Big thanks to Ali Cox for having me on her Farm to Fame Podcast last week. Thoroughly enjoyed the conversation, and as you can imagine, we covered a lot of ground in 28 minutes! Give it a listen if you’ve got time. Otherwise, here are a couple of the highlights:
1) We walked through the Peru origin story – the combination of watching a lot of Imperial Valley acreage wander east to Yuma and south to Mexico for decades and then a 2024 Western Growers trip to Peru to view growing operations in Pisco, Trujillo, and Ica where we saw blueberries, avocadoes, and table grapes from WG members and domestic producers. It was that trip that helped me realize much of the conventional wisdom around Peru growers and production was incorrect. They actually have capital (in many cases US capital from US growers), they are good growers, and they recognize the economic advantage Peru growing can provide if you can put up with some additional risks relative to US/CA growing.
The advantages come from farmer-friendly policies ($24B committed to 22 private-public surface water storage projects; tax friendly treatment of ag investments) and strategic partnerships in infrastructure ($3.6B port of Chancay to lower transit time by 20-25 days to China; railroad from Brazil to Chancay to provide logistics to Asia). Because of these advantages, Peru has stated they want to put an additional 1M hectares (2.47M acres) of irrigated production into play and grow ag exports to $40B. At current trajectory they will pass California in ag exports by 2035. With fertility rates globally dropping below 2.1 in many developed and a lot of developing countries and domestic production growing in countries convinced they need more food security, the battle for ag exports will get more competitive going forward so this is an important metric to watch.
2) Consumer and brand marketing can do more to help create premium opportunities for specialty crop products. The organic premium is decreasing and organic acreage growth is slowing down and may go flat to down because as the premium shrinks, growers cannot take the yield hit and cost increase that organics routinely sees. So organic demand and willingness to pay significant premium appear to both be decreasing. These factors, combined with decreased demand for ag acreage in many California growing regions and shorter rental and lease periods, make organic hard to support. Really hard to go through a 3-year certification period if your lease is 3 years or less.
Consumers also show little interest in paying a premium for regenerative ag production, so public funds need to fill that gap to increase regenerative practice usage. Finally, the “locally grown” movement needs more consistent branding and messaging to get beyond consumers buying from the local Farmer’s Market growers.
