U.S. consumers may soon whine over a dry California

March 06, 2014

The drought left much of the top agricultural state unplanted – and set roots for food price hikes ahead.

California is parched – and the entire United States should brace for higher food costs as a result.

It’s a safe bet we can toss out earlier USDA projections for moderate 2.5% to 3.5% food inflation in 2014.  The agency’s Economic Research Services unit didn’t figure the extreme drought – likely the worst ever in this key agricultural state – into this estimate.

The impact could be significant because California yields the vast majority of so many crops that help to fill and flavor lunchboxes, snack bags and dinner plates across the U.S.  According to the California Department of Food and Agricultural Resources (CDFA), as charted by University of California-Davis, the state has a 99% share of shelled almonds, walnuts and artichokes, as well as: pistachios (98%); kiwifruit and garlic (97%); nectarines, olives, broccoli and processed tomatoes (96%); celery (95%); apricots (94%); strawberries and cauliflower (90%); lemons (89%); avocados (87%); carrots (86%); peaches and honeydew melons (72%); and cantaloupe melon (59%).  

The state has majority shares in dozens of other crops as well – all of which helped it post a nation-leading $44.7 billion in market value of agricultural products sold in 2012, the latest year for which full figures are available.  In all, California yields nearly half of U.S.-grown fruits, nuts and vegetables, says CDFA, noting that dollar leaders include grapes ($4.4 billion), almonds ($4.3 billion), strawberries ($1.9 billion), lettuce ($1.4 billion), walnuts ($1.3 billion) and tomatoes ($1.2 billion).

But with parched fields and farmers, and an estimated half-million acres of key crops unplanted due to lack of water, many food prices in supermarkets could soon rise – not only fruits and vegetables, but wine and dairy products too.

While California legislators and members of Congress aim to enact effective water management strategies and relief programs, the future may hold a diminishing role for agriculture in the state “as the business of growing food moves to the South and the Midwest, where water is less expensive,” Jay Lund, a water expert at UC-Davis, told Mother Jones recently.