With water prices of about $1,000 an acre-foot in many parts of North County, avocado farmers may become an endangered species.
While 2009 figures have yet to be published by the county, avocados represented a $144 million industry in 2008.
Despite a good rainy season this year, farmers must make some big choices as summer approaches.
In past years, fire, frost, pests and foreign competition were deemed the biggest threats to the avocado crop.
Within the past three years, water has drowned all other concerns.
Many farmers agreed a couple of years ago to a 30 percent cutback in exchange for cheaper water rates. Now with the program phasing out, they are paying the price.
Farmers have been stumping their trees as a result of the restrictions and the water's high cost,
While stumping doesn't kill the tree, it places it in a relatively dormant state until it can get more water.
Assuming a $1,000-per-acre-foot water bill and the necessity for three or four acre-feet of water per acre farmed, Eric Larson, San Diego County Farm Bureau executive director, said the water bill alone would cost $30,000 to $40,000 annually for just a 10-acre plot of productive trees.
The Valley Center Water District charges $894.61 per-acre-foot for water that is still discounted and $985 for the non-subsidized water.
A rate increase of indeterminate size is expected in January.
Steven Orton a small-scale Valley Center avocado and citrus farmer, worries about more increases.
"I'm reading that water is going up another 13 percent in the valley next year. I'm going to be 77 this year and I need to get out of this," Orton said.
Chris Varvel, Henry Avocado sales manager, whose 85-year-old firm manages more than 2,000 acres in San Diego and Riverside counties, agreed that if the water prices keep climbing many grove owners may simply throw in the towel.
"As the growing becomes less and less profitable, more people will say it's simply not worthwhile," Varvel said.
"The price of water is pushing farmers right out the door ..." Larson said. "Valley Center, Fallbrook, Bonsall and Rainbow are all pretty close to each other and they are all around $1,000."
Al Stehly, Valley Center avocado and citrus farmer, said according to his records, the imported water cost was about $680-per-acre-foot five years ago, but whether the cost was $500 or $680, the increase since 2005 has been enormous.
Orton anticipated the problem and cut his avocado crop from 10 to eight acres -- only about two acres are productive due to young and substandard specimens -- about two years ago.
Now water prices have convinced him of the wisdom of the decision.
Larson said productive avocado trees generally need between three and four acre-feet of water, per acre, annually.
An acre-foot is enough water for two families of four for a year, or about 360,000 gallons.
Exactly how much avocado farming remains in the county is uncertain, but a number of smaller farmers have thrown in the towel.
Larson told The Daily Transcript in October 2007 that the county had 25,000 acres of avocados. While the acreage has changed little, fewer groves are now productive.
Numerous avocado farmers have either given up and sold their properties, just walked away or allowed them to be deeded back to a bank.
For example, on April 30, a 7.6-acre avocado grove in Vista was sold for $355,000 after the U.S. National Bank Association, as trustee for Credit Suisse Boston, had taken it back.
A 16.64-acre avocado orchard at 2610 Doville Ranch Road in Fallbrook, was recently sold for $148,000. Bank of America (NYSE: BAC) took the property back last year.
A 10.38-acre avocado grove along Via Monserate in Fallbrook was recently sold for $250,000 after First-Citizens Bank & Trust Co. had taken it back as well.
High water prices may have been the tipping point but Orton said believes water isn't the only problem.
"Competition from Mexico and Chile is just killing us," Orton said. "And you can't make a profit if the price of avocados are 80 or 90 cents a pound."
Carol Steed, owner of 110 acres of avocado trees on her Fairfield Farms property in the Pauma Valley, agreed.
"How can you compete with Mexico and Chile when they're paying their labor $6 a day?" Steed asked.
Longtime Valley Center avocado and citrus grower Al Stehly, who owns about 50 acres of avocado trees and manages hundreds more, is less worried about foreign competition than other issues.
"With the imports, you have 365-day availability and I don't think that's a bad thing. Every time you go to the store there's an avocado ... Avocado's are much more of a staple than they used to be," Stehly said.
Stehly is looking at taking five or 10 acres and converting them to more profitable wine grapes and has already grown some on a small scale.
"I'm fortunate that most of my citrus is on well water," Stehly said.
Steed suggested her business might not have had the same problem as the others had the water quality of the San Luis Rey River not been degraded by drought and overuse in recent years.
"We have a river easement ... but the water quality is very bad," Steed said. "We're stumping trees we would have liked to have left alone. What happens when these trees start coming back?"
Steed, who has had to use ever increasing amounts of imported water, said the problem is her farm's allocation is based on the 2007 allotment when the San Luis Rey River water was much more usable.
"And if you go over your allocation, you can receive an up to $3,000-an-acre-foot penalty," Steed said.