expressed a strong commitment to advancing comprehensive immigration reform legislation in the first 100 days of a Clinton Administration.  If Speaker Ryan is able to start a constructive process in the House and is able to see a product pass that meets the satisfaction of a majority of the Republican conference, we could see a meaningful compromise bill passed into law.  Whatever is able to clear a Republican House and pass an evenly divided Senate will certainly have to be more “conservative” and Republican-leaning than the legislation that passed the Senate in 2013.  The political question that won’t be clear until next year is what is the magic combination that satisfies enough Republicans and can still be signed by a President Clinton?

On the regulatory front, we cannot expect to see any significant changes in the political leadership at the Department of Labor or relief from overly-burdensome H-2A regulations.  Further, in addition to Clinton’s close ties with the United Farm Workers, she endorsed the California ag overtime legislation.  While we would expect some kind of incentivized legal status for our current workforce to be an easier sell with a Clinton White House, when it comes to negotiating wages and visa caps, we cannot expect to have an ally for the interests of farmers under a Clinton Presidency.

 

Where can we look for hope?

While watching this issue over the past 10-15 years, it is fair to say no one is holding their breath that 2017 is the year meaningful reform will finally address our concerns.  But there is still a glimmer of hope on the horizon, and opportunities that could arise even in the midst of opposition and challenge.

First, it is likely we will have divided government, so if either side wants to accomplish their primary objectives related to legislatively reforming the immigration system, there has to be some give and take.  Agriculture has historically made a strong case for action, and even under a more enforcement-oriented scenario, there is a case to be made for why the immigration system must be reformed for farmers before a new enforcement regime takes effect.

Second, there is significant interest in immigration reform at the state level.  The National Association of State Departments of Agriculture (NASDA) recently incorporated the Agriculture Workforce Coalition’s (of which Western Growers is a founding member) policy position on immigration into its national platform.  Furthermore, there are a number of governors talking about the need to reform the immigration system in a manner that would encourage investment and job creation at a state and local level.  It remains to be seen, what kind of political spark, a push from outside Washington, D.C., could provide to finally move immigration reform.

Third, everyone on all sides of the immigration debate acknowledges our current immigration system is broken, and as Winston Churchill said, “Americans will always do the right thing…after they’ve exhausted all the alternatives.”

Regardless of the political climate on immigration, Western Growers will remain at the forefront of efforts to both advance immigration reform and shape the policies and proposals that will eventually become law.

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New Strategic Alliance with JLT Expands WG’s Worldwide Insurance Offerings

October 4th, 2016

Western Growers Insurance Services is expanding its global reach through a new strategic alliance with JLT Specialty USA, one of the world’s leading insurance brokerages.

The alliance provides Western Growers the ability to now offer agribusiness and food clients direct access to global insurance carriers.  This relationship also provides the opportunity to tap into offices around the world and the ability to meet specific company needs with the help of subject matter experts.  “By developing a strategic global alliance with JLT, we’ve advanced Western Growers’ insurance brokerage by 10 years.  Now with access to nearly 140 offices around the world, the food and agribusiness industry can utilize JLT’s broad spectrum of international insurance resources,” said Jeff Gullickson, senior vice president of WG Insurance Services.

Additionally, Western Growers and JLT also collaborated to create an industry-leading cargo insurance coverage solution and administration platform exclusively available to WG members.  This platform also enables members to effectively manage their cargo programs at the lowest possible premium costs.  The partnership will also offer Western Growers Shield™, a coverage solution where members will receive an insurance program, as well as continuous and unbroken transit coverage for all product shipments to and from all points on the globe.

We had the opportunity to chat with Mike Rastigue, executive vice president and West Coast sales leader at JLT Specialty USA, to learn more about this powerful brand.

 

Western Growers: Tell me a bit more about JLT.

Mike Rastigue: JLT has had 184 years of success and expansion.  Today, JLT Specialty USA is the U.S. platform of JLT Group, one of the world’s five largest global insurance brokers, and the largest specialty-focused broker worldwide.  We offer insurance, reinsurance, and wholesale insurance brokerage services, as well as claims advocacy, particularly in the area of management liability.  In addition, JLT Specialty USA has access to the second largest international network in the world, so our clients can reach any market they need for their overseas operations.  Globally, we are more than 10,600 people operating in 135 countries and have placed over $15 billion in premium for our clients.

 

WG: What makes JLT unique?

MR: We believe there is a better way to serve clients.  Our value proposition is aligned with our clients’ best interests.  Our approach, with our understanding of complex risk, allows us to provide tailored solutions that mitigate and transfer risk utilizing the gamut of capital sources.

We are specialty focused and are not all things to all people.  We focus on offering deep expertise in a number of core industries, and on key products that cross all industries.  We’re specialists, not generalists.  Complex risks drives this focus.  We understand the strategic, operational, human and financial aspects of risk, and we tailor solutions from the capital markets driven by facts, data and analytics.  We help clients find solutions to their most complex areas of risk, where innovation, optimization and depth of expertise are required.

We believe only the best and brightest can tackle complex risks.  To have a true specialty focus, you need deep talent and expertise.  We built JLT Specialty USA around our talent, which enables decisive insights that come from asking the question “How can data and analytics help my client make a better decision?”

We aren’t about aggregating premium to create better yields.  That’s a flawed model all too common in today’s larger broker community.  We’re looking for the best solutions in the marketplace that will help our clients succeed.  Their success metrics are ours.

 

WG: What about your company are you most proud?

MR: Our culture.  Our culture enables success.  We value people, teamwork and collaboration over margins and share price.  We work together to create value for our clients and enable a rewarding and challenging environment that attracts and develops the best talent in the industry.

Allowing our colleagues to have creative freedom enables solutions.  We believe that just because something’s been done a certain way in the past, doesn’t mean that that’s the right way to do it moving forward.  We actively encourage our people to challenge the status quo, looking at a complex problem in entirely new ways, if it serves the client’s best interests.

 

WG: Why did you decide to partner with Western Growers?

MR: Food/agriculture is one of our specialty areas.  We wanted to export that expertise into our U.S. operations; but do so with the proper partner/solution.  Western Growers is a premier agriculture association in the United States that shares many of the same values and culture of our own organization.  We wanted to build upon WG Insurance Services’ relationship with their members and together develop industry-leading solutions.

 

WG: What do you hope to achieve from the Western Growers/JLT alliance?

MR:  Our client’s success is our success.  We’re looking for the best solutions in the marketplace that will help our clients succeed.  Their success metrics are ours.  As a result of this partnership, new insurance-related products/solutions within the food/ag space have originated and will service the risk-related needs of the WG members.

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Back to His Roots

October 4th, 2016

Rob Yraceburu

President

Wonderful Orchards, LLC

Shafter, CA

Member Since 1988

Director Since March 2016

 

FAMILY BACKGROUND: In the early 1920s, Rob Yraceburu’s great grandfather immigrated to the United States from Spain and began homesteading in the San Joaquin Valley on 160 acres of dry land west of Five Points.  Of course, that was before the California aqueduct and irrigation transformed the valley into the rich agricultural mecca it is today.  That makes Rob a fourth generation California farmer, though he admits the farming history isn’t quite that deep.

His great grandfather truly did begin farming almost 100 years ago, but circumstances ended the pursuit somewhere along the way.  It wasn’t until the early 1960s, that his grandfather resurrected the agricultural gene and began growing grapes and producing raisins in the same general vicinity.

Rob’s dad also farmed valley land near Kerman, but he made his living as a pest control advisor…the same career Rob believed he was destined for during his college years.

 

Rob’s AG JOURNEY BEGINS: “I went to Kerman High School and my earliest job was as a field checker for an ag chemical company,” he said.  “I then went to Fresno State and my goal was to be a farmer and PCA, following in Dad’s footsteps.”

He did go to CSU Fresno along with his girlfriend, Gayle Nord, also from Kerman.  Both graduated with agricultural degrees, got married and were intent on living the farm life.  “But in the mid-1980s, ag was not in a good space.  There were not many ag jobs, though there were three banks offering me employment in the ag lending sector.”

And thus began a 30-year banking career.

SEEING AGRICULTURE THROUGH A BANKER’S EYES: While with his first banking employer—Farm Credit, Rob went back to CSU Fresno and earned a master’s degree in ag economics, while his wife was getting her teaching credential.  In 1987, they bought their first farm together, which was a small vineyard in Kerman.  But his career path was in motion and banking was stamped on the ticket.

After a short stint with Farm Credit, Rob became a junior loan officer for Wells Fargo and spent the next three decades moving his wife and their family of three daughters up and down the state as he rose through the ranks.  “I think we moved six or seven times,” he said, which included several stops in Bakersfield and Fresno, the San Francisco Bay area and Orange County.

His scope of responsibility changed from time to time including running the $14 billion national food and ag division for Wells Fargo, which included all of the United States and Canada.  At other points in his career he had different positions and areas of focus stretching from San Diego to San Francisco and from the California coast to its eastern borders.

 

A SECOND CAREER:  Sometime in the late 1980s, Rob Yraceburu was assigned to the account of Stuart Resnick and Paramount Farming.  At the time he served in a very junior position but it began a business relationship with Resnick that lasted throughout his career.  “We developed a great relationship,” he said.

In 2014, Yraceburu was living in Orange County with his family and reluctant to move.  In fact, he had turned down several relocation opportunities with Wells Fargo.  “Things were going well, but then Stuart Resnick called and said he was working on a succession plan and thought I could be part of it.  It took about six months of talking, but I did agree to come over to the company and move to Bakersfield.”

 

WONDERFUL ORCHARD: Resnick’s succession plan was to name Yraceburu president of the farming entity, which was renamed Wonderful Orchard a month after the new leadership was in place.  “We are the largest producers of almonds, pistachios and pomegranates in the world.  We have 90,000 acres from Kern County up through Madera,” he said.

Not too long ago, the company took out a large block of almond trees in a never-ending quest to have the right balance and have each orchard producing maximum results.  While those acres were pulled, Yraceburu said the company is still selectively purchasing new land where it makes sense.  Of course, water is the component that makes the difference and makes some land more attractive than other plots.

Yraceburu and his team farm the land and then turn it over to another arm of the Wonderful family of companies for processing, packaging, selling and marketing.

 

BACK TO HIS ROOTS: Coming from the corporate world of banking, in Rob’s mind he is finally being the farmer he always wanted to be.  He admits that if he had been a small farmer riding a tractor all these years and was now running Wonderful Orchards, he might see it more as a desk job.  “It’s all a matter of perspective,” he quipped.

 

A FAMILY MAN: While he did move his family around a lot in his early years of banking, Yraceburu tried to stay in Orange County for the latter portion as his three daughters moved through their more formative years.  As mentioned, he turned down some opportunities to stay put, which is what he promised his wife he would do.  Today, daughter Laura is a 22-year old in Seattle getting ready to go to law school.  Emily is 21 and finishing up her college career at Cal State Fullerton, while 18 year-old Sarah just started her freshman year at UC Irvine.

Rob and Gayle enjoy outdoor living, including water and snow skiing and playing golf.  He has also spent quite a bit of time serving on various boards for many different groups over the length of his career.

 

THE WESTERN GROWERS CONNECTION: He credited the late Bob Grimm of Grimmway Farms for first introducing him to Western Growers at the Annual Meetings when Bob was the chairman.  “I’ve gone to quite a few of the meetings since then and have always appreciated that Western Growers is the voice of ag production.”

Yraceburu said other organizations have many different factions that they represent that can lead to a lack of progress on important issues.  “Western Growers is never conflicted about who they represent.”

It is a distinction he appreciates and was always very evident even during his years in the ag lending sector, but is doubly important now that he is in ag production.  “We (Wonderful) think it is very important to be associated with Western Growers as its represents its constituency and speaks for the industry with a united voice.”

 

Posted in October 2016 Issue | Comments Closed

Whole Genome Sequencing and Food Safety

October 4th, 2016

In recent food safety conferences, prominent researchers and key regulatory officials have indicated that the use of Whole Genome Sequencing (WGS) in surveillance and investigative programs is increasing.  WGS technology is not new, but it is a hot topic that has raised many questions and the interest of several stakeholders in the last several months.

Just this year, several events on this topic have taken place, including a “genomics day” event hosted in June by the Institute of Food Technologists (IFT), several sessions hosted at the International Association for Food Protection (IAFP) Annual Meeting in July, two industry webinars in August hosted by industry stakeholders, including Western Growers, and a three-day meeting hosted by the Illinois Institute of Technology (IFSH) at the end of September.  With the potential and growing use of WGS in the food safety arena, this technology requires continuing attention.  But, what is the current state of WGS at the regulatory and private industry levels?

Whole Genome Sequencing may still be unfamiliar to many people, but the term simply refers to a laboratory process that determines the entire set of genes or genome of an organism (complete DNA make-up of an organism).  According to U.S. Food and Drug Administration (FDA) representatives, WGS enables the agency to better understand variations within and between species and organisms with a precision that other technologies, such as Pulsed-field Gel Electrophoresis (PFGE) do not allow.  The FDA is transitioning to WGS and has been using this technology to perform basic foodborne pathogen identification during foodborne illness outbreaks because of its ability to differentiate between even closely related organisms.  This allows outbreaks to be detected and stopped sooner, which results in fewer clinical cases and illnesses.

Furthermore, this technology has contributed to efforts such as the GenomeTrakr network, the first distributed sequencing-based network of laboratories to utilize WGS for pathogen identification.  It consists of public health and university laboratories that collect and share genomic and geographic data from foodborne pathogens.  Data collected includes isolates (strains of microorganisms) from routine FDA and state laboratory inspections, historical collections, past outbreaks, environmental monitoring/surveillance and food sampling for imports.  The data does not include names to prevent privacy issues.  This database is publically available and can be accessed online at any time.  When a match between a clinical and environmental sample is found in this database, an investigation is triggered to determine a contamination source.

To put this in perspective, the 2009 peanut butter outbreak resulted in more than 700 illnesses in 46 states that resulted in hospitalizations and deaths.  With the use of GenomeTrakr, two years ago an outbreak was detected faster than the one in 2009; this outbreak resulted in only six illnesses and no deaths.  The company implicated was able to recall this product, which was clearly in the best interest of this company and consumers.

While tracking and tracing of food pathogens is the most basic food safety application at the regulatory level, WGS has the potential to be used by the produce industry as a tool to monitor emerging pathogens, spoilage organisms and the effectiveness of sanitary controls.  WGS provides not only higher resolution, but also cost savings.  While DNA-based pathogen surveillance is not new, it was expensive when first introduced.  The cost of WGS has decreased dramatically in the last 10 years, from $3,500 to sequence an entire bacteria genome to $40 per genome in 2016, according to Dr. Ruth Timme, who is a research microbiologist with the FDA.

Dr. Timme was a featured speaker at a recent industry webinar and concluded that WGS is a powerful high-resolution tool for current standard investigations behind the scenes.  She confirmed that FDA’s procedure for outbreak investigations is still the same, but what is new is the use of WGS, a tool with higher resolution.  She also shared that there is already routine surveillance of pathogens along the supply chain.  Karen Jarvis, another research microbiologist with the FDA who also was a featured speaker, shared that while there are several opportunities and potential applications ahead, there are some challenges, including capacity building, a transition period from PFGE to WGS, the need for training and use of bioinformatics (collecting and analyzing biological data) as well as the participation of the private industry.

Immediate benefits of WGS to growers, shippers, processors and distributers may not be perceived right away by many, but they could be of great value when realized, especially during earlier intervention if focused on prevention.  For example, potential applications could allow a better understanding of the pathogens along the supply chain, at facilities and during transportation, sanitation and other activities.  In addition, identifying spoilage organisms is another area to explore and finally, early foodborne pathogen detention can translate to less product recalled, fewer impacted customers and less damage to brand recognition.

It does not appear WGS is not going away anytime soon, instead, it is likely to become a more frequent topic of discussion in the near future.  Western Growers is engaging on this topic, if you are interested in learning more about this subject, access an informative industry webinar on WGS at http://goo.gl/Z4bgbU or contact me at [email protected].

Posted in October 2016 Issue | Comments Closed

91st Annual Meeting – It’s Not Too Late, but Almost

October 6th, 2016

Aloha! We are exactly a month out from the 91st Annual Meeting in Kauai, Hawaii. Here are a few reminders and opportunities that are still available to participants.

Sponsorships

Feel like you’re missing out on an opportunity to get your company name in front of Western Growers’ members? It’s not too late to participate! We’ve recently added some new Bronze and Supplier Sponsors! Take a look at our updated list then contact Randy Hause at (949) 885-2265 for more information on available sponsorships.

Award of Honor Ads and Tables

You can still reserve a table for 10 to receive preferred seating at the front of the room for the best view of our stage, entertainment and the Award of Honor recipients. Each table reservation includes two complimentary bottles of wine. Proceeds of table purchases will also go towards the WG Foundation. To purchase a table, please contact Ryan Zilker at (949) 885-2249.

Absentee Voting Ballots

Don’t forget that this year’s event is being held during the Presidential Election (Tuesday, November 8). That means that anyone who is planning to vote needs to request an absentee ballot if you are attending the Annual Meeting. Obtain info on absentee voting ballots in Arizona, California and Colorado.

Registration and Book Room

If after reading all of this you realized you still haven’t registered for the 91st Annual Meeting, here’s your chance! Register and book your room today before it’s too late!

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CA Needs a More Stable Source of Funding – Not Temporary Quick Fixes

October 25th, 2016

As Election Day approaches in a couple of weeks, I wanted to take a moment to talk about a proposition that, if passed, will not be sound economic policy for California. I usually don’t agree with editorials by the San Francisco Chronicle, but their “Chronicle recommends: No on state Prop. 55” hits the nail on the head.

If California voters pass Prop. 55 on November 8th, it would extend temporary tax hikes on the highest-income Californians for an additional 12 years and further increase our state’s reliance on temporary financial “quick fixes.”

Granted, by passing Prop. 30 four years ago, we were able to restore some of the funding for essential state services impacted during the recession, most notably education. However, Governor Brown promised us the surtaxes and sales tax hikes would be temporary. With Prop. 55, it looks like the surtaxes may become a bit more permanent. 

California deserves a more stable source of funding. Overreliance on the wealthiest taxpayers – a source of revenue most highly susceptible to fluctuations in the market and economy – is not sustainable fiscal policy in the long term. In order to fully fund our education system, we need a different solution.

Our elected officials ought to facilitate a serious discussion that leads to greater revenue predictability and stability. This should include reforming the income tax structure, operating the state within the confines of a balanced budget and accelerating the pace of savings during periods of surplus.

Prop. 55 is not a lasting solution. It’s a quick fix that will put the future of our education system in jeopardy.

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AM91 Mobile App Now Available for Download

October 27th, 2016

You can now view schedules, explore workshops, access event locations and look up speaker information with a click of a button. The official mobile app for the 2016 Western Growers 91st Annual Meeting at the Grand Hyatt Kaua‘i, Koloa, HI, is now available for download.

This mobile app allows you to:

  • View schedules and explore workshops and keynote events.
  • Access event locations and speaker information at your fingertips.
  • Personalize your own schedule and receive event reminders.
  • Network with other meeting participants.
  • Interact with workshops and events with a real-time feed of all activities; engage in popular discussion topics and post and view photos.

Use the app to post status updates on the real-time activity feed, check in at events, rate/review activities, like or comment on a post, upload a profile picture and engage in a discussion during the workshops.

As an added bonus, the person who uses the app the most during the Annual Meeting will win the Cowboy Combo from Harris Ranch. The combo includes four 24 oz. Bone in Ribeye Steaks and four 20 oz. T-Bone Steaks; all eight steaks are aged 14-21 days to reach the peak of tenderness. A $195 value!

Not attending the meeting? No problem! Usage of the app is not limited to Annual Meeting attendees. All members can download the app and follow the Annual Meeting in real time.

To make the most of this year’s event, download the official mobile app before you leave for the Annual Meeting. You can download the app through the App Store (for iPhones and iPads) or the Google Play store (for Androids) by searching “Western Growers. For members who downloaded last year’s app, simply download the updated version and log in with the same email and password. If you do not remember your password, click “reset” and you will be emailed a link to create a new password.

For more information about the app, visit the 91st Annual Meeting AM91 app website. If you have any questions about the app, contact Tim Vu at (949) 885-2255.

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Ag Labor is Declining. We Need Better Policy, More Technology.

October 3rd, 2016

There is a severe ag labor shortage and it’s only going to get worse. Changing demographics and stringent regulatory barriers are causing the flow of workers crossing the border to dramatically slow down. These are the workers that help us harvest our crops—the workers that are crucial in providing the nutritious fruits and vegetables that feed our families.

As it is, rows of crops are left to rot in the field because there are not enough workers to help pick them. With an immigration reform not likely to pass anytime soon, the struggle for farm owners to find workers will continue. This is the largest workforce shortage I’ve seen since being here at Western Growers, and the ag industry is still getting hit with regulations that are preventing us from recovering.

Just last month, AB1066 (the ag overtime law) was signed by Governor Brown, repealing the 10-hour/day and 60-hour/week overtime threshold. This is on top of the minimum wage increase. What Sacramento doesn’t understand is that the increased pay and overtime benefits aren’t going to attract any additional workers to the field. Those extra workers don’t exist. In fact, these new laws will further reduce California’s farm production and cause people their jobs.

What legislators should have focused on was helping solve our labor shortage. Whether its governors taking immigration reform into their own hands or the federal government fixing our broken immigration system, helping sustain our workforce should have been the priority.  

I spoke about this very topic this summer during the Forbes AgTech Summit. My good friends, Harold McClarty of HMC Farms and Sammy Duda of Duda Farm Fresh Foods, and I shared our thoughts with the audience about what type of labor-saving technologies need to be developed to assist with production. There’s technologies being created to help with optimization and mechanization, but if ag is to survive with a declining workforce we need more. More R&D and more innovative technology. 

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