A handful of dairy farms have sold their cattle and converted to tree nuts, such as almonds, and many other California dairy producers are diversifying into orchards to improve their revenue, says Capital Press. It quotes Rabobank senior analyst Vernon Crowder as saying, “Most of our customers have diversified and are growing some type of nut.” The drawback to planting an orchard is that it reduces cropland available for growing feed for the dairy herd, so operators may have to buy forage. “Nut people, especially almond people, are scrambling for acreage,” said Crowder.
Market prices for almonds, walnuts and pistachios have climbed over the past decade due to rising export demand. Milk prices are down and feed prices are up at the moment. The mixture of those factors along with rising land prices has dairy farmers in the Central Valley planting orchards as an income supplement, said Rabobank. Nut crops require the same amount of water as alfalfa but input costs are less volatile. Converting alfalfa land to orchards could increase net returns by 4 percent on a 2,500-cow dairy farm, according to a Rabobank calculation.
California is the No 1 dairy state and a Rabobank analysis foresees a modest annual increase in milk production in coming years. There are ready buyers for cows whenever smaller or inefficient dairies close, said Crowder of Rabobank. And dairies are projected to return more revenue over the long run than converting entirely to nuts, says the analysis. “Maintaining the dairy is clearly the better option,” it says, but planting almonds is a sound way to boost revenue while mitigating risk.
Some farmers in the Central Valley are “planting phtovoltaic panels instead of crops” because the four-year drought has reduced their irrigation water allotment, says National Geographic. “(A)lmost a third of California’s big solar facilities—those capable of generating one megawatt or more—stand on croplands or pastures, according to new research.” A developer in Fresno says farmers can sell land to a solar company or sign a long-term lease so they have the option to return the land to crops in the future.