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Drought & Farm Job Losses – Link Not Strong Yet

August 31,2014

Screen Shot 2013-06-27 at 7.15.04 PMPredictions of billions of dollars of losses in the farm economy due to the California drought have yet to show up,at least in any big way, as fewer farm jobs in the monthly EDD reports.

A look at farm unemployment in the largest farm production counties paints a mixed picture with an upward trend in farm jobs in Tulare and Fresno counties in July year-over-year numbers  but down in Kern compared to July 2013. The varied result is counter intuitive since the drought is very real and farmers are clearly stressed to keep their harvest goals.

If the drought is flashing a red light to production plans – overseas demand is flashing a bright green light. So far green is winning.

In number one ag county Tulare County – the number of farm jobs in July 2014 was 35,800, 700 more than in July 2013.  In number 2 Fresno County – farm jobs were up by 600 year over year at 59,500 – about the level the county has registered for a decade with some minor fluctuation. This is happening in a county with a huge parched westside ag industry dependent on surface water delivery that is a trickle this year.

In Kern County the number of farm jobs year-over-year is, in fact  down by 1200 to 69,100 compared to 70,300 a year earlier. But Kern’s nonfarm economy is booming with 2900 more jobs than a year ago led by 1700 more construction jobs. Workers have other,better paying options.

Likewise in Fresno County where food manufacturing job gains have been a major factor says EDD. ”Fifty eight percent of job growth was recorded in food manufacturing” says the July unemployment report released August 15, 2014.

Remarkably Well

A widely reported UC Davis study released this summer pointed to a key reason why we may not have seen the worse “California’s agricultural economy overall is doing remarkably well, thanks mostly to groundwater reserves,” said Jay Lund, a co-author of the study and director of the university’s Center for Watershed Sciences. “But we expect substantial local and regional economic and employment impacts. We need to treat that groundwater well so it will be there for future droughts.”

The study’s key findings of the drought’s effects in 2014 are:
Direct costs to agriculture total $1.5 billion (revenue losses of $1 billion and $0.5 billion in additional pumping costs). This net revenue loss is about 3 percent of the state’s total agricultural value.
The total statewide economic cost of the 2014 drought is $2.2 billion.
The loss of 17,100 seasonal and part-time jobs related to agriculture represents 3.8 percent of farm unemployment.
428,000 acres, or 5 percent, of irrigated cropland is going out of production in the Central Valley, Central Coast and Southern California due to the drought.

Still, crop by crop, Valley farmers are laboring to meet record demand for their crops this year despite glum water news. From milk to tree fruit, nuts to tomato paste – the world is signaling farmers to keep on trucking, so to speak.

This summer’s processing tomato crop is a case in point with USDA predictions reported in recent days that farmers will produce a record high 14 million tons of product, over 17% more than last year’s crop. Kings County acreage is up over 18% although Fresno’s’  acreage is down due to lack of water.

Likewise in the state’s number one ag crop – milk  – with dairymen despite high hay costs pushing Bessie to make more.

Kings Milk Production Up 6.8%

Kings County dairy farmers are milking at a furious pace this year with July production up 6.8% reports CDFA. Number one milk maker Tulare County increased their July year over year total 4.1%. Overseas demand for milk is considered a key reason. Obviously if dairy farmers want to make more milk they are not about to lay off their workforce.

If California almond growers are worried about water – and they should be – that worry is not yet slowing up with plans to plant  even more acreage in the state. The USDA reported in July that “There were at least 8.33 million almond trees sold by California nurseries since June 1, 2013. This represents a 25 percent increase from those sold a year earlier.” Doesn’t sound like they are racheting back does it?

How about wine grapes? Western Farm Press recently reported that “ many observers are projecting the 2014 wine grape harvest to total around 4 million tons. That compares to the record highs of the last two years when production exceeded that level.” which would be the third highest ever.

Hard To Keep Up

And nuts?. A recent Western Growers story points to demand as the  key factor encouraging acreage growth among all nut crops in the state.

“Bob Klein, who is the manager of both the California Pistachio Research Board and the California Pistachio Administrative Committee, said he does not see a scenario in which supplies can catch up with demand over the next several decades.  He was speaking specifically of pistachios but indicated that the future is at least equally bright for almonds.  Klein said the U.S. Department of Agriculture’s Foreign Agricultural Office has estimated that demand for all food will double by 2050 because of increasing populations and rising incomes.  Even if pistachio demand only grows by 50 percent in the next few decades, Klein said it will be difficult for growers to keep up.”

Indeed this fall’s walnut crop looks good so far according to one  recent estimate reported in Fresh Plaza. “California walnut processors expect a record crop this fall, with a consensus estimate of 541,000 tons, about 10 percent more than last year’s harvest. If accurate, the crop will also be much larger than the previous record of 504,000 tons harvested in 2010.”

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