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Monday, April 21, 2014

US Produce Prices to Rise on Extreme CA Drought

from MNI, April 21, 2014 

--Updating With Comments From Penn State Climate Researcher Michael Mann--12% of Central Valley to Lie Fallow as Water Supply Dwindles--USDA Warns of 'Major Impact' to California's Farm Output This Year
PHILADELPHIA (MNI) - Joe Del Bosque has farmed tomatoes, melons, asparagus, almonds, and cherries in California's Central Valley since 1985 but this year he is cutting back because he does not have enough water.
Del Bosque has fallowed about 550 of the 2,000 acres he farms some 60 miles west of Fresno, and that's going to mean no tomato crop this year, and a 50% cut in the number of cantaloupes he grows.
Like many other farmers in the region that supplies a large proportion of America's fruit and vegetables, Del Bosque has been hit hard by a three-year Western drought that is depleting aquifers and surface water sources, and which in January caused California Governor Jerry Brown to declare a state of emergency.
For irrigation, farmers like Del Bosque depend on water from the Bureau of Reclamation, a federal agency that supplies water to 140,000 Western farmers who together produce some 60% of the national vegetable supply, according to government data.
But this year, for the first time in almost 30 years, Del Bosque is getting no water from the bureau.
"We didn't know we would be at zero," he told MNI. "That's never happened before."
This season, his remaining crops will be grown with water he saved from last year's federal allocation, for which he paid three times the normal cost. He won't be getting much help from local rivers that are fed by the Sierra Nevada mountains, where the snow pack this winter was only 24% of normal, according to the U.S. Department of Agriculture.
Del Bosque, 65, predicted the surviving crops will allow him to stay in business but said he will lose a great deal of money - more than $100,000 in revenue from tomatoes alone.
"It's a big hit," he said. "Twenty-five percent of my business has just vanished."
Across the Central Valley, some 800,000 acres, or 12% of the total 6 million acres of arable land, has been or is being taken out of production in response to the drought, said Wendy Fink-Weber, a spokeswoman for the Western Growers Association whose members - in California and Arizona - provide half the national fruit and vegetable supply.
Statewide, 94% of California's agricultural sector was experiencing "severe, extreme or exceptional" drought by early March, according to the USDA.
Whether farmers like Del Bosque will continue to face crippling droughts in coming decades may depend on whether the current parched conditions result from climate change or are, as some scientists argue, simply the latest example of a historical pattern of reduced rainfall - such that which hit California in the mid-1970s - rather than the result of rising temperatures that come with climate change.
President Obama's science advisor, John Holdren, argued in a February paper that drought was linked to climate change in ways that suggests droughts will be more frequent in future.
After being accused by Republican Senator Jeff Sessions of misleading the public on a link between climate change and drought, Holdren said climate change is expected to reduce the amount of rain that is absorbed in soil; to reduce the amount of winter snow so that streams run lower in spring and summer; to melt any snowfall earlier in the year, further reducing the feed to waterways, and to increase evaporation from reservoirs and soil.
Michael Mann, a climate researcher at Pennsylvania State University, said there's growing evidence that climate change has exacerbated the California drought.
"The question isn't so much whether the California drought is a result of climate change as whether it was made worse by climate change," Mann told MNI. "And the answer to that latter question appears to be yes."
Mann also rejected an argument by Roger Pielke, a University of Colorado political scientist, who said at a Congressional hearing on the Obama administration's climate action plan that there is no evidence of a link between climate change and drought.
"Roger Pielke is simply wrong," Mann told MNI, arguing that Pielke lacks expertise in climate science. Among scientists who have linked the drought to climate change, Mann said, is Peter Gleick, a member of the National Academy of Science, who cites climate-related factors such as greater soil evaporation and decreased snowpack among causes likely to worsen drought in coming decades.
Meanwhile, the USDA warned the drought is likely to have a "major impact" on this year's farm production in California, the primary national source of many fruits such as strawberries, grapes and lemons, and vegetables such as carrots, broccoli and lettuce.
"Because California is a major producer in the fruit, vegetable, tree nut and dairy sectors, the drought has potential implications for U.S. supplies and prices of affected products in 2014 and beyond," the USDA's Economic Research Service said on a new website on the effects of the drought, launched on April 16.
That followed two recent reports from the UN's International Panel on Climate Change, warning of an accelerating increase in global greenhouse gas emissions and a worsening threat from climatic effects such as heat waves, storms and rising seas.
Although the USDA's official forecast is for food-price inflation to rise at a "normal" rate of 2.5%-3.5%, the drought, combined with high meat prices resulting from an unusually cold winter, may boost the predicted rate, it said.
"Major impacts from the drought in California have the potential to result in food-price inflation above the historical average," the agency said.
The ERS also warned that the drought may drive up milk prices because of the decreased availability and increased price of alfalfa, the primary food for dairy cows. And it warned that California's livestock farms, though with a market value of less than half the crop sector, are more severely exposed to drought conditions than crops.
In the Consumer Price Index for March, meats, poultry, fish and eggs together posted the biggest rise, 1.2%, in the food index, while the fruits and vegetables index slowed to 0.9% from 1.1% in February.
Timothy Richards, a professor of agribusiness at Arizona State University, estimated that 10%-20% of the supply of some California crops could be lost, and that prices will rise by double digits for certain fruits and vegetables, especially those which are the least price-sensitive.
In a study published on April 17, Richards predicted the biggest increases will be seen for avocados and lettuces, 28% and 34%, respectively, because many shoppers are prepared to pay whatever is necessary to get them.
He predicted broccoli will rise by 10-20%; grapes by around 10%, and tomatoes by more than 10%.
"Shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores, and to pay higher prices for those items," Richards said in a statement.
Still, shortages of some crops will be offset by supplies from other regions of the U.S. or from overseas, said Kathy Means, Vice President of Industry Relations for the Produce Marketing Association, a trade group for growers, distributors and retailers of fruits, vegetables and flowers.
Means argued that growers outside the Western U.S. are likely to offset shortages of berries and broccoli, while avocados and other tree crops will be harder to substitute because they take longer to grow.
"There are going to be shortages from California that may or may not be supplemented from other areas," she said, adding that retailers are "eagerly looking everywhere" to ensure steady supplies of produce for their customers.
But the industry's traditional pattern of drawing supplies from different areas in response to local disruptions such as weather or disease is likely to be tested this time because of the magnitude of the California drought and the state's dominance in the national supply of so many crops, Means said.
"What's happening now isn't the same as just a single freeze," she said. "This drought has been going on for some time, farmers are fallowing their land, and some may sell. Once they sell that land for something else, we're not going to get it back."
Because the harvest season for many California crops hasn't yet arrived, the drought's impact on farm output is only just beginning, Means said. "It's going to ramp up from now going forward."
Even though retailers and consumers will for now be able to find different sources for the vegetables they normally buy from California, state and federal authorities need to find a long-term solution, Means argued.
"I don't want to minimize it," she said. "It is a serious issue, it's one that is going to have to be addressed politically and scientifically, figuring out how do we cope with this?"
Editors' note: Climate Check is an occasional series examining the effect of the changing climate on specific sectors of the U.S. economy.

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