Odd Lots - An Arizona Farmer on How to Grow Alfalfa in the Middle of the Desert

Episode Date: July 13, 2023

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.See omnystudio.com/listener for privacy information.

Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthall. And I'm Tracy Allaway. 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. Right. And so there's this question about like, okay, 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 industrial standpoint, too.

There's all these new semiconductors. Semiconductor, yeah. 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? Why 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 way more complicated than like the five seconds it takes you to reach that conclusion.

I'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. We're going to be speaking with Trevor Bales. He is a six-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. Bales. Like, so people are going to like, this, your guest is made up. Nominative determinism. The alfalfa farmer in Arizona's last name is Bales. Like, 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 bail that is a very incredible so six generation farmer in arizona talk to us about like the beginning of your family's history i guess as a farming family in my my family that homestead in arizona their last name was actually belote b-el-o-a-t the belote family and they came out here as cattle ranchers and the cattle ranching turned into farming and cattle and then it turned into a feedlet

lot in farming. The farm supplied the feed lot. 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 1,000 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. We're lucky to have it. 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-somethingth-somethingth 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. Let me ask a super basic question, which is, you know, 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 is 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 it's hardiness, especially for what we do now, this 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 they're 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. Well, 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. So silage. It's basically a perennial, right? Like it keeps coming back.

Yes, yes. Absolutely correct. Yes. But it does go down and 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 the fertilizer and go through the whole process.

And usually we'll try to have a rotation crop in between it as well. But just this gets to the key question, and I feel like we sort of jumped right to it. So people look at- Sorry, I knew. No, no. I did jump to it quickly. 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 terms in a year. Do you know the five Cs of Arizona? No, but I can't wait to learn them. So, okay, right? So, back to like the history of why are they farming in Arizona? Yeah. Water, water and agriculture was, 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 was 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, 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 Cs.

Yeah, one of the five C. Climate, because our climate, copper, cattle, citrus, and cotton. Arizona 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, that not all the climates can grow alfalfa. So one thing I read, And again, I'm not a farmer, so I'm just reading, 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 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 dairy is holy smokes there wouldn't cotton not corn corn man corn use a lot of water so yes yes and no what you said yes and no yes we like it but for those same reasons you 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 switch to replacing alfalfa with corn. Like how does the math work out? What are we talking about 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. is my whole year, my whole year of the crop of alfalfa, which is around seven, seven acre foot, as we like to measure it with by acre feet, six to seven acre feet. But now, where I don't know, because you would have to get a nutritionist, is in that same acre of ground of soil, that one harvest of corn. What, what energy does it produce versus alfalfa? And that, I don't know that part. I'm just not the dairy market at all. I'm not the cattle market. It gets a little out of my realm. Let me ask you another question. Let me ask you another question then that's sort of related. So you say like Arizona alfalfa is better than alfalfa elsewhere. How much 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 grown 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?

get in a year from the same amount of land. And then like to talk us through the differences. It's most of the quality. So a lot of other states. So we average, 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 bail it with too much moisture, it will start to mold. It'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, much moisture and all the pressure in that bailer when they're packing the bail and you store it creates heat from the moisture inside and the whatever is inside the bail and it'll catch on fire.

So the dry down process, the curing process is extremely important. And a lot of the country, they don't have the climate we have. So they're fighting a lot more weather 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 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. Well, 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 flit. Let's flit. 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 of the or the alfalfa stand, it's not seeing the sun ever. It's down there underneath this super thick alfalfa. So 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, 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 hate market, they have so much rain. They cannot get in their fields and they cannot harvest it. So 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. We sent hay to Florida where there's soup, 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. And 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 horses. And back to the, even that feed quality for specifically horses that are racehors, ropers, barrel racing horses, 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. Let me ask another basic how it works question.

which is how do you actually water the alfalfa? So 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 used 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 Healer River, we farm right off the Healer River. Now the Healer River, they used to call it the Grand. or the mighty fruit they called it something he'll the river and there was always water so they started this canal that was upriver 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 were 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. You can't just do whatever you want. So the district manages that water. That water goes along farmers like myself. I will order water a specific amount for a time and then it'll go down a lateral ditch that feeds off the canal and 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. Versus if you didn't have it flat, the water would just go all different areas. Like I said, it's section, you know, 100 acre field is sectioned off in 120 foot sections. So 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 sub-surface drip, which is becoming pretty popular in Arizona. 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

you're saving on evaporation, but you are getting that water directly to the root. I mean, you are just hitting that root with water. So there's no evaporation. Which evaporation is not as much as people like to argue. Oh, evaporation, we've done studies. It's like 2% or less. It's very, very low. This is my dream for my garden is a system of underwater irrigation.

Did amateur gardeners do that? Yeah. Oh, I didn't have. I mean, like, it would take a lot. But for instance, 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, so that's fun. So maybe I actually already have subterranean irrigation in a way. You kind of do, yeah.

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, you know, 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, it's like a washboard, like an old washboard. Okay. 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 a relatively flat area and you just open the water up the water's 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 that everything else is dry so what they did back then is they would do these furrows and then and then they'd see you'd have all these these low like a washboard the water would stay in the low spots and 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, oh, they're, and then before GPS, so you still weren't very straight. Man, the fact that they thought of that was great, right? Like, man, back then that they saw that insight, like, hey, let's make these 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. that's a dirt ridge that runs from the top of the field to the bottom of the field. And that's that earlier I was talking about sectioning off your field to irrigate. You run a border from top to bottom and it's 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 flow evenly, you know, two inches deep across that whole 100 or however many feet, you know, 160 feet. If 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. It just kind of stops right there. I mean, if you have irrigators that aren't paying attention and they'll fall asleep and they'll mess up. But when everything's going correctly, man, it's just so efficient and so smooth. So that 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, everything is petroleum-based. So right now it's probably $3,000 or more per acre to put all that in. When petroleum-based things are cheaper, you can $2,000 an acre used to be the kind of the number. Well, when you're looking at bigger farms, 4,000-acre farm, oh, my gosh, that has it real quick. So let me ask you a question that kind of like 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, where 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 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 with technology the water treatment plants have gotten really good at cleaning water and desalamization plants they look our no one ever wanted our water they're like no no we don't want your water it'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 with a ground is always slightly muddy 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. And 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 my,

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 Sina Kerr, she's been pushing and other people than 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.

So 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. again. I guess I didn't finish my other thought of your question. With desalconization plants,

people are now looking at our water thinking, oh, huh, there's a bunch of water right there that these 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 100-year deal ends 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, you'd have to go back and look at the history and judgments and stuff, but they said 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 in the mountains where they want to build some houses. Then 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, 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. and that's where it gets pretty fishy. And to me, that's the real story who changed these water rules. I mean, if 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. 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? 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 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. Let me ask you. I mean, it's all based on paying my bills.

What pays my bills? And right now it's alfalfa. Do you have- If cotton came back and cotton was back to being king, maybe as they say cotton is king, all of a sudden cotton was what the mills wanted and what the markets were calling for, meant would grow cotton. I just realized your road is on below road. So that's the family. That's the family name. 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. Is your area, an area in which at some point are home builders 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 like a reliever freeway coming through our area. And I mean, it's all about transportation, right? Anywhere it 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. That's why all of the growth has happened around the freeway. I Interstate 10, I-17, I-7, or I-7, what I say? 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? I 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 a 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. You can't farm like this. And when you say like this, when you say like this, yeah, what do you mean? Year round and produce the quality of crops that we produce. Right. There, I mean, 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 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 so they can sell it to the United States because we got rid of all the water 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. If we lose Central Valley farming, but anyways, we've been doing this for over 100 years here, and 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 the cotton market, the wheat market, the barley market. There's the corn market. Alphalfa is like, you want to talk about like the wild west of markets? It's, I mean, it's so similar to the stock market on like, on like, well, like, futures or anything. No, there aren't. And so like every other like beef, like everything, like alfalfa. So like right now, actually, we are in a crazy, I mean, it's just falling like a rock.

Oh, yeah. There is an alfalfa producer price index. Yeah, and it is falling. So what's going on there? The United States has exported. It's 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 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. And this is all over the country, too. They buy out like all over the West Coast, Washington, Oregon, California, Arizona. They buy a lot. So they came in swinging and it, they, they raised the price up. I remember 300 used to be the high number. And this is per ton. We 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 $360 a ton or $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.

And so I have to buy a lot of hair. hay because of the, luckily, we've run a successful business and we sell a lot of hay to all over the country. All 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 the beginning of the year. And they're, well, we think that, you know, it's still 3.30, 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,

and 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 does what do people think is going to happen? And 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 needed 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. Tracy, 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 and 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 like measure hanging pictures on the walls and like terrace slopes and things like that. And he will not stop using it. To measure. 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? It 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. official 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. Yeah. It does seem like horses kind of escape a lot of climate change contribution scrutiny, right? Everyone always talks about cows, not the horses. Someone is going to, some horse person out there is going to get really angry. We're going to have to do a follow-up. I think horses are an easier target. I don't think there is many of them. 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 help things click. Or as he point 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 Eric, one thing that's nice about the desert. It's consistent. It's consistent. It's predictable, right? And so it's like, okay, there are obviously drawbacks, such as the fact that there's like, you know, the water is ambiguous. But you know what you're going to get.

once you start from that standpoint, like, you can like get a, 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, but again, it's one of those things like, okay, 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. But 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 Alldots podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway. And I'm Joe Wisenthal. 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 Elfalfa farming in Arizona. Follow our producers, Carmen Rodriguez at Carmen Armin and Dash O'Benet at Dashbot, and check out all of our podcasts at Bloomberg under the handle at podcasts. And for more Odd Lots content, go to Bloomberg.com slash Odd Lots, 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. There's even a water channel in there where I'm sure we're going to be talking about this episode.

Go to discord.g.g. slash uploads. Thanks for listening.