Business

Sunday, Sep 30 2012 05:00 PM

Higher temperatures bring new struggles in Calif. wine country

  1. 1 of 4

    By Serene Fang/ California Watch

    Bing cherries are harvested from Jeff Colombini's orchard in Lodi, where a shorter chilling season has resulted in many stunted, half-grown blossoms.

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  2. 2 of 4

    By Serene Fang/ California Watch

    Erratic blooms on Lodi Farming's cherry trees are a sign of "stresses that come with not enough chill hours, says farm director Jeff Colombini.

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  3. 3 of 4

    By Serene Fang/ California Watch

    Cherries are sorted at the Delta Packing Co.

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  4. 4 of 4

    By Serene Fang/ California Watch

    This year, Lodi-based Delta Packing Co. saw another 50 percent drop in cherries from previous years.

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BY MARK SCHAPIRO Center for Investigative Reporting

Farmers have always been gamblers, long accustomed to betting on the probabilities of the weather. But for the Napa Valley, where the temperatures have been ideal for the wine industry, the changes could be significant.

"They're used to rolling the dice every year," said Stuart Weiss, a conservation biologist and chief scientist at the Creekside Center for Earth Observation, which assists growers and municipalities dealing with the disruptions caused by the changing climate. "Now, though, climate change is stacking the dice."

Over the next 30 years, Weiss estimates, the temperature in the Napa Valley will rise by 1.8 degrees -- an 80 percent jump over previous rates, which were about 1 degree every three decades since temperatures were first recorded in 1896.

He has turned worries about climate change into a business opportunity: His other company, Viticision, consults with growers facing the shifting conditions on their land.

Weiss, who has been studying butterflies since his days at Stanford University, realized eight years ago that what he was learning about the lepidoptera family could be applied to wine grapes.

He noticed that the processes that a caterpillar larva uses to metabolize energy drawn from the sun and water prior to its emergence as a butterfly were similar to how a grapevine metabolizes the same elements before producing a fully formed wine grape.

Alterations in the California climate have prompted the insurance industry to assess the potential damage and its financial exposure.

The nation's crop insurance system, a hybrid of private insurers backed by the U.S. Department of Agriculture's Risk Management Agency, has been paying out steadily increasing amounts for weather-related damages across the country, according to the Congressional Research Service -- from $2.1 billion in 2000 to a record-breaking $12.1 billion last year. This summer's drought in the Midwest is expected to further catapult insurance payments.

Although it's difficult to distinguish how many extreme events would have occurred without the atmospheric concentration of carbon dioxide, the Risk Management Agency now has identified climate change as one of the major risk factors for U.S. agriculture.

In a 2010 report, it paid particular attention to the vulnerabilities of California, which produces 95 percent of the country's apricots, almonds, artichokes, figs, kiwis, raisin grapes, olives, cling peaches, dried plums, persimmons, pistachios and walnuts.

"Since the production of these commodities is so concentrated into one geographical area the climatic impacts in these agricultural markets could be profound," the report concluded.

The agency even suggested an adaptation strategy that sounds like the breeding efforts under way at nurseries across the Central Valley: more research into "drought-tolerant, heat-tolerant, and other crop varieties better suited to the changing conditions."

Water stresses

The California office of the Risk Management Agency is considering whether year-round farming is a reasonable risk for the agency to assume in the Central and Imperial valleys, where water stresses are intensifying.

In the Central Valley, the agency is considering requiring farmers relying on nonirrigated water to fallow some land during the summer months to hedge against potential losses when water supplies fall short.

And last year, the agency withdrew its insurance rating for parts of Imperial County, which it determined was uninsurable for proposed wheat farming due to concerns about the reliability of the water supply.

The high volatility associated with climate change prompted a team of Silicon Valley entrepreneurs to found the first insurance company to focus exclusively on insuring against swings in the weather.

David Friedberg was a corporate development executive at Google before founding The Climate Corporation in San Francisco in 2006, as farmers found themselves at the front lines of climate change.

One likely result of the atmospheric tumult, he said, is rising food prices.

"Farmers are having to hedge and pay for insurance claims," he said. "That increases the price of food, and when they experience losses, we and others pay them for those losses, but that also means their food is not being produced."

Napa vintners already are feeling the effects of the changing odds. In 2010, the wine industry had one of its worst years on record when days of record-breaking heat in August were followed by a few freakish days of frost.

"You're ripening earlier in a warmer time of the year under a warmer climate, so you're getting a double whammy," said Weiss. Even just a week's difference, he said, can have an impact on the quality of a cabernet sauvignon.

Jeff Yasui, director of the California office of the Risk Management Agency, said one sign of the growing stress in wine country is that over the past four years, the number of wine grape growers who increased their insurance coverage from the base-level policy -- which covers half of all losses -- to more substantial, and more expensive, protection increased from 28 percent of all policies to 40 percent this year.

Cherry lessons

For a look into the future, look at the state's cherry crop.

Last April, the cherries were blooming in the Colombini family orchard in the San Joaquin Valley, their blossoms a signal that the harvest would be coming in six weeks.

But there was trouble lurking under those delicate blossoms. Jeff Colombini, director of the family company, Lodi Farming, pointed to the erratic blooms on his trees -- a blossom here and there but many stunted, half-grown blossoms. That is a sign, he said, of the "stresses that come with not enough chill hours."

Most of the highest-quality cherry varieties in the state are tuned for a November or December chill, which functions to slow down the metabolism of the nascent fruits and thus elongates the ripening process that comes with the onset of warmer weather.

For a perfect California cherry, the trees need 1,200 to 1,400 hours of "chill time." But Joseph Grant, a UC Cooperative Extension farm adviser based in Stockton, said that lately, cherry growers have been seeing more like 1,000 to 1,100 hours per season.

Another factor may be the fog: Early results from a study at UC Berkeley's College of Natural Resources suggest that a lack of the usual fog hours also might be contributing to overheating of cherry buds.

While the overall cherry crop recovered late in the season, the effect of the shortened chill, according to Grant, is declining quality of California cherries. They're shrinking in size, and the extended ripening time means the cherries are not as firm.

Until 2000, there was no government-subsidized insurance program for cherry farmers. But that year, according to Yasui, of the Risk Management Agency, farmers began responding to the turbulent weather by requesting that the USDA extend them coverage. Since then, there's been a steady rise in cherry farmers obtaining climate-related insurance.

Last year, California cherry growers received a record $22.5 million in crop insurance payouts -- sending crop insurers into the red. For every $1 paid into the system for cherry policies that year, $1.60 was paid to farmers. The USDA paid out almost $8 million to subsidize the losses.

"What's happening," Grant said, "is that the climate here around Stockton is looking more and more like the climate down in Bakersfield."

This story was produced by the nonprofit Center for Investigative Reporting, the country's largest investigative reporting team, in collaboration with KQED public radio. Mark Schapiro can be reached at mschapiro@cironline.org.

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