Pray for Rain

Here in the Golden State everything’s brown.  The hillsides are dry and the scrubland vegetation’s a giant tinderbox.  Sierra snowpack is only 12 percent of normal…the lowest it’s ever been since California began keeping records in 1960.

The wildfires don’t ordinarily arrive until fall.  Not until summer and the dry Santa Ana winds have blown through.  Yet this year’s far from ordinary.  The fires came in January.

The San Gabriel Mountains went up in a blaze several weeks ago.  We marveled from the 21st floor of a Figueroa Street skyscraper as a thick layer of black smoke drifted across the Los Angeles basin and down to the Long Beach harbor.  An incandescent sunset over San Pedro Bay guided us as we traversed our way home in the evening.

“This could potentially be the driest water year in 500 years,” said University of California Paleoclimatologist B. Lynn Ingram.  Obviously, we weren’t around when Columbus discovered the new world.  But we can tell you, in strictly scientific terms, it’s drier than a baked prune.

Just ask retread Governor Jerry Brown.  On Thursday he told the state’s residents “don’t flush more than you have to.”  Brown also advised everyone to take shorter showers and turn off the water while brushing teeth.

An Unstable Foundation of Cheap Abundant Water

On Friday it was announced that the State Water Project would not provide water to urban residents or farmers because of the severe drought.  This has never before happened in the massive statewide water delivery system’s 54-year history.  But, then again, this year is far from ordinary.

In short, this means municipal water and irrigation districts are on their own.  They’ll be entirely dependent on their local water resources and available water storage systems.  Regrettably, some communities almost entirely rely on State Water Project water for their water supply…and they’re in big trouble.

“The 20th century was unusually mild here [in California],” noted Ingram, “in the sense that the droughts weren’t as severe as in the past.  It was a wetter century, and a lot of our development has been based on that.”

That development, along with a century of cheap credit, ballooned California’s population from less than 1.5 million in 1900 to nearly 40 million today.  It also transformed tens of millions of acres of desert wasteland into an agricultural oasis.  What would happen to California if the drought – currently in its third year – was to last an entire century?

Growth of urban areas, which are already some of the most water efficient in the world, would certainly be limited.  But we believe the rural, agricultural areas would be hit the hardest.  For California agriculture’s entire existence and economy has been built on an unstable foundation of cheap abundant water.

Pray for Rain

Most people point to the cities as the water culprit, but California agriculture uses about 80 percent of the state’s developed water supply.  To survive a sustained drought, farmers would have to replumb and retool their croplands from flood and sprinkler irrigation to drip irrigation.  Many growers may not be able to afford the upfront capital costs to do so.

No doubt, California’s in a rainfall bear market.  The impacts, however, will affect more than just Californians.  The drought in California means there won’t be as many fresh fruits and vegetables this year.  Likewise, those that do come to market will be extremely costly.

Remember, California produces nearly half of the nation’s grown fruits, nuts, and vegetables.  In 2012 this output generated a sales value of $44.7 billion.  With the water supply shortage thousands of acres will lie fallow.  The Central Valley’s economy will be devastated.

Finally, on Sunday, something utterly remarkable happened – it rained.  But it wasn’t nearly enough.  San Francisco Bay Area cities received a quarter to a half inch of rain.  Here in the Southland, there was hardly enough rain to smear the street grease around.

Unfortunately, the rainfall was far too little to improve the drought.  If a sustained rain doesn’t come soon, we’ll enter the dry season without having a wet season.  Certainly, we’ll monitor the situation for you and keep you appraised over the coming weeks.  In the meantime, we recommend planting a couple additional tomato plants in your garden this spring to offset the coming price surge of fresh produce.  After that…pray for rain.

Sincerely,

MN Gordon
for Economic Prism

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