That means crops Flexibility and resourcefulness by California farmers have minimized drought-induced supply reductions for tree, vine and vegetable crops, for which California has large market shares and for which retail prices would be sensitive to California disruptions. Water is being shifted away from field crops that enter the food supply indirectly and for which California is not a dominant producer. These facts mean that even a severe drought is having only slight impacts on supplies to consumers and thus only slight impacts on consumer food prices. Of course, the longer the drought lasts, the larger the impacts. grown in the Central Valley have been more subject to government mandated water cuts than crops grown in regions with a higher reliance on groundwater or local deliveries. Crops such as fresh vegetables, berries, avocados, and high-priced wine grapes are grown mostly in regions that have faced fewer mandated cuts in water supplies. Crops such as tree nuts and tree fruit, lower-priced wine grapes, and field crops tend to be grown in the Central Valley where they have been subject to more surface water cutbacks . Second, when droughts occur, farmers have strong incentives to shift water to crops with higher net revenue per acre-foot of water in order to minimize economic losses. Forage crops such as hay, corn silage, irrigated pasture, grain crops, and other field crops have much lower revenue per acre and require more acre-feet of water than tree and vine crops or vegetables . During a drought year, multi-crop farms have strong incentives to reallocate their water to crops that generate more potential profit or at least minimize losses—including losses of capital invested in orchards and vineyards. A farm growing say, grapes and wheat, will naturally leave the wheat field unirrigated to save water and keep vines alive and productive. And, farms that have the physical and legal ability to shift water to others, hydroponic grow systems will naturally be more willing to transfer water away from low revenue per acre field crops and toward other farms, either nearby or, often, much further south, that use water for tree nuts, fruits, or vegetables.
Geography and irrigation infrastructure reinforces the tendency for concentrating supply reductions on field crops. The primary regions for growing fresh vegetables and berries in California include the central and southern coastal valleys and Imperial County. Imperial County receives irrigation water from the All American Canal and the Colorado River system, thus insulating the region from this California drought. The coastal valleys have had low precipitation but rely primarily on local groundwater aquifers that have not been under as much pressure during this drought as those in the Central Valley. Table 1 lists lettuce as the representative fresh vegetable crop, but the Central Coast is also home to most production of crops such as celery, broccoli, and spinach. The Central Coast, from Santa Cruz County down the coast to Ventura County, also produces most of the strawberries and raspberries. The high revenue per acre and per acre-foot of water for crops such as strawberries and lettuce also provide great incentives to apply the irrigation water needed to sustain production. Irrigation water per acre varies widely by crop and region, from around one acre-foot per acre for winter and spring vegetables grown in cool coastal regions with ample humidity, up to perhaps five acre-feet per acre for some trees and alfalfa in the hot and dry southern San Joaquin Valley. Of course, crop yields are also high where irrigation use is high. Water costs per acre-foot also vary widely from lows of $20 to $50 per acre-foot for surface water in the north, in places where water has been plentiful or where groundwater tables are near the surface. Regular pumping costs or delivery costs can exceed $1,000 per acre-foot in some regions and during drought periods. In general, however, it is clear that where physically feasible and allowed by regulation, farms will tend to use available water on tree, vine, and a few other crops while shifting water away from field crops. The drought affects California production of livestock commodities mainly through impacts on forage crop output. Poultry, egg, dairy, and finished beef production relies mostly on grains shipped in from other states. But, California-produced hay, silage, and irrigated pasture are important for cattle. Hay and silage, mostly produced in California, comprise about 20% of California milk production costs.
Therefore, a 50% increase in costs of hay and silage due to the drought would increase milk production costs at the farm by a bit less than 10%. Many observers point to the large share of California produce in the nation’s supply. Table 2 indicates California’s large share of U.S. production for tree, vine, and vegetable crops. These are the crops for which the current drought is not causing large supply cuts. California has smaller market shares for livestock and field crops where California supply reductions are large. These facts mean that even when California supply falls significantly, say for wheat, rice or hay, the amount in the U.S. or relevant global market falls by a much smaller percentage. Two caveats affect the interpretation of these production shares. First, for some important crops, the relevant markets are global. For example, Table 2 indicates that about two thirds of California almonds and about half of California rice are exported. Global market share is crucial. For almonds, California also has a large share of the global market so if supply were to fall , price would indeed rise. Exports are also important for dairy products, processing tomatoes, and rice. Markets for each of these commodities faces particular conditions. In the case of milk and tomatoes, California ships processed products into competitive national and global markets. For rice, California is a tiny part of global markets, but produces a specialized style of rice for which California production shortfalls do affect price somewhat. Finally, in the case of wine, imports matter as well as exports. While California dominates U.S. wine production, the market is quite competitive— especially in the case of wine from Central Valley grapes that are most likely to be affected by drought.Of course, farm price changes are not the only driver of retail prices.For example, the farm share of retail cost for strawberries or lettuce is 30% but only about 7% for bread. These relationships mean that even if prices rise at the farm, the percentage impact for retail consumers is generally muted—and more muted for processed products and those subject to costly and specialized marketing and transport. Flexibility by retailers and consumers also moderates price impacts.
Given that drought has slowly evolving impacts with substantial warning, wholesale and retail buyers have ample time to plan ahead and source products from where they are most available. Finally, many consumers are willing to substitute across products such as types of melons or lettuce, or from table grapes to some other fruit if relative prices change. California produces about 20% of the U.S. milk supply,hydroponic channel which can be processed into cheese. The farm share of the retail price for cheese is about 30%. That is, the price of milk before it has been processed into cheese makes up 30% of the cheese retail price. The own-price elasticity of demand for milk, a measure of the responsiveness of quantity demanded to a given change in price, is -0.3. Given the reduced hay and forage supplies to the dairy industry and associated higher prices, we estimate that California milk production may decrease by 5% due to the drought. Plugging these parameters into the equation tells us that the retail price of cheese would increase by 1%. California is the dominant supplier of fresh produce in the U.S. during much of the year, and its share of the U.S. lettuce market is about 80%. Given a 3% decrease in the quantity of lettuce supplied by California farms, retail price would increase by about 1.5%. California produces japonica rice for the U.S. and international markets. California rice accounts for about half of the relevant U.S. market, some of which uses specialized California rice and some of which uses medium grain rice produced elsewhere. The market share and demand elasticity reflect that California rice is unique for certain uses in some markets and has close substitutes for other uses. Because of severe reductions in surface water availability, California quantity of rice will likely fall by about 33%, and is therefore likely to cause a 10% increase in retail price. As a highly processed farm product, grapes account for only about 10% of the retail price of wine. We use an average elasticity of demand for wine grapes of about -0.5. We estimate that California makes up about half of the relevant market for U.S. wine sales, with imports comprising much of the rest. The reduction in grape quantity of only 1% due to the drought reflects the relatively low share of water costs in grape production costs and the limited supply flexibility for a perennial crop. These parameters imply the drought is likely to cause an increase in the retail price of California wine of about 0.10%.A convenience sample of 300 field workers was recruited from 15 farms in agricultural regions of California’s Central Valley during the summer of 2014. To gain access to the work sites, we invited employers to participate in the study through outreach at local meetings and events, flyers, and word of mouth. About 30% of the farms we approached agreed to participate in the study. Bilingual, bicultural field staff recruited employees of the farms by explaining the purpose and protocol of the study in Spanish and obtained consent. Eligible participants were 18 years of age or older, worked in the fields for at least 6 hours per day, understood Spanish and were neither pregnant nor had any impediment to swallowing the ingestible sensor .
All eligible participants who volunteered were enrolled in the study for a single day of data collection and were given a small monetary gift of appreciation. Preshift measures—A brief, preshift questionnaire was administered orally in Spanish to assess participant eligibility and to collect demographic information. A capillary blood sample was taken and analysed using the handheld i-STAT point of care test to measure serum creatinine . The i-STAT measurements are traceable to isotope dilution mass spectrometry through the standard reference material SRM967.Weight was measured in a base layer of clothing using a Seca 874 medical scale, and height was measured without shoes using a Seca model 213 stadiometer . Field staff recorded base layer clothing to ensure that the participant wore the same garments for weighing after the shift. Participants swallowed a CorTemp HT15002 ingestible wireless temperature transmitter probe . The probe transmitted core temperature at 1 min intervals.Participants were fitted with a Polar T31 ECG heart rate transmitter around the thorax which transmitted heart rate measurements at 1 min intervals. Signals from the probe and the heart rate strap were recorded using a CorTemp HT150016 Data Recorder attached to their belts. All staff involved in data collection were trained and supervised, and all equipment was regularly calibrated to ensure accuracy. Post shift measures—Following the work shift, ~7–12 hours after ingestion of the CorTemp, workers returned to the data collection station and unloaded all external equipment. They were then reweighed in the same clothing as they wore during the preshift weight, prior to ingesting any water or refreshments. A post shift questionnaire was orally administered in Spanish to obtain information on health history and possible social and behavioural risk factors, such as a personal or family history of kidney disease and work history. A second capillary blood sample was obtained to document serum creatinine, and glycated haemoglobin was measured using a Siemens DCA Vantage Analyzer . A single blood pressure was obtained in the seated position using an automated blood pressure cuff . Participants’ BMI, blood pressure, diabetes risk status and blood creatinine level were shared with them at the conclusion of the day, and participants who had abnormal results were referred to local health clinics for follow-up care.