California Drought 2014: Farms
On January 17, 2014, the Governor of California declared a drought emergency and, as of March 4, over 94 percent of California’s $45 billion agricultural sector was experiencing severe, extreme, or exceptional drought, with the livestock sector more directly exposed to exceptional drought than the crop sector (table 1). This measure of exposure to drought is based on local weather conditions, as reflected in the Drought Monitor.¹ However, given the prevalence of irrigation in California, supplied by large-scale State and Federal water projects, the degree of exposure to drought based on local weather does not fully capture the potential impacts on farmers and irrigated farm production.
Table 1: Exposure to drought in California
| ||Market value (2012)||Drought exposure (Drought Monitor category) as percent of market value|
| ||($ Billion)||Exceptional (D4)||Extreme (D3)||Severe (D2)|
|All farms in California
|Livestock and products
|Source: ERS calculations of exposure are made using county-level value of production data from the 2007 Census of Agriculture and county-level Drought Monitor data. Market value numbers are from the USDA NASS 2012 State report for California.
The 2007 Census of Agriculture reports that about 8 million acres in California were irrigated, representing a third of the total land in farms and the majority of harvested cropland. In the 2008 Farm and Ranch Irrigation Survey, over 4 million acres in California were irrigated with groundwater, and about 1.4 million acres were irrigated with on-farm surface water supplies. About 3.2 million acres in California were irrigated with off-farm surface water supplies. While some of the total irrigated acreage draws from multiple sources, in 2008 there were about 1 million acres irrigated solely with off-farm surface water (fig. 1). This last category of farmland is particularly vulnerable to drought conditions in the watersheds where its source water supplies are located.
Errata: On April 30, 2014, this chart and the paragraph above it replaced the previous text and chart, to correct a double-counting problem with the previous chart.
Much of California farmland receives source water from snowfall in the Sierra Nevada mountains. As of February 2014, according to the California Department of Water Resources, snowpack was at approximately 24 percent of normal levels, averaged across the State. On January 31, the State Water Project, which provides surface water to about 750,000 acres of agricultural land, announced that it would not be able to deliver any water to these users, the first so-called “zero allocation” in the project’s history. The Federal Central Valley Project, which supplies about 3 million acres, delivered only 20 percent of contracted water in 2013 and is likely to be even more constrained in 2014.
A major uncertainty about the impacts of the 2014 drought in California is the extent to which farmers will be able to offset shortfalls in surface water deliveries through increases in groundwater withdrawals. Historically, groundwater extraction is much higher in drought years, and given low recharge rates in most areas, the aquifers are very slow to recover the depleted water resources. Even if groundwater extraction can be used by some farmers, it may lower water-table depths and reduce well yields, leading to increased groundwater extraction costs in future years. In some areas, past groundwater extraction has contributed to land subsidence (i.e., sinking) or saline intrusion, which limits current groundwater extraction. Further, as producers in the Great Plains learned in 2012, groundwater irrigation systems are not always able to provide enough water to meet crop demands during extreme and exceptional droughts.
Two factors expected to have a large influence on eventual drought impacts on different types of California farms are irrigation application rates and crop insurance participation. As examples of how these factors can vary, we look at selected commodity categories or commodities – orchards, forage, vegetables, rice, corn, and cotton. Together, these six categories used about 21 million acre-feet of irrigation water in 2008, or 92 percent of total irrigation water in California that year. For all these commodities, land irrigation is the dominant form of production in the State, ranging from 90 percent of forage production to essentially 100 percent of vegetable, rice, corn, and cotton production. Crop insurance participation varies across commodities. While insurance participation rates for the 2014 crop year are not yet available, we can estimate the rates and liability using the 2012 summary of business data from USDA’s Risk Management Agency (RMA) and the most recent acreage data from USDA’s National Agricultural Statistical Service. Based on these numbers, insurance participation ranges from about 8 percent for forage to 55 percent for almonds to 86 percent for rice. How these participation rates vary in 2014, and whether coverage is based on revenue protection or planting decisions, will determine the extent to which crop insurance is able to mitigate some of the revenue impacts of the drought for California farms.
Table 2: Factors influencing drought vulnerability for selected crops
| ||2008 |
Total acreage (1,000's)
Insured acreage (1,000's)
|2012 Liability |
|Land in orchards
|Land in vegetables
|Grapes include table grapes for insurance calculations.
Forage includes all hay, haylage, and chop silage hay for acreage and irrigation calculations.
Corn includes grain and silage for acreage and irrigation calculations.
Source: Water use totals are ERS calculations based on 2007 acreage (from USDA Census of Agriculture) and 2008 water application rates (from the Farm and Ranch Irrigation Survey). Acreage totals are from the 2012 USDA NASS survey-reported acreage, except for total acreage in orchards, which is from the 2007 USDA Census of Agriculture. The insured acreage and liability numbers are from the RMA Summary of Business data.
¹The Drought Monitor is a compilation of several different drought indices and additional information, combined on a weekly basis by a rotating group of experts from the USDA, NOAA (National Oceanic and Atmospheric Administration, and the National Drought Mitigation Center. The monitor divides drought conditions into five categories of drought, in order of ascending intensity: abnormally dry (D0), moderate drought (D1), severe drought (D2), extreme drought (D3), and exceptional drought (D4).