California Drought Saps Food Production - Rabin Worldwide


California Drought Saps Food Production

California drought


Following the lowest snowpack in California’s recorded history, on April 1st, 2014, California Governor Jerry Brown signed an executive order that requires cities, towns, and homeowners to reduce their water consumption by 25%, with fines as high as $500 a day for people who fail to comply with the new cutbacks.

However, when it comes to the different industries in California and how they’ll be affected by the drought, not all are created equal. The one thing that is certain is that both money and jobs will be lost, with the agriculture sector losses measuring over $2 billion and 17,000 jobs solely due to the drought in the last year alone.

Brown’s executive order exempted farmers from the 25% cutback, but that doesn’t mean the farming industry has smooth sailing ahead of them. The State of California ranks as the largest agricultural producer of any state, bringing in $46 billion in 2013, with nuts and fruits being the favored crops and representing $20 billion in revenue. 80% of California’s water is consumed by the agricultural sector, with the most profitable and popular crops tending to be the most water-intensive. For example, 80% of the world’s almonds are grown in California, and an entire gallon of water is needed to produce a single almond. Similarly, a tomato requires over 3 gallons of water to be produced, with a head of lettuce requiring 3.5 gallons, and a single walnut 5 gallons.
With the agricultural sector traumatized by the drought, increased prices will undoubtedly affect the food processing sector as well. Approximately 11% of the USA’s food processing jobs are located in California. Be on the lookout for facility closings in the food sector- from the production, processing to packaging.