Expect higher food prices as Californian farmers cope with drought

Patterson Irrigator reports that California farmers' lifeblood continues to dry up.

(emphasis mine) [my comment]

Farmers' lifeblood continues to dry up
Written by James Leonard / Patterson Irrigator
Wednesday, 04 February 2009

“I would say that, based on our current situation, we will not be receiving a 2009 water supply.”
— Bill Harrison, General manager, Del Puerto Water District

Rainfall totals are low, the Sierra snowpack is light and 2009 is already looking to be an especially lean year for farmers.

The California Department of Water Resources released results last week from the second snow survey of the winter season, which showed the snowpack that helps provide the entire state with water at just 61 percent of normal. That' s a decrease from the prior survey, which in late December showed the snowpack at 76 percent of normal.

“We may be at the start of the worst California drought in modern history,” said Lester Snow, the DWR' s director. “It' s imperative for Californians to conserve water immediately at home and in their businesses.”

The numbers are even worse for local farmers. The snowpack in the Northern Sierra, which trickles down to the West Side by way of the San Joaquin Delta, was at just 49 percent of normal.

Farmers who rely on surface water from the Delta — which also faces environmental restrictions on pumping because of an endangered fish — are preparing for the worst.

The Del Puerto Water District, which serves about 45,000 acres of farmland between Vernalis and Santa Nella and gets all its water from the Delta, received about 40 percent of its contracted water supply last year.

This year, it will get less — much, much less.

“I would say that, based on our current situation, we will not be receiving a 2009 water supply,” [not what a farmer wants to hear, I think] said Bill Harrison, the district' s general manager.

Harrison said with no available surface water, many farmers will have to abandon row crops in lieu of preserving permanent tree orchards. And they' ll have to get the water for that on their own.

“Anybody with groundwater will be utilizing that to protect permanent crops,” Harrison said. “For the most part, that will be the supply of water available to my users.”

Dave Santos, a local farmer of apricots, cherries and other fruits, gets water from the Delta but also from the West Stanislaus Irrigation District — which takes some of its water from the San Joaquin River — and his own wells.

Santos knows he probably won' t get anything from the Delta this year. And the West Stanislaus district might get shorted on its allocation from the river, according to a letter to customers from Kenneth Bays, president of its board of directors.

That will likely leave Santos to rely on groundwater this year, which could pose problems of its own.

“I think we' ll probably have a pretty fair backup water supply,” Santos said. “I just don' t know what' s going to happen when everybody' s pumping. I just don' t know how that' s going to take its toll.”

Grounded fears

There might be enough groundwater to go around this year, but
for those without reliable groundwater, the situation is even more dire.

“Most of them are in survival mode,” Harrison said, “meaning they' re trying to keep their permanent crops alive as long as they can and maybe make some hard decisions on which to keep alive and which to abandon.”

“That' s a very sad proposition to have to face.”

Local farmer Ed Maring has crops in various locations and draws water from a number of sources, none of which appear to be particularly reliable this year. He said he' ll likely have to leave some ground fallow, and he' s in the process of fixing up some old wells he hasn' t used for years.

Maring said this drought could be the worst he' s seen, largely because it' s being exacerbated by the environmental restrictions on the Delta.

The population of the Delta smelt is dwindling, and environmentalists believe it' s because the fish are being caught in massive pumps that send water south along the California Aqueduct and Delta-Mendota Canal. The courts have thus far agreed, and increasingly stringent orders have been sent down to limit how much water can be pumped out of the Delta.

“We' ve never had the political issues that we have now,” Maring said.
“Years ago, whatever water they had was pretty available to agriculture. Now, environmental issues seem to have taken precedence over growing our food.”

The shortage of water could have a significant effect on an already struggling economy, Harrison said.
In addition to higher prices on produce for consumers, there could be major job losses for agricultural workers.

“Ag dollars tend to flow through the economy,” Harrison said. “They' re the basis of a vibrant economy when there' s water around.

“When there' s no water around, the dollars stop flowing.”

MSNBC reports that California drought may raise vegetable prices.

California drought may raise vegetable prices
Lack of rain compounded by changes in routing water to farmers
updated 4:04 p.m. ET, Sun., Jan. 25, 2009

MENDOTA, Calif. - Consumers may pay more for spring lettuce and summer melons in grocery stores across the country now that California farmers have started abandoning their fields in response to a crippling drought.

California's sweeping Central Valley grows most of the country's fruits and vegetables in normal years, but this winter thousands of acres are turning to dust as the state hurtles into the worst drought in nearly two decades.

Federal officials' recent announcement that the water supply they pump through the nation's largest farm state would drop further was enough to move John Giacone to forego growing vegetables so he can save his share to drip-irrigate 1,000 acres of almond trees.

"Taking water from a farmer is like taking a pipe from a plumber," said Giacone, a fourth-generation farmer in the tiny community of Mendota. "How do you conduct business?"

The giants of California agribusiness are the biggest economic engine in the valley, which produces every cantaloupe on store shelves in summer months, and the bulk of the nation's lettuce crop each spring and fall.

This year, officials in Fresno County predict farmers will only grow about 6,000 acres of lettuce, roughly half the acreage devoted to greens in 2005.

That alone could cause a slight bump in consumer prices, unless lettuce companies can make up for the shortage by growing in areas with an abundant water supply, or the cost of cooling, packaging and shipping the crop suddenly goes down, experts say.

"Lettuce comes off the field and goes straight into the market, and if there's nothing coming off the field then the marketing chain goes dry, and prices go up," said Gary Lucier, an agricultural economist with the U.S. Department of Agriculture's Economic Research Service.

While the dry weather has exacerbated the problem, farmers' water woes are not all drought-related.

Supplies for crops and cities also have been restricted by several court decisions cutting back allocations that flow through a freshwater estuary called the Sacramento-San Joaquin Delta, the main conduit that sends water to nearly two-thirds of Californians.
Environmental groups and federal scientists say the delta's massive pumps are one of the factors pushing a native fish to the brink of extinction.

Last year, federal water deliveries were just 40 percent of the normal allocations, fallowing hundreds of thousands of acres and causing nearly $309 million in crop losses statewide. That prompted Gov. Arnold Schwarzenegger to issue a disaster declaration, ordering state water managers to expedite any requests to move water around the state, in part so high-value crops like wine grapes, almonds and pistachio trees would stand a chance of surviving.

Federal reservoirs are now at their lowest level since 1992.

With such a grim outlook, many California farmers including Giacone are investing millions to drill down hundreds of feet in search of new water sources.

Depending on how much it rains this winter, federal water supplies could be slashed down to nothing this year, forcing farmers to rely solely on brackish well water. But the U.S. Bureau of Reclamation won't make an official decision until late February, said Ron Milligan, the agency's Central Valley operations manager.

The state Department of Water Resources, which also ships farmers water, has promised to deliver 15 percent of the normal allocations in October, but conditions are so dire that that's now in doubt, too.

"The consequences are expected to be pretty horrible in terms of farmers' revenue, but what's really disconcerting are the possible job losses," said Wendy Martin, who leads the agency's drought division. "Those communities that can least weather an economic downturn are going to be some of the places that are hit the hardest."

Richard Howitt, a professor of agriculture economics at the University of California, Davis, estimates that $1.6 billion in agriculture-related wages, and as many as 60,000 jobs across the valley will be lost in the coming months due to dwindling water.

Analysts haven't yet provided any estimates of crop losses this year. But Bill Diedrich, an almond grower on the valley's parched western edge, said he's already worried he may lose some of his nut trees in the drought.

"The real story here is food security," Diedrich told Milligan and other officials speaking at a conference in Reno, Nev. "It's an absolute emergency and anything to get water flowing quickly is needed."

In the meantime, the forecast appears to be worsening: Meteorologists are predicting a dry spring, and a new state survey shows the population of threatened fish is at its lowest point in 42 years, more imperiled than previously believed.

"This has devastating effects not only for the guys out there in the fields with the weed whackers, but it affects the whole farming industry," said Thomas Nyberg, Fresno County's deputy agricultural commissioner. "I'm just praying for rain."

KCEN-TV reports about Texas farmers & ranchers coping with ongoing drought.

Texas Farmers & Ranchers Cope With Ongoing Drought
This article was posted Monday, February 9th, 2009 at 6:00 pm

This rain we are seeing won' t do much for what' s being described as one of the worst droughts in Texas history.

Farmers say it' s rare to see these extremely dry conditions this time of year.

Low or empty stock ponds are only one visible sign of just how serious the conditions are.

McLennan County Farm Bureau President Marc Scott says,
“Usually this tank would have right at ten feet of water in it. As you can see it' s got maybe a foot.”

The drought might also affect your grocery bill in a matter of months.

It' s likely beef prices would reflect the problem weather.

Since wheat hasn' t produced, bread prices may also jump.

McLennan County farmer and rancher Robert Cervenka is trying to stay positive. But he says,
“You can be the best farmer or rancher in the world. Without rain, you' re nothing.”

My reaction: US droughts will be affecting your grocery bill in a matter of months, if not weeks.

1) Many Californian farmers aren' t expecting to receive any water, and so they aren' t planting anything.

2) The prices of lettuce and summer melons in grocery stores across the country will be rise as California farmers abandon their fields.

3) California's sweeping Central Valley normally grows most of the country's fruits and vegetables, but this winter thousands of acres are turning to dust.

4) Texas drought means higher prices for beef and wheat.

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0 Responses to Expect higher food prices as Californian farmers cope with drought

  1. Anonymous says:

    Looks like a lot of people are going to be foregoing bariatric surgery in the near future.

    Eric, you seem caught up in this theory of higher staples prices based on drought and natural disasters when you should be focusing on market based supply destruction. Right now alot of farmers are having liquidity issues along with everyone else. Couple that with depressed commodities levels in such a short period of time and your drought thesis you have a pending disaster.

    But it shouldn't be understated that supply destruction has begun in earnest world wide, and nothing says increased money velocity like spending on essentials, in fact I bet Zimbabwe has a helluva money velocity rate even though their per capita GDP is 200 bucks a year.

    People won't spend on assets because credit will be tight (deflation), jobs will be scarce (deflation), government payments to prevent riots will increase (inflation), impaired production of staples due to liquidation, credit freezes, more people sitting home instead of producing the goods they need, while the government prints away will lead to the worst of all outcomes an inflationary depression, its a comming.

    Look for DECREASED PURCHASING POWER for individuals as government fails to keep up with inflation on the way up and people losing money on the way down as deflation reveals who's been swimming naked.

  2. Anonymous says:

    The mortgage problem is also raising food prices. Farmers can't pay for their coops!


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