2/4/25 From Debt Freedom to Farming Woes: Steve Murray on Kern’s Agriculture Crisis

The Moneywise Radio Show and Podcast Tuesday, February 4th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management instagram: MoneywiseWealthManagement Guest: Steve Murray, Owner/Founder of Murray Family Farms website: www.murrayfamilyfarms.org/

• 0:00Speaker 00

  From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.

• 0:09Speaker 01

  I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me?

• 0:29Speaker 02

  Securities offered through SEF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SEF Investment Advisors, Inc., SEF Securities, Inc., and Money Wise Wealth Management are independently owned and operated.

• 0:40Speaker 00

  Now, let's start the Money Wise Show.

• 0:43Speaker 03

  Welcome to the Money Wise Show. We are live from the Garrow Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. Today, we're your hosts, I'm Sharad Waite and?

• 1:06Speaker 04

  Seth Perry.

• 1:07Speaker 03

  Seth Perry, welcome to the show Seth.

• 1:09Speaker 04

  Thank you.

• 1:09Speaker 03

  And this is not your first time, but this is your first time in the co-pilot seat.

• 1:15Speaker 04

  Yeah, I think so.

• 1:16Speaker 03

  You've been co-co-pilot.

• 1:17Speaker 04

  I've been co-co-pilot, so.

• 1:18Speaker 03

  Now you are a true number two. Welcome to the show, it's great having you. Seth, you are a longtime financial advisor. You've been in the business for, whoa, 15, 20, almost 20 years. And Money Wise is fortunate to have you here as one of our advisors, and good to have you here.

• 1:38Speaker 04

  Got it.

• 1:39Speaker 03

  Welcome.

• 1:39Speaker 04

  Love it here, yeah, absolutely love it, and excited for the show today.

• 1:42Speaker 03

  I'm excited too. We're going to first start by answering listener questions. Want to encourage anybody out there that's listening, please send a message our way. You can text, super easy, 661-396-1000, and again, it can be anytime, any day, and we'll be happy to get to it. So let's get to our first message. I'm going to go ahead and read it, and we'll, let's discuss this. Can you guys explain the best type of 30 to 60 day plan? To help pay off debt and how it helps. I know you aren't the Ramsey Show, but I've heard you talk about debt plans before. This is from Eddie and thank you Eddie for that. Great, great, uh, great question.

• 2:23Speaker 03

  And I, I, I think this is, this is worthy of a discussion because there are different philosophies out there in terms of how you can pay off debt. The 30 to 60 day plan seems pretty aggressive. Very aggressive. I guess depending on how much debt you have, you could pay off a debt in one day. You could have a one day debt plan if you have enough cash. Yeah. But if you have, depending on how much, what your cash flow is, what your income and what your budget allows. You know, you, you might need more than 30 or 60 days. I, I'd say in a perfect world, you'd want to go with the one day debt plan, which is if you've got the cash. If, if you have cash that is not working for you

• 3:05Speaker 03

  as much as the debt cost is to you, or there may be other reasons to get out of that debt. Then you pay off as soon as you can. One distinguish, one difference between Money Wise and the Ramsey Show is that the, the Ramsey tends to take a very hard line approach to debt. Meaning almost, almost there's no circumstance where it makes sense to, to, to go into debt. And I have a hard time with that because I, I feel that that debt isn't necessarily the, the issue. It's how we manage the debt that gets, that gets people into trouble.

• 3:48Speaker 03

  How, I know that there are some of us who just naturally are always going to have problems overspending if we have access to credit. And, and therein lies, if you were, you have to be self-aware enough to know if you're one of those people. You just should, you should avoid credit cards. You should avoid going into debt at all costs because you just sort of have to recognize that there, that, that you, you don't, you know, you don't have, um, you know, you Struggle with that similar we'd see this all all the time with substance abuse disorder. Certain people you just you know you don't you don't pick up that cigarette because you know

• 4:32Speaker 03

  once you start smoking you just won't stop you know whatever or alcohol so you want to you want to be very I want to be sensitive to this but in terms of debt and debt plans and debt schedules. I've compared it to exercise or health plans for people where it not not one size fits all and you want to have a plan or a schedule that fits your personality type and and so you know maybe maybe Seth maybe you can share kind of what you know kind of experience you have with.

• 5:10Speaker 04

  Yeah, so that's the first thing that caught my eye was 30 to 60 days like whoa you know because less than half of Americans have a thousand dollars in their savings.

• 5:19Speaker 03

  Yeah.

• 5:20Speaker 04

  So you know, most people don't have a big pile of cash they're sitting on where they can throw it at their debt, walk away debt free. That's that's not how this works, right?

• 5:28Speaker 03

  Right.

• 5:29Speaker 04

  So for my wife and I, we did use Dave Ramsey. We did do the debt snowball. You know, we eventually it took us about 18 months.

• 5:37Speaker 03

  Yeah.

• 5:37Speaker 04

  But it enabled us to it completely changed our lives. But I agree with you that Dave Ramsey is is good and awesome as he is and his program is it's a little extreme because especially when you go to buy a house, you know, these types of things, it's it's wise.

• 5:52Speaker 03

  House and a car, education. Can you explain sort of what what process you went through? What how did you actually implement the plan? What did you use?

• 6:02Speaker 04

  So you know, I had a background and I had done some advising and so I thought, man, I really know my way around finances, right? And then we had some really close family friends that told us to get his book, Total Total Money Makeover.

• 6:14Speaker 03

  Yeah.

• 6:14Speaker 04

  And so, you know, we read it, you know, cover to cover and.

• 6:20Speaker 04

  Decided, man, we're just gonna, we're just gonna go for it. And so we, we, I, I had some, some stocks that I, I had accumulated some mutual funds, sold them all and just started paying on debt. And if you're not familiar with the debt, Ramsey snowball, what you do is you pay down the smallest debt first. That was hard for me to swallow because I'm a math guy. I'm a numbers guy. Well, I could save this much more in interest if I paid off my higher interest, but it's not that. It's all psychological. And that's what I think the, the listeners, um, hopefully they know that, that personal finances, 80% uh, behavior, only 20% head knowledge. Most, most people deep down, they know it's just like you said, diet.

• 7:00Speaker 03

  Yeah.

• 7:00Speaker 04

  Oh, I gotta lose weight, right? This and that. And then Taco Bell on the way home from work.

• 7:04Speaker 03

  Right.

• 7:04Speaker 04

  You know what I mean? They know they probably shouldn't get Taco Bell.

• 7:07Speaker 03

  Yes.

• 7:08Speaker 04

  But that's one of the first steps with debt is like you said, if it's a diet, you have to go through and, and clean out your pantry, get rid of all the, get rid of all the salty foods, the snacks. It's the same thing with paying off debt. You need to stop the bleeding with the, the excess spending.

• 7:22Speaker 03

  Yeah.

• 7:22Speaker 04

  And if it's literally cutting up credit cards, canceling memberships, that's what you have to do.

• 7:28Speaker 03

  Right. Yeah. So the, the, the, the snowball approach is tackle the debt that has, is the smallest amount. So if you've got four credit cards and ranging from a hundred dollars up to a thousand dollars, go for the hundred dollar credit card first, pay that one off first. I, I, I've always struggled with this because I'm, I'm more of the avalanche approach, which it's the opposite of the snowball approach. Avalanche is, well, you tackle the debt that's the most expensive debt, the one that's costing you the most and get rid of that first. Because I, you know, like you, more of the, of the math and the numbers, I get motivated by that.

• 8:06Speaker 03

  But that, that's years ago when I was going through, uh, uh, changing my diet. I wanted to lose weight. It, that's what was effective for me was to, uh, essentially start, you know, tracking the numbers and seeing everything that I was eating. How, how many calories? How much fat is, is this, is, you know, are these things that I'm eating? And it was those, you know, those, those big meals, those big, uh, those. Whatever food items that I was recognizing were so much in calories that it wasn't, I wasn't going to be able to exercise my way out of it. I wanted to just sort of tackle. So I realized, okay, well, I'm just gonna have to cut out, you know, donuts or, you know, whatever it was

• 8:50Speaker 03

  just because I don't, I don't want to deal with that. And, you know, with debt, you know, for me, it's, it's just more effective to sort of, you know, put them all on a spreadsheet, look at, see what's, what's costing me the most and I'm going to tackle that one first because I want to pay as little interest as possible. But for a lot of people, it's, you know, that debt snowball is much more effective because you get a little bit of a, of a dopamine hit just by getting rid of that credit, that one credit card. You're like, oh, I want to do it again. Okay, now I'm going to do it again. And then pretty soon, man, that just feels great to have no credit card debt or bad debt. And so, you know, and, and for some people, 18 months, that seems like a very reasonable, I mean,

• 9:31Speaker 03

  for a reasonable amount of time. You mentioned, we were preparing for the show, you said, you need at least 90 days.

• 9:38Speaker 04

  Yeah. So anytime you're starting a new budget, um, you know, the first 30 days is just figuring out what are my expenses, you know? And, and if you're an old guy like me, it's literally on a, it used to be Excel, but now it's a Google Sheet. You know, I still to this day use a Google Sheet for my expenses, for my budget. But there's all kinds of apps, you know, you were mentioning some earlier, but basically that first 30 days is just kind of trial and error, you know? And then it takes 90 days, the studies show that it takes about 90 days for you to figure out, you know, you might think you're spending 150 on gas when it's actually 310 on average, right? And everything kind of shifts around, right?

• 10:16Speaker 03

  Right.

• 10:17Speaker 04

  So.

• 10:18Speaker 03

  Yeah. And 90 days also is a good period of time to get into, start forming different habits. You know, if you've, if you, you take a look at your budget and you recognize you're spending a high percentage on eating out, it might take you about 90 days to get used to not eat out every day or ordering Uber Eats or whatever it is that, you know, where your money is going. I'm a big fan of the technologies and most banks that, that people use offer a free budgeting software or, or program within your, your bank, which is really great because then for me, it just, it's real easy to use the. I use debit card for or credit card for everything and it just automatically knows

• 11:03Speaker 03

  where I was spending my money and it puts it right into the category and so then I can just follow it, you know, in real time. It does all the math for me and I can follow the categories in real time and it's also can get people, it'll freak you out. If you haven't ever done like a full analysis on your, on your, on your household budget, you know, if you, if you use some of these programs that like, like your bank will offer, it can, it could be like little eye opening when you start to see how much you're spending on certain things.

• 11:33Speaker 04

  Cause it categorizes it. It says, you know, eating out food is, oh my goodness. I don't think people realize just how much they spend on food. Unbelievable.

• 11:42Speaker 03

  I've seen the biggest things are housing and transportation and transportation probably being the one that sticks out the most for me just generally is how much people spend on their car. I mean, it's just off the charts how much people, it's, it's not, it's, it's very common for a thousand dollar car payment and, and that, that is a lot of money, folks. A thousand dollars and you're making these car payments. You can save a lot of money by hanging on to your car for as long as you can, buying a used car and having it repaired

• 12:22Speaker 03

  and maintaining a used car will, for most households, save an enormous amount of money. But what people often will say, and if you've heard this before Seth, I have to get a new car because I'm, my, my car I'm having now is starting to have breakdown. It's starting to have, I'm starting to need repairs and that is just an excuse to buy a new car.

• 12:45Speaker 04

  Do you see me grinning ear to ear over here? Do you, do you know what's going on with my wife's car? So yesterday she got stranded, um, you know, she, Monday's her day's off, so she was getting her nails done and the car wouldn't go into reverse. Long story short, I went after work, picked it up and it actually started, but all the, it was like a, like a, a Christmas tree. Everything was lighting up, right? So I took it, I took it into the To the dealership.

• 13:08Speaker 03

  Yeah.

• 13:08Speaker 04

  And got a call this morning and it's the, uh, I can't remember. It's basically the brains of the transmission.

• 13:14Speaker 03

  Yeah.

• 13:14Speaker 04

  2,500 bucks.

• 13:15Speaker 03

  Yeah. Ouch.

• 13:16Speaker 04

  So we had that conversation. I'm like, do I want to put 2,500 dollars into this car? You know, and we talked, but I know deep down, the right, that is where it comes to behavior.

• 13:24Speaker 03

  Yeah.

• 13:25Speaker 04

  The right thing to do is to use the emergency fund we have, suck it up, put, you know, let's get this car right. It's almost paid off.

• 13:33Speaker 03

  Yeah.

• 13:34Speaker 04

  But my mind started spinning because I know she wants a bigger car, something newer. She deserves it. She's my lovely wife, right? So, um, even, I want the listeners to know, even as advisors, you know, we don't just float around on these clouds. Like we, we are in the same, uh, same boat as you, having to make these decisions for our families every day.

• 13:53Speaker 03

  And the same bias of, you know, justification of that new car because, and it's usually the transmission or your engine. Cause usually, you know, it took several thousand dollars that you then go, well, why would I put in 2,500 dollars into a car? It's got a hundred thousand miles on it. I, I, I'm just gonna buy, um, next, next month, I'm gonna have another bill and another bill. And you start to justify it, but I've yet to see where it makes financial sense to buy a new car versus continuing to repair it. Because how many car payments is, will it take you to recover that 2,500 bucks?

• 14:27Speaker 04

  Exactly.

• 14:27Speaker 03

  If you're lucky and you got a $500 car payment after five months.

• 14:31Speaker 04

  There's your transmission.

• 14:32Speaker 03

  There's your transmission. And you think your transmission is going to go out every five months? No. Maybe your engine goes out, let's say after five months, your engine goes out, boom, another 2,500 bucks. Okay. So now you've got another five months of, of $500 a month. It's versus $500 a month for 50 months for your new car. It's just, it's always going to save you money to keep that junker and to ride it into the ground. And I don't, that, you know, I don't care what kind of piece of junk you're driving. It's going to be cheaper than a new car. That being said, and this is to your wife's, you know, you can do what you want with your wife's new car. But you get to a point and if, you know, there is, there is a lot of satisfaction out of having a nice car

• 15:16Speaker 03

  that you don't have to worry about constantly repairing it. I get that. And if you have your budget, if you were doing your other. Financial, if you're keeping your other financial house in order, knock yourself out, you know, buy a new car and, and go for it, you know, that's, that's nothing wrong with it. But if you are in a position where you don't have your emergency savings, don't get a new car. I'm with Ramsey on that one. Don't borrow and get a new car if you don't have your emergency savings, or if you've got a bunch of bad debt, like high credit card debt, high consumer loan, take care of that stuff first before you can sort of treat yourself to it.

• 15:55Speaker 04

  It's like a diet, when you're just starting on a diet, you probably don't want to go grab a big old extra large pizza the first weekend.

• 16:01Speaker 03

  That's right.

• 16:02Speaker 04

  But if you've leaned out, you're, you're 90, 180 days in, and you want to go have a cheat meal, same thing, same thing with your finances.

• 16:09Speaker 03

  That's right, Seth. All right, we're going to do this, we're going to take a break. I want to get to our guest, want to thank Eddie again for that message. If anybody's listening, you got a question or comment, send them our way, 661-396-1000. We're MoneyWise and we'll be right back.

• 16:21Speaker 00

  Are you an employee with a company sponsored retirement plan? Do you fully understand how you're invested and whether or not you are maximizing your retirement plan's options? For more information on a free assessment, contact MoneyWise's 401K specialist, Justin Leland, at 661-847-1000.

• 16:43Speaker 03

  Welcome to the MoneyWise Show. Thanks so much for tuning in. We're your hosts. I'm Sharad Waite here with Seth Perry, joined by our guest right now, Steve Murray from Murray Family Farms, is a bakersfield landmark, agritourism location. Steve, welcome back to the show.

• 17:01Speaker 05

  Well, thank you for inviting me back. It's just a ball to come here, so.

• 17:04Speaker 03

  It's always fun. I always, I always really enjoy having you on the show. I'm a huge fan of horticulture, growing food. I try, I try my best a couple of times a year to grow stuff in my backyard, and I'm getting a little bit more successful each time, but it is nothing like what professional farmers do and what they're going through. Especially, you know, let's get right to it, I've got to ask you about how things are going. Terms in agriculture world in terms of immigration and labor workers are you? I'm seeing a ton of headlines, a lot of news stories. What are you seeing, if anything, out there?

• 17:48Speaker 05

  Well, that was a lot of topics that you brought up all at one time.

• 17:51Speaker 03

  Yeah, sorry.

• 17:53Speaker 05

  I mean, we did have, you know, the Border Patrol come up from Coachella or down in Lake, what is it? El Central and they did just a three day swing through Kern County and literally parked in my back parking lot. And they were on the, you know, the, they were pulling over people on Highway 58. And then they were also parking along Fairfax, a number of the different laterals as well. And it just seemed like if what they were looking for was criminals, they were going to the right place. Because generally, even when we've seen this big, you know, huge, I don't know what it is, 10 million people coming to the United States. They didn't come to Bakersfield, that they went to the big cities where the services were.

• 18:35Speaker 05

  And so our, the people that work for us, the people that come in during our harvesting time, especially with cherries that are working for labor contractors are the same people that have been coming to us for a long time.

• 18:48Speaker 05

  And that, so again, you know, what's, what the controversy is right now is people that get swept up in the net. That they might be targeting somebody that is a criminal and have other people living in the house. And they get swept up and if they're undocumented, then they get hauled in as well. And that, I mean, I have my own opinion. I think that, you know, last four years, a lot of people came in and a lot of them came from a lot of parts of the world. And we need to really look at who's there. And then there's other people that have been here more than four years. And that there just is no real good workable worker program or whatever you want to call it, a residency. If you go to Mexico, you can go work and get a one year visa. And after four one year visas, you can get permanent residency.

• 19:33Speaker 05

  But it's a lot harder to become a citizen, but you could live your life and have property and have good employment in Mexico. And I just think we need to model more after how Mexico handles their, you know, their

• 19:46Speaker 03

  Their policy.

• 19:47Speaker 05

  Their policies. We don't have a policy. We don't have, the problem that we have is that we have worker programs. That they want to make the wages three dollars an hour higher than what our prevailing wages are and so you can't afford to bring them in and if you have to then you, you know, if the minimum wage is, we, every year it goes up 50 cents to a dollar an hour and that with the guest worker program we have right now, they're unworkable.

• 20:11Speaker 03

  So we currently have a guest worker program in California.

• 20:15Speaker 05

  It's a federal guest worker program and if you're in agriculture, call it H2A program.

• 20:20Speaker 03

  H2A?

• 20:21Speaker 05

  Yeah.

• 20:21Speaker 03

  And has, in your opinion, has that been effective?

• 20:25Speaker 05

  No, it's totally disastrous.

• 20:29Speaker 03

  So that's sort of what's forcing a lot of people to come here undocumented, you're saying?

• 20:34Speaker 05

  Yeah, well, I mean, that's not exactly what I'm saying. I'm just saying that we do not have any kind of a program where people could come here. If you go to Australia or New Zealand or anywhere else, they go to the islands and bring in people from the surrounding areas. They're bonded, that they pick them up at the airport. You know, you have to transport them to and from work. You have to take them to the bank. You have to give them literally far superior benefits to people that live here in order to have them work for us. But the programs are seamless and those, in countries like Australia, they don't have a workforce and that a lot of the cherries are picked by college students that go on vacation and will work for two or three weeks picking cherries and that pays for their vacation.

• 21:19Speaker 03

  Yeah, I know specifically about Australia, a little bit about their immigration policy because our oldest son lives in Australia currently, working towards getting his visa, his permanent visa to be able to, you know, permanently work there. He's working there now. But Australia required for the, at least the first six months, there were a certain number of hours, but it took my son about six months, he had to go to another part of the country, a rural part of the country and work in an industry that was lacking labor.

• 21:46Speaker 05

  Right.

• 21:46Speaker 03

  Which in his case was hospitality or agriculture. He ended up working in hospitality, worked at this bar and hotel dump.

• 21:58Speaker 03

  For like six months and worked his tail off, but it was part of, you know, their, part of just their, their immigration policy. After that, he can now, and now he's working in tech, doing what he wants to do. But it is, it, it did remind me of sort of some of the, some of the stuff that we lack here, especially in the Central Valley. Kind of going back to the, to the, to the farm labors. You mentioned you, you saw firsthand some of the immigration crackdown. How much is this impacting our, our farmers?

• 22:31Speaker 05

  For a very short amount of time, it was very disruptive because people just didn't want to be interviewed. That, uh, you know, I mean,

• 22:38Speaker 03

  Like interview dig?

• 22:39Speaker 05

  Yeah. You don't want to go through a interview where you might have a, you know, some kind of an infraction driving a vehicle or something. And anything like that will, could get you in trouble. And, you know, they're very, you know, we have, you know, great people here in our, in our country, in our state that are working for us and doing good work and that it's how do you sort through, you know, the diamonds from the dirt clods? When you're with the immigration services? This was not ICE. This was Border Patrol. And that, uh, it was for three days that people stopped going to work. And, and even if they had documentation, they still didn't want to go through the process.

• 23:17Speaker 03

  This is several weeks ago, right?

• 23:18Speaker 05

  Several weeks ago, yeah.

• 23:19Speaker 03

  Since then, have we, has there, haven't been any other disruptions or?

• 23:24Speaker 05

  Allegedly they're moving farther north of Fresno, but I really have not heard a lot of the details on it. And that, uh, all I know is what if for a few days that we hadn't seen anything like that in a decade. And that, uh, and it was before Trump actually was in office. So

• 23:36Speaker 03

  Right.

• 23:37Speaker 05

  Uh, it was kind of, nobody expected that. So anyway, as far as that, we hope that, um, you know, the hope that, um, cool minds will prevail and that we will be able to come up with a process where people are properly documented. And, um, if you've been here for, you know, for four years, you know, that, um, get, get the ability to have residency.

• 23:57Speaker 03

  Yeah. Right.

• 23:58Speaker 05

  And if you call it immigration, if you call it citizenship, then it won't fly with one party. And if they call it a guest worker program or, or residency, then it won't pass with the other party. So. They're kind of loggerheads over the whole thing of common sense.

• 24:12Speaker 03

  Do you foresee if, you know, let's just, I don't know, it's hard to know how much more enforcement or deportations could happen, but is there, is there a general concern in the agricultural community that we could lose a large workforce and you'd have, you'd have to a huge increase in labor costs?

• 24:37Speaker 05

  You know, it happened a few years ago down in Arizona against the Mexican border, where they went out and actually started raiding vegetable fields and just literally vegetable harvest stopped. And so that created the political pressure to back off.

• 24:53Speaker 03

  What, what happened in that scenario? So the farmers literally just, they just let the crops just rot?

• 24:59Speaker 05

  Yeah. When your lettuce is ripe, you don't have but a week to get it off because there's just a peak period of time. The same thing if you're in other crops that when it's ripe, you've got to get it off. So it was very disruptive and we haven't seen that again. And even this was a very short, short duration, but.

• 25:16Speaker 03

  In that case, I guess you would also, the federal government could be on the hook for whatever crop insurance that they might be covering or.

• 25:24Speaker 05

  It's not an insurable disaster to have no workers show up.

• 25:27Speaker 03

  Oh, boy. Oh, my gosh. Right. Yeah, you're right.

• 25:31Speaker 05

  But I mean, the other things that are going on in the state right now, it's all about water. That if you're in the northern third of the state, that they've had 200% of regular water. If you're in the northern middle part of the state, you've had 100% of what a normal year is. And if you're in the southern Sierras where our water comes from, they were about 70% right now. Now we've got rain coming tonight and.

• 25:52Speaker 03

  Few days.

• 25:53Speaker 05

  They're only good for four days weather. I just can't believe that what, what a great job of being a weatherman because you can be half wrong.

• 25:58Speaker 03

  I know.

• 25:59Speaker 04

  They don't know whether it's going to be hot or cold.

• 26:01Speaker 05

  Yeah. The dry, the wettest year in history was what they projected as the driest year in history.

• 26:06Speaker 03

  Oh, my gosh. The water issue, we're going to take a break. We come back, I want to talk about the water issue because that, you know, stigma and, and now the, you know, the potential for, for more droughts are. Sinking Central Valley, there's so many factors that are facing, farmers are faced with right now economically speaking. So I'd love to get your input on kind of what's going on with the water situation. We're joined by Steve Murray from Murray Family Farms. We're Money Wise. We'll be right back.

• 26:31Speaker 00

  Are you nearing retirement and currently working with a financial advisor? Are you not sure if you're invested appropriately? Call our offices at 661-847-1000 to sit down with a Money Wise financial advisor for a no obligation assessment.

• 26:51Speaker 03

  Thanks for tuning in. We're the Money Wise Show. I'm Sharad Waite here with Seth Perry. We've got a great guest joining us today, Steve Murray from Murray Family Farms. He's a farmer, business owner, and just all around good guy. Steve, we've got a great question here. It says, "Great guest and an overall good egg. Big fan of the Murrays. I was wondering how the recent fires in insurance hit local farmers moving forward, or have they already been dealing with high costs?"

• 27:17Speaker 05

  Well, I'll start with us specifically that, you know, a portion of our business is dealing directly in farmers markets and that this last year we were voted most loved farmer in the Santa Monica Farmers Markets. Santa Monica, if you, it's next to Malibu and then it's next to the Pacific Palisades. They're just people with a lot of disposable income and we can go down and sell cherries for $20 a pound and if they're good enough, they'll pay for it. There's people that have strawberries there that are just really good and people pay better prices for it. And so we have seen a big swath of our customer base. Alta Dina is really important to us. We have a, you know, a great relationship there that they're gone. And so I would say

• 27:59Speaker 05

  that with that aspect of our business that we're going to see some of our best customers are homeless. In fact, we delivered quite a bit of mandarins and whatnot. Some of the business slowed down and we donated five pound bags of mandarins and distributed it through the farmers markets for free for people that are finding themselves homeless. So we're affected by that personally, but then that it's going to affect everything from buying a two by four to.

• 28:25Speaker 05

  You know, like I said, our customers that if you look at you're going to need to find a contractor, you're going to need to find, you know, supplies to do any construction. If you were thinking about adding a garage, it's going to go up and that we're just close enough that it's going to affect us in all of those areas. But I would just say as far as the fires are concerned, this thing, we were already hit by the, by the, the lack of insurance companies that for a number of years that we didn't keep up with the cost. The insurance company said, we've got to raise our rates or we're going to leave. And then they left.

• 28:56Speaker 03

  Yeah.

• 28:56Speaker 05

  And so the ones that are left are the ones holding the bag down south because they, that they're a pool of money called the, the

• 29:02Speaker 03

  Fair Plan.

• 29:03Speaker 05

  And they're talking a 22% raise in the insurance costs.

• 29:07Speaker 03

  Yeah, I saw just this morning State Farm is requesting a 22% increase on their, for their insurance.

• 29:13Speaker 05

  Yeah.

• 29:13Speaker 03

  Homeowners in California. I mean.

• 29:15Speaker 05

  That's what they did on cars last year. It was about 22 or 24%.

• 29:19Speaker 03

  Now, now the fair plan is way underfunded and it's, you know.

• 29:24Speaker 05

  And way expensive.

• 29:25Speaker 03

  And way expensive. Yeah.

• 29:26Speaker 05

  Beyond anything you can imagine.

• 29:28Speaker 03

  So you've mentioned before in the past, how many, how much of your costs have gone up as a farmer? Explain again what happened with insurance for you.

• 29:36Speaker 05

  Uh, we're next to a grass field. And so with our gas station and, and our retail store, it went from maybe a four to $7,000 a year for fire insurance because it was just folded into our insurance to where this year they came back and said, it's $173,000 for the year. And so we were able to shop around and find a non-fair plan for 80,000 a year. But that's $8,000 a month that we have to pay, that we never had to pay before. And, and that we went out of the fair plan and went to a provider that gave us insurance. And obviously we're going to go up, but if we were in the fair plan, then I have no idea what they would do next year.

• 30:17Speaker 03

  Right.

• 30:18Speaker 05

  As far as how they got to recapture all those losses. Uh, other things going on in water, it's that time of year that, uh, like I said, that's wet to the north. We're 70% of normal right now. Rain's coming in. Pray for rain.

• 30:29Speaker 03

  Yeah.

• 30:30Speaker 05

  That, uh, we're hoping that we get, you know, the weather change and we get some of these, you know, atmospheric rivers to come through us here. But, um, we talked a little bit about the labor situation, um. It's a tough place to be an employer. It's a tough place to be a farmer. It is a lifestyle and it is something that really is enjoyable and my whole family is involved in our family business. But that, you know, I don't know a farmer that made money last year. And that you take a look at between commodity prices, between the costs of productions. We had 28% growth in our production and that the associated costs with growing our crop,

• 31:12Speaker 05

  our water, our labor, our fertilizer, or even though a lot of what we do is organic, that's even more expensive fertilizer. That all the costs have gone up far faster than the prices have gone up and a lot of commodities went down. Almonds are down, walnuts are, I don't think they get 40 cents a pound to grow walnuts right now.

• 31:31Speaker 03

  Holy cow. You're paying so, I mean, how much in water? Way more that just in water.

• 31:38Speaker 05

  I don't even know what break even is, but a lot of guys didn't have debt. Their old walnut orchards are now pulling them out. They're all going out because they just don't see three bad years in a row and most commodities go away.

• 31:52Speaker 03

  Well, the other, you know, there's been one, one attack after another on the livelihood of farmers in our, in our Central Valley. Besides just the cost of commodities and insurance, the rapid increase in interest rates that were due to the, due to the inflation has, you know, farmers rely heavily on finance to be able to plant crops and do these things. Talk about how that's impacted farmers.

• 32:23Speaker 05

  Well, usually farms have two different kinds of loans. One of them is mortgages and that's for your land and then the other is your operating line of credit. And even though your operating line is backed by your equity that you have in the land, the, the operating lines of credits are usually not fixed because it's just a one-year loan and at the end of the year you pay it back. And so you're, with these higher costs that right now it's about 8% for your operating line of credit, unless you're fortunate to not have to borrow money. And that a lot of farmers have low debt to equity, but they still have to have operating lines and the operating lines are what are so costly.

• 32:58Speaker 03

  Because they went probably from, you know, under, under 4% or 3%,

• 33:02Speaker 05

  Two and a half percent.

• 33:03Speaker 03

  Two and a half percent to 8%, you know, fourfold increase in their

• 33:07Speaker 05

  Yeah.

• 33:08Speaker 03

  Cost for finance.

• 33:09Speaker 05

  And you know, even for a small farm, an average sized farm, you're looking at a difference of, you know, hundreds of thousands of dollars in cost, just on the money side, you know, just on the financing side of it.

• 33:20Speaker 03

  Yeah.

• 33:21Speaker 05

  I just, like I said, we're seeing, because of the lack of water security, we're seeing the value of land going down and where a lot of good irrigated land was worth 25, $35,000 an acre, pistachios, $45,000 an acre, a lot of this land now is down to 24,000 an acre. So even your ability to go get financing, there is diminishing equity where, where a lot of growers would like to stay farming and that they're not going to be able to renew their operating lines. So without an operating line, even if they're in good equity shape for their land, without, without operating money, you're not going to be able to operate.

• 34:03Speaker 03

  How are you starting to see a lot of people exiting the, the, the, the industry?

• 34:11Speaker 05

  You know, some of the biggest, brightest, multi-generational families, the most highly, highly respected, making a fiduciary responsibility decision to get out or transfer, and just like the commercials say on the radio, you know, sell the farm and maybe buy the land underneath a Dutch Brothers coffee shop or a, or a Dollar Tree. I know farmer, a lot of people are looking at having, you know, 7% returns on a long-term, you know, lease.

• 34:42Speaker 05

  Being, you know, dependable on something for their kids to be able to have a legacy that used to be the farm. Yeah. The problem is the, I mean, is our food. The San Joaquin Valley, this is our, this is. Half of all the fruits and vegetables in the United States.

• 34:59Speaker 03

  Yeah, half. Half of all fruits and vegetables are from here. And there's certain crops that like, it's almost 80% almonds and pistachios, carrots.

• 35:10Speaker 05

  Yeah.

• 35:11Speaker 03

  Yeah.

• 35:11Speaker 05

  So what happens? I mean, I don't want you to paint a super gloomy picture, but. It's not a gloomy picture. It is a fact. Yeah. That over the next 10 years, Kern County, I say it a lot, has 860,000 irrigated acres in this county, and we're going to lose a quarter of a million acres. 250,000 acres will be dry in 10 years on our trajectory. Just, that's not speculation, that's not saying crisis, but that, and the way that it is being done is that by making water more expensive, that you use less of it. And so first thing you notice if we don't grow cotton anymore, that you're not going to grow alfalfa here because the water's too expensive for it. Unless you have a dairy operation, you're feeding your own cows.

• 35:53Speaker 03

  That's always, it's a frightening statistic that, you know, roughly a quarter of our ag land is going to go fallowed. When it doesn't seem, my understanding is we're pretty much using all of the ag land that we have available on the planet. Meaning where there is, where you can grow food, food is being grown there. We don't have excess land to produce more than what we're currently. And yet, here we are in the most fertile valley in the world. I just can't wrap my head around how we're going to lose a quarter of it.

• 36:27Speaker 05

  And the most sustainable, a lot of places in the world are salting out. After, you know, multi, multi generations of farming the same dirt, the salts are accumulating and you can no longer grow good crops on them.

• 36:37Speaker 03

  Yeah, there's a big movement towards soil, you know, soil preservation. We're losing, we're losing our soil, basically.

• 36:43Speaker 05

  And you look at the county and they lost their tax base in oil, so they're $15 million upside down. When you start taking farmland without water, it's worth $200 an acre. With water, right now it's worth, you know, twenty-five thousand dollars an acre. Some places fifteen, where it used to be thirty-five.

• 37:00Speaker 03

  Yeah.

• 37:01Speaker 05

  As those values go down, the tax assessments go down. And the county, you go to the county and say, I want to put in a development along the freeway like we have. And they said, it's going to cost you, you're going to have to have CEQA, you're going to have to have a EIR, you're going to have to have consultants, it's going to take you three years and hundreds of thousands of dollars. And they don't act like where their paycheck is coming from.

• 37:22Speaker 03

  Right.

• 37:23Speaker 05

  We've got to find something other than ag and something other than oil, or we're going to be Barstow.

• 37:29Speaker 03

  Yes.

• 37:30Speaker 05

  Nothing against Barstow.

• 37:31Speaker 03

  No. But we're definitely not Barstow.

• 37:35Speaker 04

  That's got to be bad if Bakersfield is putting Barstow below. I mean, man, that's low. Sorry, Barstow.

• 37:42Speaker 03

  So let's, let's change course to maybe a more positive subject. Murray Family Farms, Seth was just mentioning your, your visit you had.

• 37:51Speaker 04

  Yeah, we went out, we went to watch the George Strait concert and, you know, we made, we made your place, the pit stop on the way home for an okie pie. I think, I think that's what this, I think that's what this listener wanted to really know is how is the price of okie pies going to be?

• 38:05Speaker 03

  Yeah.

• 38:06Speaker 05

  You know, we, we've really held them down. So we started off, you know, just losing so much money. We thought we'd just simplify the menu down until it's just okie pies. And now we're doing great.

• 38:18Speaker 04

  Good choice.

• 38:19Speaker 05

  We have a kitchen that is actually profitable and when you can almost never make money in a kitchen.

• 38:24Speaker 04

  Would you mind talking about, and if you're not comfortable, totally understand, but, you know, I was just reading up a little bit on the history and about you. Was it your, your grandfather?

• 38:33Speaker 05

  I mean, on my mother's side, we're farmers down in Riverside. My father died when I was a teenager and, and we went bankrupt. And I started off as a gardener, I took out the lawn and was gardening in the backyard, went to UC Riverside, got a degree. And so Vicki and I are the founders of Murray Family Farms. We traded our house in Bakersfield for a house out in the country and it was a dive. And that for nineteen years, we used irrigation water in the house because the North Ridge earthquake broke our well. It was dry seven hundred feet deep. And so we didn't even have running water. And went to an ag leadership program, you know, two-year ag leadership program. And what I learned was that all the development was on the freeways and we were on the intersection of two dirt roads.

• 39:17Speaker 05

  And so we ended up buying. The off-ramp that's on 58 and we were able to buy an off-ramp down on I-5 also and that as Agland's going down, that that that that real estate is going up in value and it keeps us balanced to where we can borrow money and still farm.

• 39:32Speaker 03

  Yeah.

• 39:33Speaker 04

  What would you say to the the aspiring entrepreneur, you know, yours is a niche, right, farming, but what do you say to that young, struggling man or woman out there that's because I'm sure you've you have some stories to tell, right?

• 39:45Speaker 05

  Yeah, I went to Alba Cell if anybody's been here.

• 39:47Speaker 03

  Oh, yeah.

• 39:48Speaker 04

  I remember picking fruit out there.

• 39:49Speaker 05

  We took our kids out there and that and when we were looking at this and that Al, I said, Al, I'm thinking about because he'd have gotten out and I said, we're looking at maybe getting in and what would you do differently? And he said, I would have gotten out three years earlier.

• 40:04Speaker 03

  I was gonna say, I don't know a farmer that says, yeah, get into it. This is awesome. It's it's it comes from a deeper place. You mentioned your father, your grandfather even. It's on your website, the story of your grandfather, uh, passing away from a bee attack on the day that your mother was born.

• 40:24Speaker 05

  I have a matriarchal family because that, you know, my father died young and my mother was the matriarch. My mother's father died the day she was born from bee stings and and and burns and that her mother was was a realtor, a farmer, you know, a leader and it's something that only happened in California because we had community property laws here. Whereas anywhere else, all of the great female philanthropists come from California because it had community property rights and they could represent themselves.

• 40:53Speaker 03

  Unbelievable. I didn't even thought about that.

• 40:55Speaker 05

  Yeah, look at it. Stanford scripts, you know, whatever you look at a great woman, she's from California.

• 41:00Speaker 03

  Yeah. And that because it wasn't just, it was just recently that a woman could even like buy a home, you know, qualify for a mortgage in the in the country, talking about just, you know, a few decades ago, that that wasn't even the case. So you got you got to get the women in charge there.

• 41:16Speaker 05

  It started in Spain when they had the war with the Moors. All the men were dying and then their wives would lose everything. Their widows could not inherit the real estate. And so that's where the community property laws came from with Spain.

• 41:28Speaker 03

  Yeah.

• 41:29Speaker 04

  Interesting.

• 41:29Speaker 03

  Yeah, it's I have so much admiration for farmers because of the roller coaster ride that it is to to to produce a commodity like this. But you you've how have you been able to overcome not just not just the the the challenge that come with that with that field of work? But your own your own personal, your own personal issues.

• 41:50Speaker 05

  And we're not even talking about the tough stuff.

• 41:52Speaker 03

  And when you come here and you laugh and you smile about these things, and we're talking about the demise of the entire industry.

• 42:01Speaker 05

  You know, I I just think that it's it is passion, perseverance, and a positive attitude.

• 42:08Speaker 05

  That you're truly the only people you can talk to, especially cherry growers, is what they hope is they make enough money to do it again next year. And that people that are not in agriculture, and especially not farming cherries, have a hard time wondering, understanding that the goal is to do it again.

• 42:25Speaker 03

  Yeah.

• 42:25Speaker 05

  It's not even to make money.

• 42:28Speaker 04

  You need to quote that. That that needs to be a quote, you know.

• 42:32Speaker 03

  Your goal, just do it again.

• 42:36Speaker 03

  What's happening out at Murray Family Farms? Any any events, activities happening?

• 42:40Speaker 05

  Well, first thing we have is on, we have the Valentine's Day. A lot of people come out Valentine's Day. It's on a Friday, Saturday, Sunday. And we actually the weekend before that, you can come out, you pick organic citrus. So we've got organic citrus that, and then a lot of a lot of couples come out for for Valentine's Day. On Easter this year, that we're going to do something like the White House does, and we're going to have Easter egg rolls off of our, we've got several. We have like an AstroTurf slide, and we've got a giant slide, and we're going to do Easter egg rolling for competition. Where you buy a wooden, or I think it comes free with admission, but a wooden Easter egg, paint it, roll it, and it's kind of like the old box cars or whatever.

• 43:22Speaker 03

  Yeah, like an Easter egg race.

• 43:24Speaker 05

  Yeah, Easter egg race.

• 43:25Speaker 03

  Oh, it's fantastic.

• 43:26Speaker 04

  We absolutely love. We love going out there. I'm just, we love it. My boys love it. I've got some young boys.

• 43:31Speaker 05

  That's great.

• 43:32Speaker 04

  Whose idea? I gotta know, who is the mind behind pivoting a little bit into more of an entertainment?

• 43:38Speaker 05

  Well, everybody knows me as Vicky's husband.

• 43:42Speaker 03

  We gotta get Vicky on the show.

• 43:45Speaker 04

  Can we schedule her?

• 43:46Speaker 05

  That was really her dream that we did farmer's markets when they were babies. And that we had babies in the backpacks going to Santa Barbara first.

• 43:54Speaker 03

  This is back before farmer's market were like hip.

• 43:56Speaker 05

  Yeah, just they were the first ones that were out there that.

• 43:58Speaker 03

  Yeah.

• 43:59Speaker 05

  And my kids would go trade cherries for mangoes or passion fruit or different things that were unusual. And that got the bug in them as well, but it was, we really, really enjoyed people saying, thank you, thank you, thank you. You're, why are yours taste so much better than everybody else's? And we don't really know. I mean, we basically organic practices and try to put it back into the soil. But we started really loving dealing with the pop, with the public and a lot of farmers don't have that personality.

• 44:28Speaker 03

  Yeah.

• 44:28Speaker 05

  That any news is bad news. And so they don't want to talk to the media. They don't want to really face the public. If you don't have that personality, you don't go into agritourism. And then the other is that you, you know, you gotta have modest expectations. What do they say is you gotta have a big, two big buckets of money so that when you lose the first one, you still got the second one and farm it till it's gone.

• 44:51Speaker 03

  And do it again.

• 44:52Speaker 05

  Another quote.

• 44:54Speaker 03

  Hopefully do it again and lose more money.

• 44:57Speaker 05

  Because it's a lifestyle.

• 44:59Speaker 03

  Yeah. So again, kind of going back to what Seth was asking you, you, would you recommend? If, if, if a young, you know, student comes to you and they say, hey, I'm looking again into farming agriculture. Let's just maybe let's say just agritourism.

• 45:15Speaker 05

  Yeah.

• 45:15Speaker 03

  What, what, what would you say to them?

• 45:17Speaker 05

  I would say to anyone, absolutely. I think that, that they're, that the American dream is here in Bakersfield. And it is completely surrounding this agricultural and this oil that these oil companies were not drilling the wells. It was private businesses that were contracting because the oil companies didn't want to have legacy employees. And same thing is in the farming that you can. Buy, buy dead beehive, go catch a swarm, get up to 10 hives, buy 10 hives for $200 each for, and then get paid $200 each for pollinating an almond orchard, and then you get another $200 worth of honey each. You've got your hives, and you've got money, and you've got honey,

• 45:59Speaker 05

  and then you double down and make them, you know, you can do it, you drive a truck, you buy a truck, you're a trucking company. You can be a picker, then you can be a crew leader, then you become a gunnysacker, and then you become a contractor. And that the dream and the models that we have in this community are people that persevered, worked really hard, and had positive attitudes. And everybody's aunts and uncles in this community come from that grit. And that, uh, that, if you're in this valley, you should have some skin in the game.

• 46:33Speaker 03

  Yes.

• 46:33Speaker 04

  And man, talk about skin.

• 46:35Speaker 05

  And a good job.

• 46:37Speaker 03

  Yes.

• 46:39Speaker 05

  Don't quit your day job too soon.

• 46:41Speaker 03

  Yeah. If I could figure out a way to make a living just out of what I grow in my backyard, man, I'd do that in a heartbeat. It's nothing, there's something so satisfying about growing food, and everybody should have some experience in knowing what it takes to grow food. You just don't realize how much effort and resources go into growing anything.

• 47:03Speaker 04

  We take it for granted. We just go and get anything we want right there at our fingertips.

• 47:08Speaker 05

  Literally have endorphins when you take a shovel and turn the soil over, and the aromas that come up. The reason you see old farmers driving tractors once they got people that could do that, is because they're just getting high on the oxidation of all of the biomass in the soil. And when you're gardening and water's going down a furrow, that there is something about that, that the people that didn't have those traits went extinct.

• 47:30Speaker 03

  Yeah, that's right. Lastly, we've got somebody here asking, a listener asking about if there is, he says, this is heartbreaking, but is there any plans or anything we can do to save that land?

• 47:46Speaker 04

  Can you answer that in the last 30 seconds?

• 47:48Speaker 03

  We save the land.

• 47:50Speaker 05

  Come pick blueberries.

• 47:51Speaker 03

  There you go. Go visit Murray Family Farms. Taste how delicious food can be when you do it right. Yeah. Steve, thank you so much for coming on the show, taking the abuse of the world on, you know, with all of the headwinds that farmers are taking. You just come in and you just bring so much positivity. It makes me feel, even though I know the reality, I feel like I understand the reality of the challenges that farmers face. Just hearing you talk gives me hope.

• 48:23Speaker 05

  Hope, exactly.

• 48:24Speaker 03

  Maybe, maybe things won't be as bad as we think.

• 48:27Speaker 05

  Exactly.

• 48:28Speaker 03

  Hopefully.

• 48:29Speaker 05

  I bought this book and it was called The Philosophy of Money.

• 48:32Speaker 03

  Oh, yeah.

• 48:33Speaker 05

  Two things. Things are not as bad as you think, and they're also not as good as you think.

• 48:37Speaker 03

  Yeah. Amen to that. And we're going through a lot of, a lot of change, a lot of, a lot of uncertainty right now of people, but that is definitely good, good words of wisdom. That's Steve Murray from Murray Family Farms. If you haven't heard about him, go check him out. You can go to murrayfamilyfarms.org or go check out their place over off of 58 on your way out of town or into town. We want to remind you, if you missed any of this show, you can go to moneywiseguys.com, but remember these three things. Be smart, be safe, and always be money wise.