The drought in California – the third most severe on record – is responsible for the greatest water loss ever seen for the state's agriculture, and river water for Central Valley farms has been reduced by roughly one-third, according to a study out Tuesday from the University of California-Davis.However, "California's agricultural economy overall is doing remarkably well, thanks mostly to groundwater reserves," said Jay Lund, a co-author of the study and director of the university's Center for Watershed Sciences, which released the study.
The entire state is in a drought. More than 36% is in "exceptional" drought, the worst level, according to the most recent U.S. Drought Monitor, a federal website that's updated weekly.
The UC-Davis report found that direct costs to agriculture total about $1.5 billion (which include revenue losses of $1 billion and $0.5 billion in additional pumping costs). This net revenue loss is about 3% of the state's total agricultural value.
Farmers in pockets of California hardest hit by the drought could begin to see wells run dry next year.
"We expect substantial local and regional economic and employment impacts," Lund added. "We need to treat that groundwater well so it will be there for future droughts."
Other findings from the report:
• The loss of 17,100 seasonal and part-time jobs related to agriculture due to the drought represents 3.8% of farm unemployment.
• The drought is likely to continue through 2015, regardless of whether the climate pattern El Niño develops, which could provide needed rain and snow next winter.
• Consumer food prices will be largely unaffected. Higher prices at the grocery store of high-value California crops such as nuts, wine, grapes and dairy foods are driven more by market demand than by the drought.