By Richard Howitt, Duncan MacEwan, Josué Medellín-Azuara, Jay Lund and Daniel A. Sumner
The drought is expected to be worse for California’s agricultural economy this year because of reduced water availability, according to our preliminary estimates released today.
The study, summarized below, estimates farmers will have 2.7 million acre-feet less surface water than they would in a normal water year — about a 33 percent loss of water supply, on average. The impacts are concentrated mostly in the San Joaquin Valley and are not evenly distributed; individual farmers will face losses of zero to 100 percent.
Expanded groundwater pumping will offset more than 70 percent of this surface water deficit, according to our modeling of how farmers are likely to respond. This leaves a shortage of 2.5 million acre-feet — 9 to 10 percent of the amount normally applied to crops — compared with a net water shortage of 1.5 million acre-feet in 2014.
The estimates, prepared for the California Department of Food and Agriculture, also show that farmers will fallow roughly 560,000 acres or 6 to 7 percent of California’s average annual irrigated cropland.
Estimated Drought Impacts to California Agriculture, 2015
Economically, the drought seems on track to reduce crop, dairy and livestock revenues by $1.2 billion this year. Pumping costs are expected to reach nearly $600 million. Overall, the drought is estimated to cause direct costs of $1.8 billion — about 4 percent of California’s $45 billion agricultural economy. When we account for the spillover effect of agriculture on the state’s other economic sectors, the total cost of this year’s drought on California’s economy is $2.7 billion and the loss of about 18,600 full- and part-time jobs.
California Agricultural Jobs and the Drought, 2013 -2014
Agricultural employment increased from 2013 to 2014, but substantial losses of irrigation-season jobs occurred in areas particularly hard-hit by the drought.
The drought induced job losses even while total agricultural employment continued to grow. We estimate further job losses will occur in 2015.
As with last year, groundwater, global markets and water markets are greatly reducing the economic impacts of the drought on California’s agriculture and consumers worldwide. Still, considerable local suffering will remain in harder-hit areas.
We will update our estimates in the coming months as additional data become available.
Richard Howitt, Josué Medellín-Azuara and Jay Lund are with the UC Davis Center for Watershed Sciences; Duncan MacEwan is with ERA Economics in Davis, Calif.; and Daniel Sumner is director of the University of California Agricultural Issues Center.
Further reading
Howitt RE, Medellín-Azuara J, MacEwan D, Lund JR and Sumner DA. 2015. “Preliminary Analysis: 2015 Drought Economic Impact Study,” UC Davis Center for Watershed Sciences. 9p
Howitt RE, Medellín-Azuara J, MacEwan D, Lund JR and Sumner DA. 2014. “Economic Analysis of the 2014 Drought for California Agriculture.” UC Davis Center for Watershed Sciences. 20p
Lund, JR, Medellín-Azuara J, Harter T. “Why California’s agriculture needs groundwater groundwater management.” California WaterBlog.May26,2014
Lund, JR et al. “Taking agricultural conservation seriously.” California WaterBlog. March 15, 2011
Medellín-Azuara J and Lund JR. “Dollars and drops per California crop.” California WaterBlog. April 14, 2015
Sumner DA. “Food prices and the California drought.” California WaterBlog. April 22, 2015
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