Four Years of Drought Add Up to Lost Cash and Jobs for California Farmers and Farmworkers
Even with the potential for a “Godzilla El Niño” on the horizon, California’s very bad, historic drought, the worst in 1,200 years, is still a very bad, historic drought—and the parched state might not be quenched even by the torrential rains this winter is likely to bring.
None of which is good news for the state’s agriculture industry, one of the largest in the country, which is being stretched thin in many ways after years of too dry weather and massive cuts in water deliveries. On Tuesday, researchers from the Center for Watershed Sciences at the University of California, Davis, helped quantify the effects in a new report on the estimated economic impact of the drought for 2015.
Overall, the drought will cost farmers $1.8 billion this year, with 10,100 jobs lost for seasonal farmwork. Broadly speaking, the cost could climb as high as $2.74 billion across connected sectors, such as processing and transportation, with the creeping job losses amounting to 21,000.
That apparently is not dire straits, however: "We're getting by remarkably well this year—much better than many had predicted,” lead author and professor emeritus of agriculture and resources economics Richard Howitt said in a press release, “but it's not a free lunch.” The state Department of Food and Agriculture values the industry at $46.4 billion.
Farmers are expected to fallow nearly half a million acres this year, 99.5 percent of which are in the arid Central Valley—that’s a 25 percent increase over 2014. And while farmers have been able to make up for a full 70 percent of water shortages by turning to groundwater, aquifers are massively overtaxed—NASA puts the state’s underwater reservoirs at an 11-trillion-gallon shortfall—and pumping out what water remains is becoming increasingly expensive. According to the report, groundwater pumping costs have increased 31 percent over 2014, due to more water being pumped and being pumped from deeper levels in the aquifers as less shallow wells go dry.
If the drought continues through 2017, the report estimates that the effect will be 6 percent worse than this year, with a water shortage of 2.9 million acre-feet. While groundwater has allowed farmers to keep producing, decreased capacity and lowering water levels in the aquifers will make such a high level of substitution impossible, adding to the costs—in terms of lost revenue, jobs, and fallowed acres.
Despite the drought’s persistence, consumers have yet to see much of a change in prices at the grocery story. Price inflation was in line with the 20-year historic average, according to the USDA’s Economic Research Service, and 2015 prices will see “slightly lower-than-average” inflation. Forecasting for 2016 looks much the same at this point, but ERS does allow that “severe weather events could potentially drive up food prices beyond the current forecasts.”
“In particular,” the report continues, “the ongoing drought in California could have large and lasting effects on fruit, vegetable, dairy, and egg prices.”