California Drought Losses Half of Estimate on Groundwater

California’s agriculture industry will incur less than half the losses forecast in March from the worst drought on record, after groundwater supplies eased the burden on farmers, a group said.

Losses will reach $3.4 billion for farming and related economic activity, including trucking and shipping, compared with $7.48 billion forecast on March 18, Mike Wade, executive director of the California Farm Water Coalition, said today in a telephone interview from Sacramento. The reduced estimate reflects research from the University of California, Davis, that shows less land will be left fallow than expected as the state pumped more from aquifers and farmers got some unexpected deliveries from state and federal water projects.

“It’s good news, but it doesn’t mean there isn’t going to be an impact,” Wade said. “It’s a misleading improvement because we’re relying on groundwater.”

California, the largest U.S. agricultural producer with output of crops, dairy and meat valued at $44.7 billion in 2012, has been mired in drought for much of the past year. The entire state was rated in severe to exceptional drought as of May 13, according to the U.S. Drought Monitor. Little or no rain is expected for the next five months, U.S. forecasters said last week.

About 410,000 acres of land will be left fallow in the current growing season because of the dry weather, according the UC-Davis research released today. The Farm Water Coalition in March put the number at 800,000 acres.

The drought probably won’t increase consumer-food prices, and most of the tree and fruit crops will survive the dry season, said Jay Lund, director of the Center for Watershed Sciences at UC-Davis, who contributed to the research. Farmers are facing increased water costs, with some irrigation districts charging four to five times the normal amount per acre-foot, he said.

The drought “is going to be bad for some communities this year, but it could be worse if it continues for another year or two,” Lund said in an interview.

To contact the reporter on this story: Megan Durisin in Chicago at mdurisin1@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net Steve Stroth, Patrick McKiernan

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