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Drought in ’21 cost California ag $1.1 billion

Overall economy lost $1.7 billion and nearly 15,000 jobs as water cutbacks devastated farm sector.

Tim Hearden, Western Farm Press

March 2, 2022

3 Min Read
Plane seeding rice field
California’s rice industry was among those that were hardest hit by drought in 2021, according to a University of California study.Todd Fitchette

Drought-related water cutbacks in 2021 idled 395,000 acres of California farmland and directly cost agriculture about $1.1 billion and 8,750 jobs as lost production was reported up and down the Central Valley, according to a university study.

The overall economy lost an estimated $1.7 billion and 14,634 full- and part-time jobs serving the ag sector in the valley, the Russian River Basin and northern intermountain valley areas, a preliminary report from the University of California found.

Areas hardest hit included parts of the Sacramento Valley, the west side of the San Joaquin Valley, and Tulare and Kern counties, according to the study, whose results were reported March 1 to the California Board of Food and Agriculture. Fallowing was most prevalent in Sacramento Valley rice, San Joaquin Valley cotton and grain and field crops statewide, the UC scientists said.

“These are very comparable to 2014 numbers,” state Department of Food and Agriculture Secretary Karen Ross told the board. “Now that it appears we’re heading into a severe summer, we’ll clearly match that and we may be heading into 2015 numbers, unfortunately.”

Related: 'Weather whiplash' prompts zero allocation from CVP

In 2015, drought-related fallowing and production losses cost ag $1.8 billion directly and sapped the overall economy of $2.7 billion, according to UC economists. Josue Medellin-Azuara, the most recent report’s lead author, asserts drought conditions in some areas are more severe this time.

“In comparison with the 2012-2016 drought, conditions were much worse (in 2021) for the Sacramento Valley and the Russian River Basin, yet the statewide impacts have not been as severe as in 2015 – the deepest point in the last drought,” said Medellin-Azuara, an engineering professor at UC Merced.

“Should dry conditions persist throughout 2022, a higher tier of adaptation measures may come into play to reduce economic impacts on agriculture and communities that host thousands of households relying on agriculture for a living,” he said.

Drought took hold

Joining Medellin-Azuara as authors were fellow UC Merced professors John Abatzoglou and Joshua Viers; UC Merced graduate students Spencer Cole and Jose M. Rodriguez-Flores; economist Dan Sumner of the UC’s Agricultural Issues Center in Davis; and Alvar Escriva-Bou of the Public Policy Institute of California. The research was funded by a $1.5 million grant from CDFA.

Drought took hold throughout the western U.S. in 2021 after developing in 2020, as warm temperatures last spring depleted mountain runoff while increasing growers’ need for irrigation. In California, state and federal water deliveries were slashed to 5% of normal supplies for most contractors.

Economic losses last year would have been worse if not for strong commodity prices, including for milk, whose prices rose because of global demand, according to the UC-Merced study released Feb. 24. To offset higher production costs, the dairy sector also explored alternatives to hay and winter grains that, in some cases, increased cow milk productivity, according to the university.

The state’s beef cow herd increased as ranchers adapted to scarce winter pastures and higher forage prices, the researchers observed.

The scientists developed their estimates using surveys, reviews of hydrological information and remote-sensing data and comparing them to average conditions as well as to the 2012-2016 drought. They say their estimates will be updated as 2022 proceeds.

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