California: Farmers face $3 billion loss due to historic drought

California’s worst drought has left growers in the top US agricultural state facing losses of $3 billion. Even then, producers are bracing for more widespread cuts to water supplies. The state’s driest three-year period on record resulted in crop revenue losses after growers left a total of 1.3 million acres unplanted over 2021 and 2022 as compared with 2019, according to a study commissioned by the California Department of Food and Agriculture. That’s the most idled acreage in recent memory.

The Central Valley, where approximately a quarter of all US food is grown, including 40% of fruits and nuts, is bearing the brunt of the losses so far. Things could still get worse, with the state’s southern farming areas reliant on water from a shrinking Colorado River likely to see more fallowing in 2023.

The estimated 752,000 acres of fallowed fields in 2022 alone represent nearly 10% of California’s irrigated land examined by researchers. Growers also faced extra energy costs due to the need to pump water.

However, not all outlooks are negative. Statewide economic impacts on farm income were softened considerably by measures such as increased groundwater pumping, switching crops, water trading and insurance payments.


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