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With diesel near $7 a gallon, expensive energy, and regulatory costs of $1,600 per acre for lettuce farming, California farmers say family farms are losing competitiveness and being squeezed by state rules, costly transportation, and shrinking margins
A FOX report showed that lettuce production in California has come to symbolize the pressure faced by the state’s farmers, with regulatory costs cited at $1,600 per acre and profit margins between $100 and $200. On farms in Malibu and Moorpark, Larry Thorne and Craig Underwood report rising diesel, electricity, and state requirements as factors reducing the viability of farm work.
In the Malibu hills, Thorne’s family has been farming the land for nearly 80 years, in a region marked by Pacific fog and a Mediterranean climate. Today, he says this environment no longer offsets the economic pressure caused by fuel near $7 a gallon, energy tariffs, and state regulation.
About 40 minutes away, in Moorpark, Craig Underwood manages Underwood Family Farms, a 1,214-hectare property in Ventura County. A Navy veteran, at 83, he says he has faced droughts and market crises, but claims he has never seen a box of strawberries cost $70 or lettuce carry such a high regulatory cost per acre.
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Lettuce Bears the Brunt of On-Farm Costs
Underwood states that California’s rules add about $1,600 per acre to lettuce cultivation, while farmers’ margins typically range between $100 and $200. For him, the combination of labor costs, fuel, and demands from Sacramento has made the state almost uncompetitive.
The pressure also appears in transporting food to market. Thorne recalls that he used to spend about $60 to fill the tank of the pickup truck used to transport vegetables, while now the cost reaches almost $200.
The farmer states that this cost is not restricted to the producer and ultimately weighs on the price paid by the consumer. In his assessment, the fuel used to transport food to the city significantly increases the final product’s price.
Underwood also points to transportation as a central part of the problem. He states that for every head of lettuce sold, there is not only the cost of cultivation but also expenses for harvesting, refrigeration, storage, and transport to the shelf.
Diesel, Energy, and Electrification Pressure Producers
Thorne states that the California government ignores the energy issue and that, over the past four decades, the agricultural sector has followed the logic of grow or disappear. For him, large producers have been better able to survive this pressure, while small farmers face greater difficulty.
The farmer says that seeds, fertilizers, fuel, and labor have risen by at least 25% in three years. He also recalls that when he was younger, diesel cost five cents a gallon.
The two farms are of different sizes but face similar demands regarding energy and adaptation. Farmers report that, in addition to expensive diesel, they are pressured to replace tractors and equipment with electric alternatives, even with doubts about the grid’s capacity.
Thorne states that California does not have an electrical grid or sufficient energy sources to sustain this transition. He also criticizes the closure of oil refineries in the state and describes this set of measures as a process that displaces lower-income individuals.
Farms Maintain Diversified Production
Thorne Family Farms in Malibu welcomes customers on weekends to choose fresh produce and pantry items. The farm remains the last one in a town marked by millionaire mansions, while nearby neighbors have even allowed Thorne to use their land for cultivation.
At Underwood Family Farms, the public finds pick-your-own options year-round, seven days a week. The property offers cabbage, raspberries, turnips, various types of lettuce, beets, lemons, blackberries, fresh flowers, and attractions related to the spring festival.
The dedication to the land appears in the accounts of both farmers, even in the face of falling margins. Underwood states that each year he tries to cut costs and earn a little more, but expenses rise faster than possible reductions.
He compares the current moment to the 1980s, when many farmers went bankrupt. In his assessment, many producers are once again feeling similar pressure, now marked by high costs, low prices, and low demand.
State cites global oil market
Governor Gavin Newsom’s office forwarded the comment request to the California Energy Commission. A spokesperson stated that the current pressure on fuels results from the disruption in the global oil market caused by the war in Iran and the effective closure of the Strait of Hormuz.
The commission also cited the Strait of Hormuz as a route through which about 20% of the world’s oil supply passes. The response stated that investments in electric vehicles, clean fuels, grid reliability, and clean transport help protect consumers from price shocks.
California pushed for legislation for a 100% electric future by 2035. Last year, the US Senate and President Donald Trump blocked the measure in a historic vote.
Producers advocate for refineries and nuclear energy
Thorne and Underwood state that it would be about 30% cheaper to operate outside California, but they do not intend to abandon their family histories. Thorne says he would not be able to grow the same products in Nevada, citing strawberries, avocados, and oranges as examples linked to the local climate.
Underwood defines agriculture as both a lifestyle and a business. He states that the activity is difficult, requires a love for the work, and has gone through tough times before.
Both advocate for changes in state energy policy. Thorne calls for oil refineries and nuclear reactors, while Underwood states that he would like the state to represent the average consumer more than companies like Edison and PG&E.
At the end of the chain, lettuce remains an example of the accumulated weight between field, transport, and shelf. For farmers, the product that reaches the shopping cart carries not only cultivation but also diesel, energy, state regulations, and logistical costs.
With information from Fox Business.
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