Sunday, August 17, 2014

California Drought Transforms Global Food Market

California farmer Will Terry grows peppers and strawberries in Ventura County, a region 60 miles west of Los Angeles that produces about $700 million of the fruit annually. (Source: David Paul Morris/Bloomberg) Click to enlarge.
Crop switching is one sign of a sweeping transformation going on in California -- the nation’s biggest agricultural state by value -- driven by a three-year drought that climate scientists say is a glimpse of a drier future.  The result will affect everything from the price of milk in China to the source of cherries eaten by Americans.  It has already inflamed competition for water between farmers and homeowners.

Growers have adapted to the record-low rainfall by installing high-technology irrigation systems, watering with treated municipal wastewater, and even recycling waste from the processing of pomegranates to feed dairy cows.  Some are taking land out of production altogether, bulldozing withered orange trees and leaving hundreds of thousands of acres unplanted.

An estimated 82 percent of California is experiencing extreme drought, according to the U.S. Drought Monitor.  Agriculture has been hard hit as it consumes about four-fifths of the water that isn’t set aside for environmental preservation.  Some farmers are paying as much as 10 times more for water than what it cost before the drought.

“There will be some definite changes, probably structural changes, to the entire industry” as drought persists, said American Farm Bureau Federation President Bob Stallman. “Farmers have made changes.  They’ve shifted.  This is what farmers do.”

In the long term, California will probably move away from commodity crops produced in bulk elsewhere to high-value products that make more money for the water used, said Richard Howitt, a farm economist at the University of California at Davis.  The state still has advantages in almonds, pistachios and wine grapes, and its location means it will always be well-situated to export what can be profitably grown.

That may mean less farmland in production as growers abandon corn and cotton because of the high cost of water.  Corn acreage in California has dropped 34 percent from last year, and wheat is down 53 percent, according to the USDA.

Cotton planting has fallen 60 percent over the decade, while almonds are up by more than half.

On its own, California would be the world’s ninth-largest agricultural economy, according to a University of California at Davis study.  Shifts in its production reverberate globally, said Dan Sumner, another agricultural economist at the school.

California Drought Transforms Global Food Market

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