Agricultural Overhaul: Coachella Valley Farmland Shrinks as Dates Replace Grapes

On a late September morning, workers are busy harvesting dates at Oasis Date Gardens, a century-old orchard in Thermal.

Bob Harrick stands on a layer of date pits that coat the ground as he watches the workers.

“It helps keep down the dust,” Harrick says of the pits. “We used to get rid of them … Now there’s a company in L.A. that buys them and makes coffee out of them.”

Harrick, a former employee at Oasis and now vice president of sales under the orchard’s new owner, Woodspur Farms, said demand for dates and date products has never been higher. He and others like him see the crop as a key pillar of the Coachella Valley's agricultural future — a bright spot amid a punishing two decades for the sector.

A Desert Sun analysis of 20 years of crop data — including preliminary 2020 data — from the Coachella Valley Water District shows that local farmland has been on the decline for most of this century. Total Coachella Valley acreage farmed has dropped by nearly 16% in the last two decades, according to the data, reflecting a net loss of more than 11,500 acres of farmland — an area larger than the city of Indian Wells.

The lion's share of this loss was borne by the local grape industry. Total Coachella Valley grape land shrank by more than 7,800 acres between 2000 and 2020, according to the CVWD data, representing a nearly 60% drop. Rising regulatory and labor costs, as well as growing international competition, appear to have played key roles in the local grape industry's precipitous decline.

Amid these losses, dates — one of the valley's oldest crops — stand out as a rare area of growth. More than 2,600 net acres of date palms were planted in the last 20 years, according to the CVWD data, a 38% increase since the start of the century. Rising consumer demand for dates — eaten raw or in products from energy bars to coffee — as well as late-20th century land use and landscaping trends, drove the near-continual growth in the local date industry amid a slide in other crops.

While some worry that rising international competition could eventually leave the local date industry facing the same fate as grapes, others — such as Harrick — see a bright future for the storied desert fruit.

Grape Exodus

Grapes have played a central role in Coachella Valley agriculture since the earliest days of American settlement in the area. They became the area's biggest crop in the years following the completion of the All-American Canal in the late 1940s, which ensured a steady supply of Colorado River water for local agriculture use.

At the start of the 21st century, grapes were the Coachella Valley's largest crop by a wide margin, with nearly double the acreage of the area's second-largest crop, dates. Local farmers sold over $131 million worth of grapes in 2000, according to CVWD data. By 2020, that number was less than $74 million, while total local grape acreage was cut by more than half.

"It’s shrunk that much because the cost to produce (grapes) is not being gratified with the returns," said George Tudor, president of Tudor Ranch, a large grape grower in Mecca.

Tudor, whose family has been growing grapes in the Coachella Valley since the 1940s, said a combination of ballooning regulatory and labor costs and intensifying international competition have made grapes increasingly economically unviable in the last two decades.

"It's just made it more difficult to do business," Tudor said. "(For) this valley's grape production, the proof is in the pudding. The acreage, the boxes, it's just not there anymore."

"It's kind of happening to some other crops here too," Tudor added. "The writing's on the wall."

Other local crops that have notched significant drops over the last two decades include lettuce, broccoli, watermelons and cantaloupes, according to CVWD data.

Preliminary 2020 data indicates that total local lettuce acreage fell by more than 1,400 acres since 2000, a roughly 30% decline. Broccoli fell by just under 800 acres, an approximately 40% drop. Watermelon farmland shrank by more than 80% over that period, according to the CVWD preliminary data, reflecting a loss of more than 1,500 acres.

Cantaloupes, which occupied over 1,100 acres of local farmland in 2000, have not been grown at all locally since 2009, according to the CVWD data.

Despite these marked declines in some other crops, the drop in local grape acreage accounted for 67% of total farmland lost over the last two decades, according to CVWD data. The outsized impact on that crop is likely tied, in part, to its high labor requirements.

The High Price of Grape Labor

Table grape pruning, harvesting and other key crop management activities are all largely done by hand. This results in a greater demand for labor among grape growers, who subsequently face an outsized impact from related regulatory changes.

In the year 2000, California's minimum wage was $5.75 per hour. Today, it is $14 per hour for businesses with more than 25 employees and is set to increase to $15 per hour for those employers by 2022.

Until 2019, under an agricultural exception to standard overtime laws, California farmers only needed to pay overtime to workers who had accumulated more than 10 hours in a single day. With the passage of Assembly Bill 1066 in 2016, that exception will gradually be eliminated, lowered to an 8-hour overtime threshold by 2022 for farms with more than 25 employees.

Other new labor-related costs include additional mandatory trainings, such as heat illness prevention training, and mandatory rest and heat-recovery breaks.

In addition to these labor-related expenses, regulations such as the 2011 Food Safety Modernization Act added additional requirements for additional testing, audits and other processes that have driven up costs, particularly for growers of unprocessed produce like table grapes.

One study of 22 farmers in the San Joaquin Valley from Cal Poly San Luis Obispo found that, on average, these new labor and food safety regulations increased costs by 265% between 2012 and 2018.

Regulatory compliance costs were higher for grape-growers in the study, with one large table grape grower reporting a 303% increase in compliance costs between 2012 and 2018.

"I'd say our costs are three times eas(ily)," said Tudor, who said the study's findings were reflective of many of the experiences of local grape growers over the last decade.

Supporters of the last two decades' regulations and wage increases, such as Armando Elenes of United Farm Workers of America, say they were necessary to ensure a reasonable quality of life for agricultural workers.

"Regardless of the minimum wage, the cost of goods goes up no matter what and the rent goes up no matter what," added Elenes, secretary-treasurer of UWF, one of the largest farmworker unions in the country. "All (the minimum wage) is trying to do is catch up a bit."

Elenes said the additional trainings and rest breaks were basic health and safety necessities that had gone unaddressed in the past.

"We had to fight for training so the farmworkers would have training (on) how to deal with heat-related issues," he said. "They're dealing with, especially in the Coachella Valley, 110 degrees (or) 115 degrees and working outside."

"People have a total disconnect of what (the reality of farm work) really is," he added.

Critics of the last two decades' regulations, including many growers, say farm workers were already treated fairly by the majority of farms and that the higher costs make it difficult or impossible for California farmers to compete on the open market. Consumers and retailers, they argue, are highly price-sensitive to agricultural goods and will quickly shift to cheaper products produced at lower cost in less regulated markets.

"When a retailer … doing their best business practices, when they decide to buy a product, whether it be lettuce, oranges, grapes, bell peppers, whatever, for 25 cents cheaper from another country, the California farmer loses that business," Tudor said. "That's hard to swallow."

Agricultural imports of some crops like table grapes have increased dramatically over the last two decades.

In the year 2000, the U.S. imported $118 million worth of grapes from Mexico, according to the Observatory of Economic Complexity, a trade data platform created by MIT’s Media Lab. By 2019, that number had more than tripled to $382 million, according to the OEC.

Grape imports from Chile, the largest source of foreign grapes in the U.S., were up 85% to $586 million between 2000 and 2019, according to the OEC.

Taken together, local growers say some crops, especially grapes, have been rendered far less economically viable to grow in the Coachella Valley, driving the shrinkage in farmland over the last two decades.

"When this ag ground is gone," Tudor said, "it won't be ag ground again."

Date history and resurgence

Amid this agricultural shrinkage, one of the Coachella Valley's oldest crops has staged a comeback.

Dates were first grown in the Coachella Valley near the beginning of the 20th century, taken from seeds and offshoots imported from Middle Eastern countries such as Algeria and Egypt. In 1904, the federal government established an "agricultural experiment station" in Mecca to determine the viability of date crops in the valley.

The crop took off in subsequent decades, quickly turning the Coachella Valley into the largest producer of American dates with orchards running most of the length of the valley.

"Someone's lived in the valley long enough, they remember those date orchards," said Albert Keck, a major date grower whose family has farmed dates in the Coachella Valley since the early 1940s.

"In Palm Desert, Rancho Mirage, up and down both sides of Highway 111 in Indian Wells, those were all very large date orchards at one time," Keck said. "The campus of (College of the Desert) was a large date orchard. My grandfather used to farm that."

Keck, who serves as chairman of the California Date Commission and president of Hadley's Date Gardens, said remnants of these orchards can be seen throughout the Coachella Valley's retail and residential districts in the form of large, old date palms that were never removed.

He noted examples at the RV & Mobile Village mobile home park on Peterson Road in Rancho Mirage, the College of the Desert campus and at the intersection of Cook Street and Highway 111 in Indian Wells — although palms at the Cook Street intersection have since been replaced with groves of younger trees in, what Keck believes, is an homage to the original date farms there.

According to Keck, Coachella Valley date farming peaked around 1950, shortly before widespread residential development began to replace orchards.

"We saw the amount of palms decline, we saw the amount of acres decline," he said.

This shrinkage was accelerated, Keck said, by a new landscaping trend that took hold in the 1990s.

"We saw a huge bump in popularity of date palms for ornamental uses in the cities," he said. "And of course you see that everywhere now … up and down highway medians … whenever you see a new development in the valley, you'll oftentimes see date palms used as ornamental plants."

Keck said this demand for ornamental date palms was so great that it restricted the amount of trees available for commercial fruit growers.

"There was actually a shortfall of dates in the industry," Keck said. This drove up the price of dates and "basically triggered a large increase in new plantings."

The date grower said these factors likely played a significant role in the increase in local date acreage over the last 20 years as investors looked to capitalize on the undersupplied market.

Perhaps an even more important factor in the local industry's growth, however, has been changing consumer preferences.

Dates have risen in popularity among health-conscious consumers in recent decades, used in everything from sugar substitutes to energy bars, in addition to their popularity as snacks for raw consumption.

Market research from the California Date Commission cited by Keck suggests per-capita consumption of dates in the U.S. is now double what it was 25 years ago.

The market incentives to farm dates have been so strong that some local grape growers, including Tudor, have turned some of their former grape acreage into date orchards — although Tudor noted this is a difficult and lengthy process.

Woodspur Farms, an organic date grower based in Coachella, was formed in 2014, in part, to capitalize on these trends. It purchased a large portfolio of date farms in the Coachella Valley and in Yuma, Arizona, shortly after its formation, including Oasis Date Gardens.

The company, which is majority-owned by the Ontario Teachers' Pension Plan, sells dates to large food companies through its private-label business, as well as to a range of retail customers around the world in markets like France, Japan and Australia. It also sells date products, such as date paste used as a binder and natural sugar substitute in energy bars.

In a new and as-yet highly niche business, Woodspur even sells date pits to companies, such as the aforementioned Beverly Hills-based Korma, which turn them into a type of coffee substitute.

Harrick, the company's vice president of sales, declined to disclose other specific end-customer names, citing non-disclosure agreements.

Harrick said he attributed some of the growth in demand for dates to their appearance on a wide range of cooking shows and food blogs, driving customer awareness of their nutritional value. He said millennial mothers' increased emphasis on healthy eating has also boosted date consumption among young families, alongside a general trend toward healthy eating among younger generations.

"There's a lot of room for growth," said Harrick. "So, although we're very pleased with the percentage of growth over the last 10 years, you can see the potential of the future."

Could dates face the same fate as grapes?

Despite the strong demand, some date growers expressed concern that the same market forces that drove the decline of grapes could eventually erode the viability of Coachella Valley dates.

Unlike grapes, which tend to have key work requiring large amounts of labor concentrated in specific seasons, work on date crops is more spread out over the course of the year. While this can mitigate some of the impact of rising overtime expenses in the date industry, most farmers still consider dates a labor-intensive crop.

"The U.S. supply of dates is probably less than 5% of global supply," Keck said. "We're very vulnerable."

Keck said a significant portion of the growth in the global supply of dates in recent years has been driven by government sponsorship in nations such as Egypt and Saudi Arabia as part of those countries' attempts to establish stronger footholds in the growing market.

"The U.S. food supply that is grown domestically is under so much more government scrutiny and regulation than imported foods are," Keck said. "And that's (the) ultimate irony. That should be the reverse."

According to Keck, countries like Egypt and Saudi Arabia have the potential to flood the market with cheap dates in the coming years, supported by low labor costs and more limited regulations.

"Table grapes in the Coachella Valley are, I think, a case study in that," he said. "It happens gradually, the attrition is like a 'drip, drip, drip' and you turn around 20 years later and you don't have a table grape industry anymore."

Barring new legislation, this leaves the local date industry reliant largely on three factors to remain competitive in the coming years: higher yields per date palm, higher-quality products and, possibly, favorable consumer preferences.

"One advantage that we've had historically against competing nations in this country and in our growing district in Coachella Valley is we have very good soils, and we have an adequate water supply so far, and great weather," Keck said. "And those factors combined with this skilled labor force that we have in the industry yield high volumes and high-quality fruit."

"The cost (of labor) per day is mitigated by the yield of the palm," Keck added. "In these competing nations some of their average yields (per tree) are a quarter or a fifth of our yields."

He said that the difference in Mexican and American grape yields was likely not as pronounced as the difference between foreign and local date yields, leaving Coachella Valley grape growers without that key advantage.

"I think that's going to be more and more the case with dates is what I'm concerned about," Keck said. "These other nations are learning to produce better and better yields and their labor prices are not going up."

Keck said that mechanization could help lower labor costs in the date industry in the future, but noted that the fruit's relatively niche requirements meant that the transition would likely be much slower than for larger crops like corn.

"Instead of, let's say you need a crew of 100 people in a large Medjool date orchard to attend the dates, maybe a crew of 20 people can do the same thing with mechanical assistance." Keck said. "That's how I envision the future, where U.S. labor will be paid a lot more than international labor competitors, but they will be more productive."

Despite the challenges, Woodspur's Harrick said he was optimistic about the overall outlook for the local date market — particularly if consumer demand trends continue along their current path.

"We have customers that will buy particular variety (of date) offshore," Harrick said, "but they want a certain percentage of their product that they sell to the retail marketplace to say, 'Organically grown in the United States.'"

Harrick said while Woodspur was "always concerned about competition," the company felt customer preferences for higher-quality American dates would mitigate the impact of foreign competition.

Keck was slightly more skeptical of how enduring consumers' preference for American dates would be, saying he had not yet observed most younger Americans' "social justice" consciousness translating into a willingness to pay more for ethically-produced American goods.

Nevertheless, the third-generation date grower said he thinks the century-old local industry will likely find ways to adapt, and possibly thrive, in the years ahead.

"I'm optimistic," he said. "We have a good story to tell."

James B. Cutchin covers business in the Coachella Valley. Reach him at james.cutchin@desertsun.com.

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Source: Desert Sun

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