One commodity after another is feeling the impact of the state’s epic water shortage. The great Sacramento Valley rice crop, served in sushi restaurants nationwide and exported to Asia, will be smaller than usual. Fewer grapes will be available to produce California’s world-class wines, and the citrus groves of the San Joaquin Valley are producing fewer oranges. There is less hay and corn for the state’s dairy cows, and the pistachio harvest is expected to shrink.
Even the state’s mighty almond business, which has become a powerhouse in recent years, is coming in smaller than expected. That’s particularly troubling to the thousands of farmers who sacrificed other crops in order to keep their almond orchards watered.
While many crops have yet to be harvested, it’s clear that the drought has carved a significant hole in the economy of rural California. Farm income is down, so is employment, and Thursday’s rain showers did little to change the equation.
An estimated 420,000 acres of farmland went unplanted this year, or about 5 percent of the total. Economists at UC Davis say agriculture, which has been a $44 billion-a-year business in California, will suffer revenue losses and higher water costs – a financial hit totaling $2.2 billion this year.
Rising commodity prices have helped cushion at least some of the pain, but more hurt could be on the way. With rivers running low and groundwater overtaxed, the situation could get far worse if heavy rains don’t come this winter.
“Nobody has any idea how disastrous it’s going to be,” said Mike Wade of Modesto, executive director of the California Farm Water Coalition, an advocacy group based in Sacramento. “Is it going to create more fallowed land? Absolutely. Is it going to create more groundwater problems? Absolutely.”
“Another dry year, we don’t know what the result is going to be, but it’s not going to be good,” Wade said.
Calculating total job losses related to the drought is difficult, especially in an industry in which many workers are transient and much of the work is part time. The state Employment Development Department, drawing from payroll data, said farm employment has dropped by just 2,700 jobs from a year ago, a decline of less than 1 percent.
But experts at UC Davis say they believe the impact is more severe. Richard Howitt, professor emeritus of agricultural economics, said he believes the drought ultimately will erase 17,000 jobs. He bases that, in part, on the increased number of families seeking social services.
The human cost shows up at rural food banks, which are reporting higher demand for assistance from farmworkers and their families. At the Bethel Spanish Assembly of God, a church in the Tulare County city of Farmersville, the number of families receiving food aid every two weeks has jumped from about 40 last year to more than 200. Farmersville, a city of 10,000, is at the heart of a region that grows an array of crops, from lemons to pistachios to grapes.
Economist Vernon Crowder, a senior vice president with agricultural lender Rabobank, said farmers went into this difficult season with a couple of advantages: Most commodity prices have risen in recent years, and most growers are in pretty good financial shape as a result. But another dry year could bring more serious hardship, he said.
“They have a little bit of cash to withstand this,” Crowder said. “They’re going to get through it. The real question is what is going to happen next year.”
Similar questions are being raised in the California wine industry, which produces much of its volume in the Modesto area. The last two grape harvests were extraordinarily strong, leaving an overhang of product that should help offset the slight declines in this year’s harvest.
“Pricing should be steady,” said industry consultant Robert Smiley, a professor emeritus of business at UC Davis.
http://www.sacbee.com/2014/09/28/6739735/california-harvest-much-smaller.html