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CASE STUDY 6 Tree Fruits, Walnuts, and Vegetables in California: The Ferrari Farm . ~ HE FERRAR! FARM consists of 223 acres and is located near the town of I Linden, California, east of Stockton. It is located in an alluvial plain near the confluence of the Sacramento and San Toaquin rivers, at an eleva- tion of just a few feet above sea level. GENERAL DATA The Ferraris grow 22 acres of vegetables, including, currently, onions, broccoli, sweet corn, cabbage, and squash; 126 acres of nuts, including 111 acres of walnuts (of which 41 acres are produced organically) and 15 acres of almonds; and 75 acres of various tree fruits, including 12 acres of apples, 10 acres of plums, 7 acres of apricots, 1 acre of Asian pears, and about 42 acres of peaches and nectarines combined. The operators (George Ferrari and his son, Wayne) attempt to use organic methods on all of their crops, both as a matter of personal preference and out of concern for the health of consumers and those working in and around the orchards. Most of the farm is certified as organic by the California Certified Organic Growers. Currently, about two-thirds of the total value of crop sales are sold as organic ($300,000 of the total $450,000~; the remainder is produced using an integrated pest management (IPM) program that includes some use of pesticides. Produce from this remaining acreage is sold in conven- tional markets. This case study points out several areas in which the Ferraris have taken innovative approaches: (1) the use of nonpesticide insect control in fruit production on a commercial scale and, specifically, the use of experimental biological controls, a pheromone and coaling moth granulosis virus; (2) the successful use of an IPM scouting and advisory service; (3) a successful 324

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THE FERRARI FARM 325 fertility program using no chemical fertilizers in most of their orchards; and (4) diversification of the species grown on the farm and the marketing strategies necessary to sell them (Table 1~. Climate The average precipitation in the Stockton area is about 14 inches (Table 2~. Almost no rainfall occurs from June through September; more than 2 inches per month normally fall in December through February. Tempera- tures in the area are hot in the summer (with monthly normal maximum temperatures exceeding 80F in May through September); the winters are mild (with monthly normal minimum temperatures above 35F). This cli- mate is excellent for growing tree fruits and nuts, as long as irrigation can be provided during the growing season. According to Wayne Ferrari, how- ever, spring frost, which sometimes occurs as late as April 30, has damaged crops on occasion. PHYSICAL AND CAPITAL RESOURCES Soil Soils in the area are highly productive (class 1) Wyman clay loam soils. The topography is flat, facilitating gravity irrigation. Buildings and Facilities The Ferrari Farm has an extensive set of buildings, including the follow- ing: a 50-by 75-foot repair shop containing a full set of metal-working equip- ment and machine maintenance and repair facilities; a cooling plant with two cooling rooms 32-by-32-by-12 feet and 32-by- 20-by-12 feet) for immediately cooling the fruit at harvest and storing the fruit after packing and prior to shipping; these rooms can hold 200 and 125 storage bins, respectively (each bin is 4-by-4-by-2 feet); a packing house (with a 40-by 100-foot new addition plus an older facility) containing various kinds of sorting and packaging machines and processing facilities for shelling nuts and drying fruits; a 40-by 60-foot roof shed; a 30-by 60-foot walnut cracking shed; a 36-by 80-foot storage building; a lean-to building for tractors and other equipment; and an office in Wayne Ferrari's home. Machinery The Ferrari Farm has an extensive inventory of machinery and equipment, including the following major items: a crawler tractor; three utility tractors

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326 TABLE 1 Summary of Enterprise Data for the Ferrari Farm Category ALTERNATIVE AGRICULTURE Description Farm size 223 acres Labor and The farm is operated by the Ferrari family (4 adults working full management time and 2 teenagers working part time) plus 12 regular year- practices round hired workers and 8 regular seasonal hired workers. Additional seasonal workers are hired as needed. The farm raises a diverse combination of fruits, nuts, and vegetables, and requires intensive management. Wayne Ferrari manages the orchards; his wife does the bookkeeping; and his father manages the vegetable production. Both men and Wayne Ferrari's mother share in the management of packing and marketing the produce. Marketing strategies About 10 to 15 percent of the farm's crops have been sold at the San Francisco farmers' market for the past 30 years; there are many repeat customers. Premium fancy-grade produce is sold to wholesalers, mostly organic specialty markets; a 5 percent premium price is charged on organic walnuts. This produce is sold at about a constant price throughout the season in an effort to introduce some stability into the market. Weed control practices Strip-spraying with herbicides is used in some orchards, including glyphosate for Johnsongrass. In organic orchards, weeds are flail-chopped, dished, or hand-hoed. Insect and nematode Codling moth granulosis virus (CMGV) is used successfully on 5 control practices acres of apples with 2 to 3 percent worm damage on Red Delicious, 1 percent on Granny Smith apples. It has not yet been effective against coaling moths in walnuts. Other organically approved substances have not been as effective as CMGV or chemical pesticides used under the advice of an IPM pest control adviser. The application of compost is credited for controlling nematodes. Pheromone materials used on an experimental permit have been found to be effective against oriental fruit moth. CMGV has been found to require very thorough coverage of trees and more frequent applications than chemical pesticides. The application of predacious mites to fruit trees has been reported to be effective against phytophagous mites. Disease control Bordeaux solution is applied weekly during high humidity to practices control blight. Disease-prone crops are withdrawn from production and replaced with disease-resistant species. Soil fertility The Ferraris apply 275 pounds N/acre to conventional walnuts; management gypsum is added when soil tests indicate a need for calcium. Vetch green manure is used on certified organic acres, as is 2.7 tons/acre composted steer manure. Supplemental foliar spray with a kelp fertilizer is used when crops are stressed by pests. Irrigation practices Flood irrigation of orchards and vegetable fields is used. Water comes from six wells, pumped from a 130- to 150-foot depth. Crop and livestock Yields vary by crop. Detailed yield data for six kinds of tree fruits yields (several varieties of each) and walnuts, almonds, and fresh vegetables were not available. Financial performance Cost and return data on individual enterprises and on the farm's overall operation were not available. Unobtrusive measures indicate the farm is prospering: approximate doubling of packing shed facilities in the past 5 years financed internally (there is no debt on machinery or buildings); the acreage owned has increased 9 percent since 1982; and the farm is supporting two families.

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328 ALTERNATIVE AGRICULTURE (60 to 70 horsepower); three row-crop tractors, ranging from very small to 80 horsepower; five forklifts; three pickups; a 1-ton flatbed truck; a 16-foot van; a refrigerated, 28-foot semi-truck and trailer; a backhoe; a sweeper (for nut harvesting); a nut harvester (tree-shaker); a bulk trailer with a nut drier; a compost spreader truck; a pull-type compost spreader; a row-crop sprayer; a speed sprayer; a nut huller; various packing house equipment; a biomass burner that generates up to 500,000 BTUs of heat for the packing shed using walnut shells as fuel following a 90-second warmup with propane; and miscellaneous other machinery and equipment. MANAGEMENT FEATURES Soil Fertility The Ferraris use different fertility programs on the conventional and cer- tified organic portions of their farm. For example, 275 pounds of nitrogen are applied each year (125 pounds in the spring and 150 pounds in the fall) to the conventionally grown walnuts. In a wet spring, calcium nitrate is broadcast in the orchards; in a dry spring, ammonium sulfate is used. Urea is used in the fall. If calcium is found to be deficient based on the results of soil tests, gypsum may be applied; in 1985, for example, the Ferraris used 2 tons of gypsum per acre. A much more complex fertility program is used on the certified organic acres. About 2.7 tons of composted steer manure are applied at a cost of $93.00 per acre compared with about $70.00 per acre for the conventional chemical fertilizer ammonium sulfate, which has less nutrient value than compost. Spreading compost (with a spreader truck) requires about 16 minutes of labor per acre, compared with about 4.S minutes per acre for labor to apply chemical fertilizer, according to Wayne Ferrari. The compost used on the farm is purchased from various local firms specializing in its production. Ferrari also reported that the analysis of compost provided by one of these firms is as follows: 1.7 percent nitrogen, 1.6 percent phosphorus (P2O5), 2.5 percent potassium (K2O), 2.4 percent calcium, and 1.3 percent magnesium. Purple vetch (Vicia benghalensis) is used as a green manure crop in areas that are not overlain with permanent sod. A material made from kelp is applied during times of plant stress when pest populations are expanding rapidly. Farmers who use this method con- tend that the foliar spray does not reduce pest populations but instead stimulates plant growth so that the damage done by the pests invokes less stress on the crop. The relationship between foliar feeding and pest damage has not been experimentally established, however (A. Beriowitz, correspon- dence, 1986~. Fertility management practices differ for the various crops, depending on soil conditions, the health of the trees, and other factors. Because of the large number of different species being produced and the resulting com-

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THE FERRARI FARM 329 plexity of the fertility program, such activities require a high level of man- agement. Tillage, Crop Rotations, anti Irrigation No special features were noted in the methods used by the Ferraris for planting the orchards or for tilling cronland except for the rather high level of crop diversification noted earlier. The diversified cropping pattern is primarily a risk management strategy. By diversifying the Ferraris reduce the risk of crop loss from various pests, adverse growing conditions, and changes in the market. The family is constantly identifying areas of its orchards that appear to be unprofitable and then replanting new varieties. When trees are removed from an orchard, vegetables are usually grown on the bare ground for a period of 2 to 3 years prior to replanting. Moreover, vegetable production is often continued in the young orchard before the trees reach maturity. In this way, some income is earned from that land before the trees begin bearing. The Ferraris produce more than one-third of their walnuts without the use of pesticides; these nuts are sold in the organic markets. All of the farm's other crops are produced with as few pesticide applications as pos- sible. Whenever it becomes necessary to apply a synthetically formulated chemical pesticide to prevent the loss of a crop, this acreage is removed from the organic market for 2 years in compliance with state law. The state does allow certain other chemicals, such as Bordeaux solution (lime, water, and Conner sulfate! to be used in organic orchards. Currentiv chalet two- 0 ---rig r~ -~~ ~~~~ ~~~~~~~ ~~~~~~ ~~-~~ 1 1 ~ O }' . ~ . ~ ~ . ~ ~ thirds of the Ferrari tree-fruit orchards and vegetable crops are produced without synthetically formulated chemical pesticides. The exact acreage varies from year to year. The Ferraris irrigate their alternative orchards either with sprinklers or through gravity irrigation; they use sprinklers on all of their conventional orchards. Wayne Ferrari says that he applies less water than suggested by his hired pest control adviser because he prefers to save money on the cost of pumping the water. (Irrigation water for the farm is pumped by electric power from a depth of 130 to 250 feet from six irrigation wells ranging in depth from 350 to 500 feet.) He also reports that the water table is subsiding because of the intensity of irrigation in the Stockton area and observes that "every few years we have to add another 10 or 20 feet of column to the pumps." The sustainability of this practice is a concern. Weed Control In their conventional orchards, the Ferraris spray herbicides (primarily glyphosate) to control weeds, most notably lohnsongrass. In their alterna- tive orchards, weed control methods include flail chopping and dishing between the rows of trees and hand hoeing of weeds growing close to the trees.

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330 ALTERNATIVE AGRICULTURE Insect anti Nematode Control The Ferraris control insects and nematodes on their conventionally grown and alternative acreages with a variety of methods. A pest control adviser is hired to scout the entire farm and provide advice on the timing and necessity of spraying as pest populations approach or exceed economic threshold levels. Wayne Ferrari decides which material is to be applied. On the conventional acreage, phosalone is applied to control coaling moths and aphids, especially on apples that have been grown on certain susceptible varieties of root stock; methidathion is used to control scale; and propargite is used to control mites. Nematodes are not considered a problem in walnut production. The Fer- raris use compost in the belief that it may help control nematodes on their other acreage, although the efficacy of compost application for nematode control in orchards has not been established. On their alternative acreage the Ferraris use a number of biological con- trols and organically acceptable pesticides, as wed as other methods of insect and mite control.* Occasionally, beneficial predators are released on the advice of the pest control adviser. The Ferraris also apply various mate- rials approved by the state law governing organic farming, including dor- mant oils, pheromones, and various biological control materials. For exam- ple, the Ferraris are using a pheromone, available on a U.S. Environmental Protection Agency (EPA) experimental use permit, to control oriental fruit moth. This material is distributed through small wirelike devices, four of which are attached to each tree. The pheromone emitted by the wires saturates the chemical receptors on the antennae of the male oriental fruit moth, making it difficult for him to find the female and breed (Weakley et al., 1988~. The Ferraris have found this material to be very effective in controlling the oriental fruit moth. The labor cost for attaching the wires to the trees is approximately $0.25 per tree; the cost of the material under full-scare commercial production is not yet known. Another biological control measure used by the Ferraris is the coaling moth granulosis virus (CMGV), which is also used under an EPA experi- mental use permit. Scientists at the University of California are performing the safety tests necessary for EPA registration of CMGV. Indications to date are that the virus is highly specific and innocuous to anything but the coaling moth and some closely related insect species (Kurstak, 1982~. Several problems that must be overcome, however, include the development of a sunscreen material to prevent CMGV from degrading *Many materials permitted under the California organic farming legislation are, in fact, pesticidesfor example, sulfur, Bordeaux solution, Bacillus thuringiensis, ryania, and so on. However, these materials are distinguished from synthetically formulated chemical pesticides because they are derived from naturally occurring substances.

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THE FERRARI FARM 331 in sunlight and practical ways to reduce the number of applications re- quired. (These are common formulation challenges faced by developers and manufacturers of agrichemicals.) When it has been necessary to mix CMGV with chemical insecticides, tests have shown that CMGV is compatible and does not deteriorate when mixed with most of the chemicals that are commonly used. As a result, it can be applied along with other materials, thereby reducing the number of separate sprays that would be required if CMGV hac! to be applied bv itself (A. BerIowitz, correspondence, 1986~. 1 1 ~ The Ferraris report that they applied CMGV to 5 acres of Payne English walnuts (on black walnut root stock) and 6 acres of apples (2 acres of Red Delicious and 4 acres of Granny Smith). They observed 2 to 3 percent worm damage in the Red Delicious and 1 percent damage in the Granny Smiths. The material was not effective in controlling coaling moth damage in the walnuts, but they attribute this failure to poor methods of application. (They say that they were not as careful as they should have been in obtaining complete coverage in the walnuts.) In places where CMGV could not penetrate (because it is not a chemical pesticide with fuming and contact action), such as between tightly clustered apples, worm damage was higher. There were three flights of the coaling moth; CMGV was applied three times per flight. The applications were timed to occur 7 to 10 days prior to the peak, at the peak, and just beyond the peak population of the moths. Applied at the proper times using a method that achieves total coverage of the foliage, CMGV has been found to be highly effective in controlling coming moths on experimental blocks of operating farms (Falcon et al., 1985~. Falcon et al. (1985) compared the effectiveness of CMGV with a widely used alternative method (oil) and a conventional method (the application of chemical pesticides) in an orchard near the Ferrari Farm. The results of this field experiment suggest that CMGV provides approximately the same pro- tection against coaling moth at about the same cost for materials, but that it also requires more frequent applications. Another element of the Ferrari pest control program on the farm's alter- native acreage is the periodic release of predacious mites. These mites prey on phytophagous mites that feed on the leaves of fruit trees, sometimes defoliating the trees. The beneficial predator mites are introduced to the orchard in a novel way: the Ferraris purchase bean plants (each about 12 inches tall) infested with predaceous mites (about 20 to 30 per plant) from an insectary. Wayne Ferrari and his workers then place one of these bean plants on a branch at the northeast side of each tree (about 100 trees per acre). The bean plants are placed at about chest height. The predaceous mites are bred to be resistant to sulfur and miticides. Wayne Ferrari reports that the efficacy of this procedure is "fantastic" and that the predators effectively control the phytophagous mites. The cost of this material ($25.00 per acre) is about the same as the cost of chemical

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332 ALTERNATIVE AGRICULTURE miticides such as propargite; however, Ferrari estimates that the labor cost of applying the infested bean plants would be somewhat higher (data are not available) than spraying miticide on the orchard. In addition to applying CMGV material to an experimental plot of apples, the Ferraris also used this material on 3 acres of their conventional apples. Before applying CMGV, they had found the population of coaling moth to be increasing very rapidly in one of the orchards just a few days prior to harvest. They were faced with a choice of either picking the crop early, thereby sacrificing the optimum sugar content of the apples, or spraying with the chemical pesticide phosalone, which would have required a 2- week delay before the toxicity of the pesticide had subsided sufficiently to legaDy permit workers to enter the orchards for harvest. This delay would have meant postponing harvest beyond the optimum stage of maturity. Instead of choosing either of these options the Ferraris applied CMGV to this orchard. Because there is no reentry delay time with CMGV, it was possible to send harvest crews into the orchard at the optimum harvest time. Ferrari has observed that a major advantage of CMGV is that, as in the above instance, it can be used close to harvest; it is one of the few pesticide materials currently available for such use. He recognizes, however, that conventional producers are not likely to favor CMGV for general use during the growing season because of the greater number of applications required as compared with chemical insecticides. Disease Control Blight is one of the major diseases of walnuts. Late-flowering varieties (such as Hartley) tend to escape blight infection because humidity is typi- cally low later in the season. Early varieties, however, are treated with a 1 percent Bordeaux solution every 7 days as Tong as the humidity is high and the walnuts are small. When the humidity is low or the nuts are large, blight is no longer a problem. Labor The labor force on the Ferrari Farm consists of four adult family members (Wayne; his wife, Irene, who takes care of the bookkeeping; his mother, Italia, who works in the packing shed and takes sale orders from buyers; and his father, George, who oversees the packing shed and vegetable pro- duction); two teenage children who work in the packing shed during the summer months and on weekends; 20 regular hired workers (reduced to 12 in the winter months); and miscellaneous seasonal workers as needed. Wayne Ferrari provides the bulk of the management of the orchards, including irrigation scheduling, pest control, fertility management, and planting and harvesting scheduling. Wayne and George Ferrari jointly se- lect the cultivars of crops to be planted, deal with buyers, and make other

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THE FERRARI FARM 333 day-to-day decisions. Both of these men work virtually year-round on the farm, with their most intense schedule occurring during harvest. PERFORMANCE INDICATORS Yield Data Because of the large number of crops grown and the diversity of cultivars of each crop, it is not practical for the Ferraris to maintain accurate produc- tion and yield data on the various orchards and segments within orchards or in the vegetable plots. Consequently, no specific yield data are available. Further research is needed before the yield impact profitability of CMGV will be verified for various growing conditions and locations. It is well established, however, that CMGV can be effective and profitable but only when applied with precise timing in a thorough coverage of trees, as a part of a comprehensive IPM program that ensures viability of various natural predators, and in combination with other aspects of good management. Financial Performance Although cost and return data are not available for the Ferrari Farm as a whole, several specific items of information were gathered and generaliza- tions can be made on the basis of interviews conducted with the family in 1982 and 1986. In general, costs and returns vary depending on the crop grown and on whether conventional or alternative methods are used. For example, the Ferraris pay dues of 0.5 percent of the gross value of sales from all acreage certified as organic (currently about $1,500) to the certify- ing organization, California Certified Organic Farmers. Approximately one- third of the walnut acreage of a total 111 acres are certified as organically grown; the Ferraris receive a price premium of $0.04 per pound on the organic walnuts sold in the shell. Shelled walnuts brine a $0.10 ner Bound (5 percent) premium. V ' 1 1 The Ferraris use three market outlets for their fruit: (~) wholesale outlet firms, which handle the premium quality produce; (2) the San Francisco farmers' market and a few other direct marketing outlets, at which they seD Produce that does not meet the premium grading standards; and (3) the dried fruit processing facility, where cull fruit (particularly insect-damaged fruit) is dried for marketing. The Ferraris sell their premium produce to several different wholesalers, particularly in the Los Angeles, San Fran- cisco, and Oregon markets. Most of these wholesalers specialize in organic produce; the Ferraris sell the fruit from their conventionally produced acre- age to conventional wholesalers. Approximately 10 to 15 percent of the Ferraris' farm products are sold through the San Francisco farmers' market and six small stores; currently, there are no restaurants included in their direct marketing network. Each Friday the Ferraris load their refrigerated van with various fruits and vege-

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334 ALTERNATIVE AGRICULTURE tables and, early on Saturday morning, they drive to the San Francisco farmers' market to sell this produce. They also make deliveries to a few stores that have telephoned orders to them in advance. The Ferraris report that they have been marketing their produce in the San Francisco area for approximately 30 years, with a large number of repeat customers. Because the produce that they are selling is slightly below the grading standards for premium products, they are able to give these customers a good quality product at a bargain price. Over the years, Wayne Ferrari reports that he has made decisions to plant additional varieties of fruits and vegetables in response to questions and requests from his customers in the San Francisco market; he has also based such decisions on evidence in the wholesale markets suggesting expecta- tions of profitable enterprises in years to come. His management strategy is extremely diversified in every aspect: the number of crops he produces, the farm's marketing outlets, sources of compost, fertility management methods, and pest management strategies. One of the underlying goals guiding the Ferrari marketing strategy is a desire to promote stability in the market. They prefer to see the prices of produce remain relatively constant throughout the season rather than ex- hibiting wide fluctuations from month to month. They also prefer to avoid the inevitable haggling required in dealing with wholesalers and other buyers when prices fluctuate widely. Consequently, the Ferrari pricing strat- egy is to set a price for each of their various products when harvesting begins and to try to maintain that price throughout the harvest season and for as Tong as the product is available in storage. They realize that at times in the season, when prices are abnormally high, the wholesalers make significant profits because of this pricing practice. This fact does not appear to bother the Ferraris, however; they are willing to allow such profits in the interest of encouraging some degree of stability in the market and avoiding the haggling over price. The premium prices received for certified organic produce do vary throughout the season. For example, at some points the Ferraris may receive a premium of $2.00 to $3.00 per box above the conventional price for Granny Smith apples; at other times the price may be $1.00 to $2.00 per box below the conventional price. Despite the lack of detailed accounting data, there are some indirect indications of the Ferrari Farm's financial performance. First, the farm is expanding modestly based on earnings and savings, without incurring debt. Since 1982 the acreage of the farm has expanded by 18 acres through the purchase of an additional field. Second, the capacity of the packing plant has approximately doubled, both in floor space and in the number and sophistication of the machines which it contains. Each new item of machin- ery has been purchased with cash rather than credit. Expansion financed by earnings constitutes real growth, which is one of the most reliable indi- cators of good financial performance.

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THE FERRARI FARM 335 REFERENCES Falcon, L. A., A. Berlowitz, and J. Bradley. 1985. Progress report on pilot studies designed to demonstrate how pear zone growers may improve pest and disease control and frost protection through better timing and management. Department of Entomological Sci- ences, University of California, Berkeley, December 28. Kurstak, E. 1982. Microbial and Viral Pesticides. New York: Marcel Dekker. Weakley, C. V., P. Kirsch, and R. E. Rice. 1988. Control of oriental fruit moth by mating disruption in California peach and nectarine orchards. Pp. 541-549 in Global Perspectives on Agroecology and Sustainable Agricultural Systems: Proceedings of the Sixth Interna- tional Scientific Conference of the International Federation of Organic Agriculture Move- ments, Vol. 2, P. Allen and D. Van Dusen, eds. Santa Cruz, Calif.: Agroecology Program. University of California.