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California drought

Drought Costs Calif. Economy $2.2bn

California droughtThe 2014 drought has cost California’s economy $2.2 billion, according to a report from the University of California, Davis.

The UC Davis Center for Watershed Sciences study updates estimates on the drought’s effects on Central Valley farm production, presents new data on the state’s coastal and southern farm areas, and forecasts the drought’s economic fallout through 2016.

The study found that the drought — the third most severe on record — is responsible for the greatest water loss ever seen in California agriculture, with river water for Central Valley farms reduced by roughly one-third.

Other key findings of the drought’s effects in 2014:

  • Direct costs to agriculture total $1.5 billion (revenue losses of $1 billion and $0.5 billion in additional pumping costs). This net revenue loss is about 3 percent of the state’s total agricultural value.
  • The loss of 17,100 seasonal and part-time jobs related to agriculture represents 3.8 percent of farm unemployment.
  • Some 428,000 acres, or 5 percent, of irrigated cropland is going out of production in the Central Valley, Central Coast and Southern California due to the drought.
  • The Central Valley is hardest hit, particularly the Tulare Basin, with projected losses of $810 million, or 2.3 percent, in crop revenue; $203 million in dairy and livestock value; and $453 million in additional well-pumping costs.
  • Agriculture on the Central Coast and in Southern California will be less affected by this year’s drought, with about 19,150 acres fallowed, $10 million in lost crop revenue and $6.3 million in additional pumping costs.
  • Overdraft of groundwater is expected to cause additional wells in the Tulare Basin to run dry if the drought continues.
  • The drought is likely to continue through 2015, regardless of El Niño conditions.
  • Consumer food prices will be largely unaffected. Higher prices at the grocery store of high-value California crops like nuts, wine grapes and dairy foods are driven more by market demand than by the drought.

California produces about half of US-grown fruits, nuts and vegetables and nearly a quarter of the nation’s milk and cream. Across the nation, consumers regularly buy several crops grown almost entirely in California, including tomatoes, carrots, broccoli, almonds, walnuts, grapes, olives and figs.

The study highlight California agriculture’s economic resilience and vulnerabilities to drought and underscore the state’s reliance on groundwater to cope with droughts, researchers say.

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