In short
Odd Lots Podcast Summary
Episode Title
An Arizona Farmer on How to Grow Alfalfa in the Middle of the Desert
Hosts
- Joe Weisenthal
- Tracy Alloway
Guest
- Trevor Bales - Owner of Bales Hay Farm & Ranch, sixth-generation farmer in Arizona.
Episode Overview This episode focuses on the agricultural practices in Arizona, specifically about growing alfalfa in a desert region facing water scarcity challenges. Trevor Bales discusses his family's long history of farming in Arizona and shares insights into the complexities surrounding water usage and agricultural sustainability.
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Key Topics Discussed
- Water Scarcity in Arizona
- Arizona is experiencing significant water scarcity due to drought and climate change.
- 75% of the water used in Arizona is allocated to agriculture, raising questions about sustainability.
- Historical Context
- Trevor's family has been farming in Arizona since the 1820s.
- The evolution from cattle ranching to farming and the establishment of irrigation systems.
- Importance of agriculture in funding water infrastructure development for the city of Phoenix.
- Alfalfa as a Crop
- Alfalfa is a unique forage crop known for its high protein content and nutritional value for livestock.
- It can be harvested multiple times a year, making it more water-efficient than many other crops.
- Trevor emphasizes that while alfalfa may seem water-intensive, its long-term yield justifies the water use.
- The Five C's of Arizona
- Trevor references the "Five C's": Climate, Copper, Cattle, Citrus, and Cotton, explaining their contributions to Arizona's economy.
- The climate allows for high-quality crop production, specifically alfalfa, which cannot be replicated elsewhere.
- Economic Factors
- Discussion on market demand influencing what farmers grow. Currently, the demand for alfalfa is high due to its use in dairy production.
- Trevor notes how fluctuations in market prices affect farmers’ decisions and profits.
- Technological Advancements in Farming
- Introduction of laser leveling technology to improve irrigation efficiency.
- Comparison of traditional furrow irrigation methods to modern practices such as subsurface drip irrigation.
- Future Concerns
- Concerns about the sustainability of water resources as urban development continues.
- The potential for agricultural land to be converted for residential and industrial uses, exacerbating water scarcity.
- The importance of preserving agricultural water rights amid growing demands from urban areas.
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Key Takeaways
- Agriculture, especially alfalfa farming, plays a crucial role in Arizona’s economy and water management.
- Water scarcity is a complex issue that transcends simple solutions; the historical context is essential to understanding current challenges.
- Technological advancements have improved farming efficiency, but the sustainability of water resources remains a significant concern.
- The dialogue between agricultural needs and urban development is critical for future policy decisions regarding water management in Arizona.
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Conclusion The episode sheds light on the intricate relationship between agriculture and water use in Arizona, emphasizing the need for a nuanced understanding of these issues as the state faces ongoing challenges related to climate change and population growth. Trevor Bales provides a valuable perspective on the historical and economic realities of farming in the desert, showcasing the complexities of balancing agricultural practices with sustainability goals.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
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1:22Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal. And I'm Tracy Alloway. Tracy, do you remember the episode we did with Chase Emerson? I do, about land development in Arizona. Right. So that was, we were talking to a land broker, someone who helped facilitate the sale of sort of unused or agricultural land to homeowners or to sort of home builders. But there's been a lot of talk, and we touched on it a bit in that episode, about like the sustainability of water usage in Arizona. Yes. In fact, there was a pretty big headline that came out quite recently saying that Arizona was going to halt new home approvals in parts of Phoenix because of concerns over water availability.
2:08Right. And so there's this question about like, OK, Arizona is like this boom state, right? Tons of population growth, tons of land, people moving there. It's been booming for years. It's booming from an industrial standpoint, too. There's all these new semiconductor fabs. Arizona touches everything for us. It does. And also Arizona water seems to touch everything. And I mean, this came up in the Chase Emerson episode, but I remember I asked someone from the Biden administration about it as well. But, you know, why are we building these big factories, semiconductor factories that use a lot of water in the desert?
2:44Why are we developing lots of land in the desert? Why are we farming a bunch of water intensive stuff in the desert? Yeah, right. This is how it goes in people's head. They're booming in Arizona. There's water scarcity. And then they discover that Arizona, despite being the desert, 75 % of the water used in Arizona is agriculture. And they go, what? That's crazy. Why are we growing food or growing grains or crops in the desert? And then people say, oh, well, that's the problem. We just need to stop growing in the desert. And the conversation ends there. But obviously, all of these things are like way more complicated than like the five seconds it takes you to reach that conclusion.
3:24I'm very curious how this became a thing. Like how did agriculture become a big part of the Arizona economy? And why in particular does it seem like we are farming water intensive crops in an area where water nowadays seems to be a concern? And maybe that's the key. It didn't used to be as much of a concern and now it is. But I am very interested in hearing this side of the story. I think they've always sort of wondered, like, what's the deal with agriculture in the middle of the desert? Anyway, we literally have the perfect guest because, as you mentioned, it's been going on for a long time. We have the perfect guest.
3:59We're going to be speaking with Trevor Bales. He is a sixth generation farmer in Arizona. He runs Bales Hay Farm and Ranch, which grows alfalfa. He's based in Buckeye, Arizona, in the southwest part of the state. We're going to talk all about the history, the operations, the water usage, all of these things about growing alfalfa in the desert. So Trevor, thank you so much for coming on Odd Lots. Hi, guys. Great to be here. Can I ask you a really obnoxious question? Yeah. Just to start. Bales? Like some people are going to like this. Your guest is made up. Nominative determinism. The alfalfa farmer in Arizona's last name is Bales.
4:37Like you might you cannot be real. No, we did not change her name. It's been Bales. before it was bales of alfalfa it was bales of cotton so still a bale that is a very incredible so sixth generation farmer in arizona talk to us about like the beginning of your family's history i guess as a farming family in my family that homestead in arizona their last name was actually bloat b-e-l-o-a-t the bloat family okay and they came out here as cattle ranchers and the cattle ranching turned into farming and cattle and then it turned into a feedlot and farming the farm supplied the feedlot and then it transitioned into only farming now that's over a span of 120 plus years but that's in a nutshell so they came over here man my great great great great grandpa I think he had 14 kids or something so we currently farm a thousand acres which if you think about it we're very lucky to have that many acres when it's been split so many different times between children and family.
5:39We're lucky to have that. But they came in the 1820s, but they homestead in 1891. So before Arizona was even a state, my great, great, great grandpa was integral in building the canal district that we currently use for irrigating our crops. So we have an extremely long history. One of our cattle brands is actually in the top, one of the first, I think it's like a 450th or 440 something cattle brand. So we've been here a very long time, have a deep history in the state. And then along the way, my great grandpa, Wallace Bales, married Alberta Belote. Him and his son, my grandpa Steve, purchased the farm from the in-laws and became the Bales farm.
6:24Let me ask a super basic question, which is, A lot of people, I think they hear alfalfa, and if they're not out in the country, they're thinking about those little alfalfa sprouts that you might get on your salads or as a garnish or something like that. But talk to us about what alfalfa actually is and the role that it plays in agriculture. So alfalfa is a very, very unique plant. It's a forage. It has great relative feed value properties or protein properties. It's very good for making high-quality milk. It's very good for making high quality beef. What makes it so unique is its hardiness, especially for what we do now.
7:03This changes across the country because Arizona is much like a greenhouse effect. I kind of compare it to because of our temperature. We are in the field eight to 12 times a year. We're in there cutting that alfalfa. Now there is no other crop other than grass. And even grass does not have the feed qualities that alfalfa has that you can go in there and cut multiple times. in a year and then for several years after that we can keep an alfalfa stand in for four to five years where other states where they're only in there cutting their crop two or three times they can leave it in six seven eight years but because of that because that alfalfa stays in for so long it gets a bad reputation as to what you were talking about earlier is water people call it a very high intensive water use crop.
7:52Well, a lot is being left out. That crop stays in. It's a very efficient crop. When you look at all the work that goes into it, we plant it and we leave it in for four to five years. So it is producing great feed quality for cattle, horses, milk cows, beef cows for five years. No other crop can do that. Corn, you plant it once, it takes a massive amount of water and then you harvest it once that's it uh silage it's basically a perennial right like it keeps coming back yes yes you're absolutely correct yes uh but it does go down in value to where we do take it out the yields aren't as good so after about the fourth fifth year we'll see the yields will go down and we will take the field out we'll apply manure to it for uh the fertilizer and go through the whole process and and usually we'll try to have a rotation crop in between it as well.
8:45But just this gets to the key question, and I feel like we sort of jumped right to it. So people look at it. No, no, no, no. But this is really, I think, sort of the key of the argument, which is that you can grow alfalfa elsewhere outside of Arizona. But the point that you're trying to make is that there's something about the uniqueness of the Arizona climate. So setting aside the water issue, there's something about the Arizona climate specifically that gets you several turns in a year. Do you know the five C's of Arizona? No, but I can't wait to learn them. So, right. So, and that back to like the history of why are they farming in Arizona?
9:25Water and agriculture were never a hot topic in Arizona until Phoenix got to be fourth, fifth, sixth largest city in the country. Right. We've been farming here for, like I just said, my family's here in the 1820s doing it. So the water was never a problem until humans came in, cities came in, manufacturing came in. Farming actually paid for a lot of the water that is here in Phoenix, Salt River Project, SRP. The city couldn't afford it, so the farmers came in and they paid for the water system, and now the city is using it. But anyways, back to the five C's. Yeah, one of the five C's. Climate, copper, cattle, citrus, and cotton.
10:05Arizona makes some of the best cotton in the world. We make the best alfalfa in the world. We make some of the best wheat and barley, and we make some of the best corn in the world. It's because of our climate. And so, like you said, alfalfa can be grown other places, but the quality is nowhere near the same. And it can't be grown everywhere. Not all the climates can grow alfalfa.
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12:21So one thing I read, and again, I'm not a farmer, so I'm just trying to read various things on this topic. But one thing I read was that farmers in Arizona like alfalfa because it's reliable and because it grows well in that environment, provided there's enough water around. Is that the right way of thinking about it? Yeah, but that's, I mean, that's any crop, right? We're just like the industry. Farming is industry. And what is supply and what is demand, right? Well, cotton used to be the demand. Citrus used to be the demand. and unfortunately the demand with the mills in china and china's rules about importing cotton cotton's no longer the demand so they go to what is the big demand which right now there are a lot of dairies around and dairies need a lot of protein to make high quality milk which we actually ship all over the world from this area and alfalfa is the most efficient way to make high quality milk if they think water is a problem now if every farmer grew corn for the dairies holy smokes there wouldn't cotton, not corn, corn, man, corn uses a lot of water.
13:27So yes, yes and no, what you said, yes and no. Yes, we like it. But for those same reasons, any other crop is the same thing. Right. So in the end, whether we're growing alfalfa, whether we're growing corn, I guess, whether we're growing soy, other things like there's like a certain math, right? There's a certain amount of water. There's a certain amount of human labor. You get a certain amount of feed at the end, those go to feed cows and then the cows either become beef or they become for milk. Can you talk a little bit further about like, okay, you say like corn, that would be much worse if we switched to replacing alfalfa with corn.
14:01Like how does the math work out? What are we talking about? Well, loss with that replacement. And I've never grown corn myself. My dad used to grow quite a bit. My grandfather would for our own feedlot. By the time I came along we don't grow as much but the corn crop in a short like 120 day corn uses approximately the same amount of water as my whole year uh my whole year of the crop of alfalfa which is around seven seven acre foot as we like to measure with by acre feet six to seven acre feet but now where i don't know because you would have to get a um a nutritionist is in that same acre of ground of soil, that one harvest of corn, what energy does it produce versus alfalfa?
14:47And that, I don't know that part. I'm just not in the dairy market at all. I'm not in the cattle market. It gets a little out of my realm. Let me ask you another question then that's sort of related. So you say like Arizona alfalfa is better than alfalfa elsewhere. Talk us through that a little bit more. What is better about growing it in Arizona versus other parts of this country? Because it is growing elsewhere in this country. So is it the quality of the product or is it the yield or the amount of turns that you can get in a year from the same amount of land? And then like, talk us through the differences.
15:24It's most of the quality. So a lot of other states. So we average about nine tons per acre for the year. Depending on the soil type, we can get nine to 10 tons per year. But that's with 10 to 12 cuttings. A lot of other states, they can get seven to eight tons per year, but that's on half the cuttings. And so each cutting is making a massive amount of hay each time. Well, the bigger the stand gets, the lower the quality gets. It gets real big. It gets real kind of tough. The stems get real big. And with that size, what's extremely important about alfalfa for a few reasons. One, if you bale it with too much moisture, the bale, it will start to mold.
16:09It'll go bad. It can also, I don't know if you've ever heard of a hay fire, but if it has too much moisture and all the pressure in that baler, when they're packing the bale and you store it, creates heat from the moisture inside and the whatever's inside the bale and it'll catch on fire so the dry down process the curing process is extremely important in a lot of the country they they don't have the climate we have so they're fighting uh a lot more weather than we than we fight and so the fact that we're able to get it dried down and to cure and then also not have these massive two two or three ton cuttings like when you cut alfalfa that's two tons or more it's so big and thick and it's hard to get it to cure out.
16:51Well, we go in there every 30 days or less, 25 to 30 days. We cut it. It's nice. It's small and it's thinned out and it dries and it cures very pretty and it keeps a lot of color and it keeps the leaf. The leaf is the important part of that plant. That's where all the nutrition is. And a lot of these other places have to flip it two or three times. Oh, it's not dried enough. Let's flip it over. You just got to get the bottom to dry out because when you cut it, it's laying there on the ground. Well, the part that's up against the ground or the alfalfa stand, it's not seeing the sun ever. It's down there underneath this super thick alfalfa.
17:25So then they flip it over. All right, now you dried out that side. Well, darn it, and then a rainstorm came. We got to flip it back over again because now that side's wet. And so they just don't produce the quality that we produce or the tonnage too. And with the rest of the country, a lot of the country does rely on, we call it dry land farming, where they do rely on rain. When there's a drought across the country, Arizona fills that gap. And when there's too much rain, like there's been years where Idaho or Texas, and Texas is a huge market, they have so much rain, they cannot get in their fields and they cannot harvest it.
18:03So guess what? It's almost the same problem as having the drought, right? You still can't, you don't get anything out of your fields. And so Arizona fills in that gap. So I take the point about, you know, it's easier to cure given the drier weather and, you know, maybe it's producing more higher quality alfalfa. But how much does the quality actually matter? Because doesn't most of this go to cows for feed? Like, do the cows care about the color of the alfalfa hay that they're eating? My specific market is the horse market. So people with horses that have anywhere from, I mean, we've fed horses that have been in the Kentucky Derby.
18:42We sent a hay to Florida where there's horses that fly on private jets back and forth from other countries for breeding purposes and racing. I don't know what they do. I'm not much of a horse person, but yes, to them, it is extremely important. And even back to the cattle side, yes, it's important because that feed value changes. and that feed value is extremely important. The older the hay gets, the lower the feed value goes down. That feed value is in direct connection to the quality of milk that the cow produces. So visual quality for horse people is extremely important. Then test quality for cattle, for milk cows is extremely important.
19:25And beef, not so much for beef. I mean, you can, lower quality hay is fine. But once it's laying in the field and it gets rained on, that does take the quality away for both milk cows and or um horses and back to the even that feed quality for specifically horses that are race horses ropers barrel racing horses like they need that high protein to be able to compete with whether they're doing so quality is quality is very important and there's a lot of people that have horses just as pets they never ride them they just like having a horse and that situation it's not it's not important um let me ask another basic how it works question, which is how do you actually water the alfalfa?
20:08So we talked about harvesting and curing, but what does the watering process actually look like? And you mentioned that I think one of your grandparents had built canals on your farm that you presumably use for irrigation. Is that what you're doing? So it's crazy with all this water stuff. Arizona has less acres than it's ever had, and we're more efficient than we've ever been. But so the Hila river we farm right off the hila river now the hila river they used to call it the grand or the mightier fruit they called it something hila river and there was always water so they started this canal that was up river and then the water would come in on this canal and it would and they kind of followed the man it's amazing the way they did it back then and how they were able to find without gps the high points of this little valley we're in and they kind of followed the spine of this little valley and so there's that main canal that feeds water to all the farmers that are within the district so we're very closely measured on how much water we use people like to imagine we're just using as much water as we can we are not at all we get we get cut off if we if we use too much like you you can't just do whatever you want so the district manages that water that water goes along uh farmers like myself i i will order water a specific amount for a time and then it'll go down a lateral ditch that feeds off the canal.
21:29And that lateral ditch will then either will then carry water to the ditch that connects to my fields. Now, all of our fields are laser leveled. So they're flat side to side with a end fall. So there's a little bit of geometry involved with the farming. So when you open the water in that designated area of the field, which might be 120 foot wide, quarter mile long, it flows very evenly from side to side. So you're covering the whole thing and that makes it very efficient work versus if you didn't have it flat, the water would just go all different areas. And like I said, it's section, you know, a hundred acre field is sectioned off in 120 foot sections.
22:10So we're using a gradual decline in the land or fall to measure that specific area efficiently and that's specifically how i irrigate but what has become a very efficient way of irrigation is subsurface drip which is becoming pretty popular in arizona cystic i'd like to do it it's just expensive what is that do it that's where everything is underground and so you are uh you're you're saving on evaporation but you are getting that water directly to the root i mean you were just hitting that root with water so there's no evaporation it's um which evaporation is not as much as people like to argue oh evaporation we've done studies it's it's it's like two percent or less it's it's very very low this is um but uh this is my dream for my garden is a sister a system of underwater irrigation instead of yeah amateur gardeners do that yeah oh yeah you can't i mean like it would take a lot but for instance we at the moment we have a bunch of underground like hoses and pipelines going through two and a half acres and they're all leaking.
23:12So that's fun. So maybe I actually already have subterranean irrigation in a way. You anticipated, Trevor, a question I was going to ask, which is about advances in water use technology over time. And I have to imagine maybe there are some similarities, but as you mentioned, it's gotten more efficient, probably relative to when your ancestors were on the same land. How does it look differently? What are some of the advances that have been made since some of your ancestors were farming on the same land to get better output with less water? That laser system has been huge. What they used to do is everything was in furrows, which a furrow is.
23:51It's like a washboard, like an old washboard. Okay. You know what a washboard is? Yeah. But then it runs. The water would run down there. But by having all those furrows, I mean, if you can imagine if you've got like a relatively flat area and you just open the water up, the water is going to follow the way of least resistance. So you're just going to have this water go right down that one area and then all the, everything else is dry. So what they did back then is they would do these furrows and then, and then they'd see how all these, these low, like a washboard, the water would stay in the low spots.
24:21And then, but then everything would get watered, but it was just not very efficient. it was rough it was hard on equipment and the planter or the furrow maker man they're they're heavy they're just how they're they're and then before gps so you still weren't very straight man and the fact that they thought of that was it was great right like that man back then that they that they saw that insight like hey let's make these yeah washboards if you will and the water is hitting all areas which is impressive and then they came up with the laser system and now they use a gps system but what we have what is very foreign to pretty much every state except california and arizona there's a few other places is we call them borders it's a dirt ridge that runs from the top of the field to the bottom of the field and that's that's earlier i was talking about sectioning off your field to irrigate you run a border from top to bottom and it's to about two feet tall and then you go over it depends because every field does have natural sidefall But the goal is to, between those two borders, get rid of that because you want that water to float evenly, you know, two inches deep across that hole, 100 or however many feet, you know, 160 feet.
25:31If it's a steep field, then you have a bunch of 60 feet borders. If it's a steep field, you have fewer, 120 plus borders. But that laser leveling has been an amazing tool for running irrigation, extremely efficient. Like I said, we open up the area on that little section, 120 foot by quarter mile, and that water runs, like I said, two inches deep or less, just the length of that. And I mean, you imagine, it looks like it's like 120 foot, that water just going just even with itself all the way and gets down to the bottom of the field. You shut it off and it just kind of drains itself right there.
26:06It just kind of stops right there. I mean, if you have irrigators that aren't paying attention and they'll fall asleep, then they'll mess up. But when everything's going correctly, man, it's just so efficient and so smooth. So that laser system has been probably the best, most efficient way. Okay, I should say the best. It's probably the most efficient way just because what it costs to do versus the subsurface drip is definitely the most efficient way. But, oh, it costs, depending on like with oil prices where they are and like PVC, everything is petroleum-based. So right now it's probably$3 ,000 or more per acre to put all that in.
26:44When petroleum-based things are cheaper,$2 ,000 an acre used to be kind of the number. Well, when you're looking at bigger farms, 4 ,000-acre farm, oh my gosh, that adds up real quick. So let me ask you a question that kind of cuts to the heart of a lot of this discussion. But how real or salient are concerns over water for you right now? Like, have you witnessed water shortages during your time as a farmer? Has it affected your business? Are you getting perhaps more pressures from, you know, external sources to reduce your water use? How is it actually playing out for you? So for us, it's kind of unique, right?
27:28Where we farm, we're in an area they call a waterlogged area with extremely, extremely salty water. and a lot of the water that we specifically use for the past 100 years has come from phoenix water treatment plant where i farm we're not allowed to grow produce because it comes from water treatment we don't get water from the colorado river i don't get water from the salt river project our water comes from eastern arizona as the rains come down and it trickles down the salt river and it comes into the gila river and it keeps our aquifer very full of water rather but our water is so salty and then then taking the water from the paying the city for their water back before phoenix was was a big city they loved that we took their water and so we've never really had a right where i farm specifically anyways we've never had a fear of losing our water until um with technology the water treatment plants have gotten really good at cleaning water and desalimization plants they look are no one ever wanted our water they're like no no we don't want your water.
28:31It's disgusting. It's super salty. We can't use it for anything. Like we're glad you guys are actually using it because if you weren't, this place would be almost like a swamp down here. Like there are areas if you, if you can drive where the ground is always slightly muddy and that's because that water's like three or four feet underground. It's just right down there. And so they love that we're farming it, pumping it out of the ground and using it because they don't want to deal with, with the swamp, I guess. I mean, not a literal swamp, But what's also changed a lot years ago, they brought in a tree called a salt cedar tree.
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29:05And it's from, I think it's from Africa or the Middle East. I don't remember where it's from, but it's not native to Arizona. And this tree uses a lot of water and it has overgrown the Gila River or the river I just told you I farmed on. And it uses a lot of water. And since that tree has been brought in and it's infested the river and even the desert, the water doesn't flow down the Gila River very much anymore. It rarely does it. Senator Cena Kerr, she's been pushing and other people then pushing, let's clean out this non-native invasive tree that uses a lot of water. But the animal rights are like, oh, there's owls and stuff living in there and the butterflies or something.
29:51So big picture. Okay. Maybe your farm specifically is in a position where it's not for historically a lot of the water that used, no one else wanted it. Do you feel like at some point, like for your industry, and I'm sure you talk to other farmers, like this is coming to a head, like, okay, there is this much water that can be used for agriculture. There's household demand. There's industrial demand. Like, is someone going to have to give here? yes somewhere it is going to have to get i guess i didn't finish my other thought of your question with desalinization plants people are now looking at our water thinking oh huh there's a bunch of water right there that these farmer farmers have that we can have and now that the city is good at cleaning the water they're looking at it thinking oh maybe we'll just go buy this water from the farmers once their their hundred year deal pop ends with the with the city so that is a fear of ours yes and so then yes to your point we do realize that there's something's going to have to give and there used to be good laws in place about where you could build because it is a desert the idea back and you'd have to go back and look at the history and judgments and stuff but they said you you had to build where you could have water well then it got real fishy because the thought was as home builders and manufacturing bought property from farmers that water would then go from a farmer to a house so you're you just traded from one industry to another well then the water laws up in you know over my pay grade in the city started oh well technically we could send water up to this real pretty area over here or in the mountains where they want to build some houses.
31:35Then all of a sudden water gets sent another way. Oh, there's a freeway up here. It sure would be nice to have buildings and stuff next to the freeway. Well, so then they started buying property in the desert and building in the desert, and they kind of skipped around the farm ground. And then now everyone's wondering like, oh, now we're low on water. Well, 80 years ago, when they kind of looked ahead to the future, They said, well, if we trade farm ground for housing and development, the water just changes traded hands. Well, then I said, I don't know. It happened before my time, but some water rules were changed.
32:12And that's where it gets pretty fishy. And that to me, that's the real story. Who changes water rules? I mean, like I said, the farmers didn't change a rule. We've been here farming for over 100. We're farming less acres than ever. But so there were some things that kind of changed. And that'd be interesting to get the full story on that. because like yeah there's big housing developments up in these areas that are very arid there's no water there's no farming that ever happened there they just boom let's throw in these several thousand homes and neighborhoods and use a whole bunch of water
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34:46Chase Sapphire Reserve for Business. With over$2 ,500 in annual value, it's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for Business. Make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank and a member FDIC. So let me ask you maybe a tough question, but is there anything that would make you reconsider or maybe rethink growing alfalfa? Like what would be the conditions under which that is no longer either desirable or profitable for you? oh it's just like any other industry right i mean a car manufacturer what would make them want to stop manufacturing cars it's all market-based as long as we have water and soil you know i can grow whatever the market is asking we we don't i don't grow alfalfa because that's what i want to grow it's that's what the market asks for yeah it makes sense uh let me ask you i mean it's all it's all based on you know paying my bills what what pays my bills and right now it's alfalfa do you have cotton came back and cotton was that was back to being king they used to say cotton is king all of a sudden cotton was what what the mills wanted what what the markets were calling for man would grow cotton i just realized your road is on below road so that's the family that's the family name um have any home builders because when we talked to when we talked about arizona land they're talking about well a lot of the what is you know where home builders build was formerly agricultural land.
36:22Is your area an area in which at some point are homebuilders potentially trying to bid on your land? Or is there ever a point where the economics in your area could be such that a homebuilder would find more value from it and writing you a big check than growing alfalfa? Yeah, it's yeah. Right now we're about 10 miles from the freeway. And so that's what kind of keeps that from happening. But there's a bunch of plans of the of a like a reliever freeway coming through our area. And I mean, it's all about transportation, right? Anywhere, it's generally relates directly to transportation. And when you're far away from a freeway or whatever, something that's around you, it's all related to that.
37:05That's why all of the growth has happened around the freeway. Interstate 10, I-17, I-17, or I say a 202 over here, it's all based around the 101, the freeways. And we're about eight to 10 miles off the freeway. So if we were right on the freeway, yeah, they'd be knocking on the door, but it's all based on transportation. So I just have one last question and I guess it's sort of open-ended, but we started this talking about all these debates that happened about water use in Arizona. What's sort of like the one thing that you think people are missing big picture when they discuss this and like, what's sort of like the one thing you would like more people to understand about the distribution of water in Arizona?
37:48I guess I said earlier, water was never an issue until the city got as big as it was. We're farming in the state less acres than we've ever farmed or using less water than we've ever used. And we're more efficient than we've ever been. And so as the city gets bigger, now water is an issue. As you guys talked about earlier, why they're building these chip manufacturing plants in Arizona. Why don't they build them somewhere? They don't have to build them here. We farm here because this is the only place in the United States you can farm like this. This and parts of Central California. That's it.
38:20You can't farm like this anywhere else. When you say like this, year round and produce the quality of crops that we produce. There's things we can't grow here, but that they grow all over the Midwest, which is why they grow them there. I could go farm somewhere else by be farming a different crop, I guess without Arizona and, and really the scary one is California. If you ever look up how much milk or produce the central Valley, California produces, Oh my gosh, if they lose their water, everything we eat vegetable or produce related is going to come from another country. And it's going to be sprayed with every nasty chemical to kill every single bug that ever lived.
39:02So they can sell it to the United States because we got rid of all the water and or the farming in California. That's what scares me. Yeah. I love Arizona and it's where I farm, but for the sake of our country, California scares me the most. Holy. If we lose Central Valley farming, but anyways, we've been doing this for over a hundred years here and it was, it's never been an issue until the city got really big. Trevor Bales of a Bales Hay Farm. Really appreciate you coming on a really good perspective. I thought we're going to talk about alfalfa markets. That's what's interesting to me what did we miss on alfalfa markets so most other markets are trackable and have a the cotton market the wheat market the barley market there's uh the corn market alfalfa is like you talk about want to talk about like the wild west of markets it's i mean it's so similar to the stock market there's no like alfalfa futures or anything no there aren't and so like every other like like beef uh but like everything like alfalfa so like right now actually we are in a crazy i mean it's just falling like a rock it got there is an alfalfa producer price index yeah and it is falling so what's going on there the united states has exported its agriculture things for as long as once boats were once we started shipping stuff out of the country we've been exporting so forever yeah so the we export a lot of hay out of the country those exporters last year and the year before that, for some reason, came in swinging real hard, wanting to buy a lot of alfalfa.
40:32And this is all over the country too. They buy all over the West Coast, Washington, Oregon, California, Arizona. They buy a lot. So they came in swinging and they raised the price up. I remember 300 used to be the high number. And this is per ton. I always think of things per ton. I think, wow, wow, that hay was sold for$285 a ton. Wow. Maybe one day we'll hit 300. Wow. Well, in less than a year, it went from$300 to$400 a ton. And then it went upwards of like$460 a ton. So it went way up there, which is very high. But then this year they came back in and they're not buying. Well, everyone got this start off the year again with this false thinking it was going to be high again.
41:17And so I have to buy a lot of hay because luckily we've run a successful business. and we sell a lot of hay to all over the country. All of my hay stays local. It doesn't get exported, but it stays here in the U.S. And so we harvest all our stuff. Then I harvest other people's hay and I buy it from them. Well, they are looking at what they think the market is at the beginning of the year. And they're, well, we think that, you know, it's still 330, 340. Okay, so here we are in March and April, harvesting hay and paying 340 for it, 330, 340. And then as it's been going, It's just this crazy, uneasy, nobody knows.
41:54And you're all these weird numbers and the exporters aren't buying. And all of a sudden now, so I purchased, hey, two months ago for$340 a ton. I think I'm going to purchase, hey, this month for$195 a ton, which I guess if you don't understand, that's a huge swing in our industry from one to the other. And it's just such an interesting market. I mean, especially in the stock market and all the movies you watch, like it's all about what do you think? What does this guy think? You know, where it doesn't necessarily matter what's really happening. It's what is your perception and what do people think is going to happen?
42:35And so everyone starts making decisions on what they think is going to happen. And everyone thought the market was going to stay high. And I mean, to see it fall over$100 a ton in a couple months, I mean, that's crazy. We need an Alpha Alpha futures market. Trevor, thank you so much. I'm glad we got that context in the sort of the current day market swing, but I really appreciate you coming out online. Yeah. Thanks, guys. Yeah, that was great. Thank you so much.
43:15Tracy, I really like that conversation. I mean, there was a lot in there. But just to start, you know, I like hearing about, like, the technological advantages in irrigation and farming and, like, now how they use lasers to make sure it's, like, perfectly flat and stuff like that. My husband got one of those to measure hanging pictures on the walls and terrace slopes and things like that. And he will not stop using it because it looks very cool. Measuring the flatness of things. A couple of things stood out for me. So number one, I think people hear, oh, why are we farming alfalfa in the desert?
43:44It makes no sense. But Trevor's point about how it's actually easier to cure the alfalfa hay, that makes a lot of sense to me. it doesn't necessarily mean it's efficient from a water perspective, but you could see why that would be beneficial if you're making these giant rolls of dried grass, essentially. And then the other thing that struck me was, you know, this idea that a lot of the alfalfa is going to fancy horses. It does seem like horses kind of escape a lot of climate change contribution scrutiny, right? Everyone always talks about cows, but not about horses. Someone is going to, some horse person out there is going to get really angry.
44:22That's fine. I think horses are an easier target, to be honest. I don't think there is many of them. I don't think there is many of them. I don't think they're, I mean, no offense to Trevor. I don't think that end market is as crucial. But you know what I think was interesting in a point that he made that sort of like helped things click? Whereas he pointed out, you know, like in some places you'll get drought. In some places you'll get, sometimes you'll get flooding. Right. And so really, one thing about, one thing that's nice about the desert. It's consistent. It's consistent. It's predictable.
44:49Right. And so it's like, OK, there are obviously drawbacks and such as the fact that there is like, you know, the water is ambiguous, but you know what you're going to get. And so once you start from that standpoint, like you can like get every on every other metric. Arizona is very efficient for these crops. Totally. And that was a perspective that we hadn't really heard before. But again, it's one of those things like, OK, it made sense for a long time. But as the cities develop, to Trevor's point, as we build these semiconductor factories, it does feel like decisions, tough decisions might need to be made.
45:25But on the other hand, like maybe the answer is to keep Arizona an agricultural powerhouse and not continue to spread Phoenix as far as the eye can see. Like we sort of like, oh, everyone's moving to Phoenix. Therefore, we need less agriculture. but it is good to get the perspective of the people in the agriculture and say, yeah, but why does Phoenix need to just keep growing in all directions? Or move the fabs elsewhere. Or move the fabs elsewhere. Yeah. Yeah. All right. Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast. I'm Tracy Alloway.
45:53You can follow me on Twitter at Tracy Alloway. And I'm Joe Weisenthal. You can follow me on Twitter at The Stalwart. Check out the Instagram of our guest, Trevor Bales. Check out at Bales Hay on Instagram, where he makes lots of interesting videos about alfalfa farming in Arizona. Follow our producers, Carmen Rodriguez at Carmen Armin and Dash O 'Bennett at Dashbot. And check out all of our podcasts at Bloomberg under the handle at podcasts. And for more OddLots content, go to Bloomberg.com slash OddLots, where we have transcripts, a blog, and a newsletter that comes out every Friday. And check out our Discord, where you can chat 24-7 with fellow listeners about all this stuff.
46:32There's even a water channel in there where I'm sure we're going to be talking about this episode. Go to discord.gg slash outlaws. Thanks for listening.
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From the publisher
Due to a combination of drought, climate change and booming growth, Arizona is facing looming water scarcity. But for all the sprawl and population increase, the overwhelming amount of water used in the state is not consumed by residences, but rather farmers. So naturally, many argue that we should be doing less agriculture in the desert and move the production of cotton, alfalfa and various vegetables towards places with more rain. On this episode, we speak with Trevor Bales, the proprietor of Bales Hay Farm & Ranch in Arizona about his family’s history in the state and why he thinks this dry desert is a great place to grow alfalfa.
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