The agricultural industry faces unprecedented challenges, from shifting commodity markets to labor shortages and automation. In a recent AgNet News Hour interview, Nick Foglio of Foglio Commodities shared timely insights into hay markets, wine trends, raisin and nut production, and what California growers must do to stay competitive.

Hay and Dairy Market Trends

Foglio opened with a look at the 2025 hay market, where soft commodity prices and oversupply have shaped the season. Favorable canola and soybean meal pricing allowed dairies to supplement feed at reduced costs, while wet winters added cheaper dry-land feed, softening the market further.

The first half of the year saw resistance due to imported hay inventory, but the second half required price corrections and higher volume movement. One bright spot was dry cow alfalfa, which outperformed 2024 thanks to less low-quality weed hay available.

With milk prices softening and exportable inventory staying in-state, Folio expects continued pressure on hay pricing going into winter.

Wine Market Shifts

Alcohol consumption continues to decline, particularly among older drinkers and younger consumers who are increasingly health-focused or shifting toward cannabis alternatives. Foglio sees single-serve packaging as a strong opportunity for drawing new wine consumers by reducing the commitment of a full bottle.

His advice for new wine drinkers:

For the wine market to grow, Foglio says the industry must shed its elitist reputation and present wine as casual, accessible, and versatile for everyday dining and gatherings.

Raisins, Almonds, and Pistachios: Vertical Integration Required

Discussing raisins and permanent crops, Foglio stresses that the future belongs to vertically integrated operations. Modern, profitable raisin production now requires:

Without this structure, staying competitive becomes difficult. Foglio highlights Sun-Maid and National Raisin as examples of operations thriving through innovation and strong marketing.

Almonds and pistachios remain profitable markets, but Foglio warns that overplanting could soften pricing. Growers must carefully assess whether to maintain current orchards, replant, or diversify into alternative crops based on return-on-investment outlooks.

Labor, Automation, and Rising Costs

Labor remains a top pressure point. With California’s minimum wage increasing, more farms are turning to automation and mechanization. But Folio warns that growers must evaluate ROI carefully: expensive tech with a short lifespan—much like wind turbine investments—may not justify its cost.

Growers must make immediate, ROI-positive decisions, balancing labor shortages with the need for efficiency and long-term operational sustainability.

Managing Change in Agriculture

Foglio’s closing message is clear: agriculture is at a crossroads. Success in today’s environment requires:

Growers who adapt, innovate, and invest wisely will be best positioned to meet the evolving challenges of California agriculture.