Three years into a drought, more than farmers are taking an economic hit in California. That was the summation of bad news shared at a recent agribusiness luncheon by Mike Wade, executive director of California Farm Water Coalition in Sacramento.
Businesses that depend on trade from those employed by agriculture are seeing a hit. That includes just about all businesses, especially those in areas of already high unemployment.
The drought is impacting ag operations and taking a $1.7 billion toll on the agricultural economy of the Valley counties, Wade said. He said 14,500 jobs are projected to be lost in ag in the Valley. The loss of crops and work are affecting spin-off business. Wade showed a slide of Rafael Trejo, the owner of a service station in Huron since the 1970s. Before the drought he employed eight employees. Trejo has only three employees and may close up shop.
"They don't deliver any fuel any more, he doesn't have any gasoline sales, they do some local repairs and limited towing ... but he's looking at going under," said Wade.
In Orange Grove, there are 4,000 acres of mature citrus trees bulldozed with another 50,000 acres at risk without an adequate water supply. That's shocking given that California supplies about 80 percent of the nation's fresh citrus.
A lettuce packing plant in Firebaugh, he said, won't even open with 6000 employees jobless.
Despite the bleak water outlook, Valley consumers are not likely to see a spike in produce prices in the grocery store on account of the water shortage. Wade cited a U.C. Davis study that said consumers won't see much of an impact in food prices due to a variety of production regions. The Imperial and Cochella valleys will fill in production gaps. Likewise, Salinas has an early crop.
"As a result, we've seen very little, if any, change in prices in crops like iceberg and romaine lettuce, peppers and tomatoes."
Other food imports from other nations are providing crops as well, he said.
Grocers are also taking a loss so they don't drive customers away in an effort to sell other items with a higher profit margin.
Wade shocked the Valley audience by showing two satellite photos of California, one showing a generous streak of white snow over the Sierras shot in January 2013 and one snowless shot taken January 2014.
"There's not much snow, and we're certainly suffering as you all know."
Don Pedro Reservoir is 53 percent of capacity but about 70 percent of year-to-date capacity so "it's not too bad but it's still not good."
Many Northern and Central California reservoirs are running 40 to 55 percent of capacity while Southern California has full reservoirs.
Wade engaged the audience in a brief quiz to determine their water knowledge. He asked what percentage of water is used by agriculture in the state. He said the answer is not 80 percent as reported in the media but is 41 percent according to the Department of Water Resources figures.
He followed up with the question: true or false, Southern California is stealing our water? The crowd was abuzz with the yes answer but he said "false. Southern California water users pay to move water they have a legal right to use." He added that the state water project built in the 1960s was financed by urban users down south and they constructed Oroville Dam, and the California Aqueduct, which is owned by the state.
The third question was: "True or false: Farmers waste water because it is so cheap?" That sent up groans of protest but was followed up with the explanation it was false. Since 2003, farmers have invested $2.9 billion upgrading irrigation systems on 2.4 million acres with a 14 percent reduction in applied water use in agriculture and a 25 percent increase in production volume.
"So on less water that we were using in 1967, we've almost doubled production," said Wade.
Former state Assemblyman Bill Berryhill asked Wade for his opinion on the various methods to move water out of the San Joaquin Delta to agricultural needs in the south part of the Valley. When asked about the western intake option versus the northern intake, Wade suggested that the western intake is acceptable for farmers, it doesn't provide water quality for urban supply and "is even worse for Delta Smelt and salmon."
Regarding more storage, Wade cited the three best options:
• Raising Shasta Dam 18 feet;
• Building Sites Reservoir in western Colusa County;
• Building a dam at Temperance Flats on the San Joaquin River to provide water for a million acres in the eastern part of the Valley.
"We've hopeful, if there's a water bond in November, that there will be money for ongoing funding for the public's share of some of these projects and water users know that they will be paying their share through water costs in the future to pay for those projects. But we've got to pass the water bond first."