Almond orchards are proliferating in the Stanislaus County foothills, land long used for cattle grazing. Sasha Khokha/KQED
Almond orchards are proliferating in the Stanislaus County foothills, land long used for cattle grazing. (Sasha Khokha/KQED)

Cattle Ranchers Lock Horns With Almond Investors

Cattle Ranchers Lock Horns With Almond Investors

Save ArticleSave Article

Failed to save article

Please try again

Kathy Smith actually heard the almonds coming before she saw them.

“It’s 11:30 at night, we are trying to sleep, and those tractors are ripping the land right outside our bedroom,” she recalls.

She woke up to find giant patches carved out of the grassy foothills above her house, making way for new almond trees.

Smith is rolling along in a golf cart, calling her 35 cows to dinner. “Come boss! Come boss!” she brays.

“That’s how my father did it. That’s how I do it," she says. "And my mother used to do it by coming out and playing on her trumpet.”


Smith’s family has grazed cattle on this ranch near Oakdale, southeast of Modesto, since 1943.

But now she’s worried that an explosion in investor-backed almond orchards might threaten that livelihood.

A hillside adjacent to Kathy Smith's ranch, recently planted in almonds.
A hillside adjacent to Kathy Smith's ranch, recently planted in almonds. (Sasha Khokha/KQED)

More than 110,000 acres of almonds have been planted in Stanislaus County. And it doesn’t look like drought will put much of a dent in the boom. U.S. Department of Agriculture stats that came out this week predict just a 1 percent drop in the California almond harvest over last year.

“I can’t tell you how upset I am to have to look over there every single day and see what’s happening to those beautiful foothills. It’s sickening,” says Smith, who had to drill a new well after her household well went dry four years ago. She blames almond growers for sucking down the groundwater.

“It was a shock to the whole neighborhood,” says Smith’s neighbor, Gail Altieri. “It’s almost like the Confederate army is coming towards the east, and we didn’t see their bushy little heads until they were there. ”

Altieri raises mules and cattle, and lives in a log cabin decorated with cowhides and saddles. Oakdale bills itself the "Cowboy Capital of the World." But Altieri worries that almonds may threaten that way of life.

“The water’s disappearing,” Altieri says. “There will be no grazing land for the cattle. And if the cowboys don’t have cattle, how can this be the cowboy capital of the world?”

Altieri points to a well-drilling rig high up on a hill above her house. She says it makes a loud booming noise and flashes bright lights into neighbors' homes at night. She says investment companies growing almonds here have no concern for neighbors.

“They’re not farmers. They are investors. They are out for the almighty buck and for greed, bottom line,” she says. “Their product is an export. And also, it is a snack. It’s not a food.”

Paul Wenger, president of the California Farm Bureau Federation, is a Stanislaus almond grower himself, and he doesn't like the almond-bashing he's been hearing recently. But he calls the current almond investment rush “bizarre.”

“We are seeing investors come from all over the world trying to get in on it. It’s kind of like the Gold Rush," says Wenger.

The latest federal statistics, from 2012, classify 90 percent of almond growers as “family farms,” even though some of the operations are quite large. But investors are increasingly seeing almonds as a better bet than the stock market.

“As a grower, I think they’re making foolish investments,” says Wenger. “They look at what the prices of almonds are today. They weren’t there 10 years ago, and they won’t be there 10 years from now.”

So just exactly who are these almond investors? Some are banks or investment funds like TIAA-CREF. Even the Michigan Municipal Employees' Retirement System  is getting into the almond game (albeit in Australia).

Near the Stanislaus River east of Oakdale, one target of neighborhood frustration is Trinitas Partners, a private equity investment company based in Menlo Park that’s planted more than 10 square miles in almonds.

“There are three of us, we’re not a big corporation,” says Ryon Paton, one of the company's three principals. He says they have been unfairly painted as the bad guys for an operation they started eight years ago, before the current drought began.

“We understand real estate, we understand how to finance. We did not understand how to grow almonds," admits Paton.

"But we did enough of our supply-and-demand studies to understand that supply was growing more slowly than demand worldwide, and if that imbalance continued, there would be not an outrageous Silicon Valley profit in almonds, but a reasonable, responsible profit in growing almonds."

Paton takes me through the gates of his ranch to the top of a steep hill where you can see the peaks of Yosemite -- and acres of almond trees planted in neat rows across the rolling terrain.

"It gives us a picture of a fertile area for growing food for people. That’s really our mission at the end of the day, is responsible food, healthy food. Not all of what we produce goes overseas, by any stretch of the imagination, but we have customers all over the world because of our sustainable, responsible farming practices,” says Paton.

UC Davis economist Richard Howitt says that, typically, California farmers put more than 3½ feet of water onto every acre of almonds they grow. Paton says his operation uses about 3 feet an acre because its scale allows it to use advanced water-saving technology.

“We irrigate at night during off-peak hours, so there’s less evaporation," explains Paton, pointing to the lines of drip systems running through the orchard. "But we also have a technique for making sure there’s no runoff, that every drop goes into the root systems."

Trinitas also says they’ve stopped planting new trees in this area because of the drought. And they’re carefully checking their wells, and those of neighboring farmers, to make sure there’s no overdraft.

“Our hydrology folks are always measuring the situation,” says Paton. “Because I’m always asked this question, 'Are you affecting your neighbors adversely?' And to this point, I can honestly say, we are not."

In fact, Paton says he hopes to wean the farm from groundwater entirely. He says Trinitas paid more than $20 million to the Oakdale Irrigation District  to get its almond farms annexed into the district’s service area. The goal, says Paton, is to try and rely solely on surface water.

Problem is, the Oakdale Irrigation District is imposing first-time cutbacks on its customers this year, and farmers with more senior water rights want to make sure they get their allotment before newer customers like Trinitas.

So Paton feels like he's getting conflicting messages: Some neighbors don't want them to drill wells for groundwater; others don't want them using surface water.

"We have a history of listening and responding in a pretty conciliatory way when there’s an acute problem with the neighborhood,” says Paton. “On the other hand, they need to respect that this is an ag community and we have the right to farm.”

Ryon Paton, a principal with Trinitas Partners, right, with the managers of the firm's almond operation, Dan Kaiser, left, and Dave Germano, center.
Ryon Paton, a principal with Trinitas Partners, right, with the managers of the firm's almond operation, Dan Kaiser, left, and Dave Germano, center. (Sasha Khokha/KQED)

The guys who are actually managing this ranch day to day are fourth-generation farmers, who use the local pronunciation -- "AM-mundz" instead of "ALL-mundz."

“The family farms like the kind that I grew up on are very hard to be sustainable,” says Dan Kaiser, general manager of the Trinitas farming operation.

But it’s not easy now that the neighbors, folks he grew up with, are blaming that company for their water woes.

“It’s very disturbing to be picked on by anybody. It almost has a bullying effect. But being a true farmer, you have thick skin," says Kaiser. "There's a saying we use: Don’t curse the farmer with your mouth full.”