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California Drought Cost Nears $2 Billion

Lauren Zanolli
| Monday May 26th, 2014 | 1 Comment

drought uvas reservoir, californiaResearchers at the University of California, Davis Center for Watershed Sciences  have attached a dollar estimate to the economic impact of this year’s ongoing drought in California’s Central Valley, the state’s agricultural heartland. Their preliminary report, released earlier this week, estimates a total economic loss of $1.7 billion, along with “substantial long-term costs” of groundwater overdraft that will go unaccounted for.

Last year marked the driest year in California since records began in 1895, and in January Gov. Jerry Brown declared a drought state of emergency. Seven of the state’s 12 main reservoirs are at or below 60 percent of the historical average, and a dry winter has left snowpack levels–an important source for replenishing water supplies–at just a fifth of historical levels, as of late April.

Several dry seasons in a row have pushed greater reliance on the state’s grounwater reserves. Overall water delivery to the agriculture sector will drop by 33 percent this year, according to the UC Davis report. But, with increased groundwater pumping making up for the bulk of that loss, the overall water losses will be about 7.5 percent of the industry’s average use. Still, researchers estimate this will result in the loss of 410,000 acres in fallowed land, or an estimated $740 million in crop revenue loss. Feed crops will take the biggest loss–close to 150,000 planted acres–contributing, in part, to expected rises in meat prices this year.

Increased groundwater pumping also means greater costs for farmers. Including those costs, estimated at $450 million the economic toll on Central Valley farmers rises to $1.2 billion, or about 5 percent of the sector’s $25BN annual value. Full-time and seasonal job losses and knock-on economic effects drive the total economic impact of the drought on Central Valley agriculture to $1.7 billion. Researchers estimate a loss of 14,500 jobs as a result of dry conditions.

All considered, the effects of the drought may not as dramatic as earlier thought. However, report authors caution that increased reliance on groundwater today could have much greater effects down the road, including dry wells, decreased water quality and stream depletion.

In the wake of January’s drought state of emergency announcement, the DWR has begun work to track gaps in groundwater monitoring. California law does not require local agencies to implement a groundwater management plan, but there are incentives, including eligibility for state funding in drought periods, to drive participation in water management planning.

According to an April report by the DWR ordered by the governor, only 169 of 515–or one-third–of alluvial groundwater basins are monitored under the statewide monitoring program. Some areas of the state either lack any groundwater management plan or have one that has not been updated to respond to the 2012 changes to California’s water code.

Image credit: Flickr, Don DeBold


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  • Nancy Groutsis

    California is situated next to the Pacific Ocean which has plenty of water for the state’s needs, but it must be desalinated. The best solution for the long-term is to build giant solar stills that use the sun’s energy to desalinate: pure water evaporates upward, hits a ceiling, and is collected by a pan of some sort and the purified water is funneled out. The salt, metals, and other impurities stay at the bottom and the salt can be sold to sea salt manufacturers for profit. The states should invest in this technology because they have the two requirements for successful large-scale solar stills: abundant ocean water and hot desert sun.