companies ’ prices have not increased in step , and Muller is concerned they will buy less in response to the drop in demand from Russia and Ukraine . Worst of all is the drought and the resulting water cuts that left Sacramento Valley farms without the irrigation their crops need to survive .
“ Economically , it ’ s just one of the worst crops to grow these days ,” he says . “ You can ’ t project any profit at their current pricing .” He has considered getting out of the sunflower market altogether , though his family has grown the crop for generations .
Seed money
Sean Doherty , co-founder of Sean Doherty Farms in Dunnigan , has a sunnier outlook . The third-generation farmer primarily grows rice on his windswept land near the northern Yolo County border , but he often sets aside 1,000 acres or more for sunflowers each year . “ There will always be sunflowers produced here in the valley ,” he says . “ It is the best place in the world to raise hybrid sunflower seeds .” In non-drought years , he explains , the Sacramento Valley ’ s dry climate is a boon for the flowers , which are susceptible to parasites and fungi . “ You can produce hybrid sunflower seeds anywhere , but say in the Midwest , you ’ ll get a rainstorm come through , and all of a sudden you have your molds and your mildews ,” he says . “ We don ’ t get any rain at all during the growing season . Everything ’ s very uniform , very specific , very precise .”
But because sunflowers , which are native to North America , can be produced in any temperate climate , the seed companies can easily be wooed away by farmers in regions with lower cost inputs . That means local farmers are being affected by another oblique consequence of the war in Ukraine : a strong dollar .
Compared to other global currencies , the U . S . dollar is currently at its highest value in two decades . An American shopper in Paris or another foreign city may feel as though everything is on sale , though prices are rising at home . That sale also applies to multinational companies looking to source materials ; a strong dollar will make these companies more likely to seek cheaper options outside of the U . S .
Several factors are contributing to the strong dollar , including the Federal Reserve raising interest rates ( meaning higher returns for investors ), the economically disastrous zero-COVID policy in China , and the war in Ukraine . The dollar tends to increase in value whenever there is war and market volatility elsewhere in the world because , notwithstanding our faults , the U . S . still has a reputation as a safe and reliable home for cash . The increase in foreign investments bids up the dollar .
So despite the favorable conditions in California , the strong dollar ( and some of the highest fuel prices in the country ) may make Sacramento Valley sunflowers too expensive for value-minded multinationals . Doherty says the companies he contracts with have already expressed concern on this point .
“ The main discussions we were having all centered around currency exchange rates ,” he says . “ Sometimes our currency gets too strong and costs them too much , and they can produce elsewhere for cheaper : say in Turkey , South America , Southern Europe . It ’ s all based on how much they can get .”
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