Food Grows Where Water Flows

For more than 25 years, the California Farm Water Coalition has been working with our members to share information about farm water issues, and reminding Californians that "Food Grows Where Water Flows."

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CFWC Blog

Updated Map – 2021 Farm Water Supplies Cut Again

June 21, 2021 in CFWC Blog, Drought, Fact Sheets

Updated June, 2021:

California farms are bearing the brunt of this year’s short water supply and have been forced to reduce the acreage of popular California crops, such as asparagus, melons, lettuce, rice, tomatoes, sweet corn, and others.

Water supply reductions mean fewer fresh fruits and vegetables for consumers, massive farm-related job losses, and billions in lost economic activity, impacts that go beyond rural and disadvantaged communities. View the map here.

About 2 million acres of California’s irrigated farmland, or one out of every four acres, has already had its water supply cut by 95 percent or more. More than half of that is getting 0 percent. Another million acres has lost 80 percent of its water supply this year with much of the remaining farmland experiencing cuts of 25 percent or more.

Conditions are similar to those that occurred in 2015. According to a 2015 drought report issued by UC Davis, ERA Economics, and the UC Agricultural issues Center, water supply cuts led to the fallowing of 540,000 acres of farmland, 21,000 lost jobs, and an economic loss of $2.7 billion.

Critical reservoirs, including Shasta, Oroville, Folsom, Millerton, and San Luis combined have reached record lows. They are essential to supplying rural communities with drinking water, irrigating farms, supplying water to wildlife refuges, and recharging aquifers in the Sacramento and San Joaquin valleys where a majority of California-grown food products originate.

It is a distressing time for farmers, farm workers, and businesses that depend on agriculture all across California and illustrates the need to invest in infrastructure that will increase our ability to capture more water during wet years when it is abundant to save for dry years like this. It also puts a strain on consumers who want local, California-grown fresh food choices for their families.

Learn more:

 

Map Shows 2021 Farm Water Supply Cuts

April 12, 2021 in CFWC Blog, Drought, Fact Sheets

Click here to see the latest map. Updated: June 2021

California farms are bearing the brunt of this year’s short water supply and have been forced to reduce the acreage of popular California crops, such as asparagus, melons, lettuce, rice, tomatoes, sweet corn, and others.

Water supply reductions mean fewer fresh fruits and vegetables for consumers, massive farm-related job losses, and billions in lost economic activity, impacts that go beyond rural and disadvantaged communities. View the map here.

About 2 million acres of California’s irrigated farmland, or one out of every four acres, has already had its water supply cut by 95 percent. Another million acres has lost 80 percent of its water supply this year with much of the remaining farmland experiencing cuts of 25 percent or more.

Conditions are similar to those that occurred in 2015. According to a 2015 drought report issued by UC Davis, ERA Economics, and the UC Agricultural issues Center, water supply cuts led to the fallowing of 540,000 acres of farmland, 21,000 lost jobs, and an economic loss of $2.7 billion.

Critical reservoirs, including Shasta, Oroville, Folsom, Millerton, and San Luis combined have 1.1 million acre-feet less water in storage today than they had at the end of March in 2015, California’s last critically dry year. Levels in these reservoirs are currently at 56 percent of average, compared to 72 percent of average at this time in 2015. They are essential to supplying rural communities with drinking water, irrigating farms, supplying water to wildlife refuges, and recharging aquifers in the Sacramento and San Joaquin valleys where a majority of California-grown food products originate.

It is a distressing time for farmers, farm workers, and businesses that depend on agriculture all across California and illustrates the need to invest in infrastructure that will increase our ability to capture more water during wet years when it is abundant to save for dry years like this. It also puts a strain on consumers who want local, California-grown fresh food choices for their families.

Learn more:

 

What can the 2015 drought tell us about the impacts of a drought in 2021?

April 8, 2021 in California Water, CFWC Blog, Drought, Fact Sheets, Farm Water & You, Food Production, Water Supply

Info Graph – What can the 2015 drought tell us about the impacts of a drought in 2021?

Taking a look back at a similar water year can help us understand what might be in store for us through the rest of this year and possibly beyond.

What can the 2015 drought tell us about the impacts of a drought in 2021?

California is in a critically dry year, the same as in 2015. Water will be extremely tight for thousands of farmers around the state, and many of them have already received notice that their water supplies are being cut by up to 95 percent.

In 2015, water supply cuts of that magnitude led to over half a million acres of land taken out of production. Had there been sufficient water supplies in 2015, the amount of land that was fallowed could have produced:

  • 8.6 billion heads of lettuce, or
  • 594 million cartons of melons, or
  • 54 million tons of grapes, or
  • 27 million tons of tomatoes. 

Instead, because no water was available, those fields produced nothing but weeds.

California is the No. 1 farm state in the nation with tens of thousands of agricultural jobs, with wages at all income levels covering all 58 counties. When farms aren’t growing food for people, it affects jobs, personal income, and their quality of life. In addition, farm-related jobs contribute hundreds of millions of dollars annually to state and local tax revenue which provide services local communities value, like police, firefighters and teachers.

In 2015, a total of 21,000 jobs were lost with an economic impact of $2.7 billion across the state.

Preparing for Drought

Farmers have been preparing for another drought and have invested heavily in water use efficiency projects, including drip and micro-sprinkler irrigation systems, soil moisture monitoring, and computerized irrigation controllers. But the savings achieved by those investments haven’t been enough to avoid wide-scale land fallowing due to the massive water supply shortages farmers are experiencing again this year.

Info Graph – Long Term Impacts on California From Water Supply Cuts

Looking long-term, continuing water shortages will have a devastating effect not only on California farms but also on the farm related jobs throughout our economy.

Long Term Impacts on California From Water Supply Cuts

The Blueprint Economic Impact Report, available HERE, indicates that over the next 30 years, water supply cuts will lead to the permanent loss of 1 million acres of productive farmland.

Fewer healthy foods will be available from California farms. The report estimates that California will permanently lose:

  • 86,000 acres of vegetables,
  • 130,000 acres of fruit-producing trees,
  • 129,000 acres of wine and table grapes,
  • 327,000 acres of nuts, and much more.

These reductions translate into the permanent loss of 85,000 jobs, half of which are off the farm, such as food processing, transportation, wholesale, retail, and ports. They also mean the permanent loss of over $535 million in tax revenue which, again, is used to provide the services local communities value, like police, firefighters and teachers.

Actions, including better flood management for groundwater recharge, improved conveyance to move water to potential groundwater banking areas, new and enlarged storage projects, and regulatory reform designed to improve in-stream flows for ecosystem benefits while protecting agricultural water supplies can help minimize the effects described above. Federal investments toward improving water supply infrastructure is essential to providing a secure water future to sustain the nation’s food supply, meet urban and suburban needs, and provide for a healthy environment throughout California.

Managing More Efficiently with New Technologies – Precipitation Forecasting

April 5, 2021 in CFWC Blog

Managing More Efficiently with New Technologies – Precipitation Forecasting

Imagine the possibilities if we knew months in advance if the water year was likely to be wet or dry – with the same accuracy as that of a three- to five-day weather forecast.  Growers could make spring planting decisions with reduced uncertainty and water agencies would be able to allocate their resources for optimum efficiency.  Is this just a fantasy or could it be a reality?

PSL Forecast Anomalies 2020/2021

Great progress is being made in improving the accuracy of snowmelt runoff forecasting, through approaches such as the airborne snow observatory technology developed at the National Aeronautics and Space Administration, but the lead time of runoff forecasting remains limited because it is based on making forecasts of precipitation already on the ground in the form of snowpack.  Answering the questions of “will this winter be wet or dry?” or “will the rest of this winter be wet or dry?” requires improving precipitation at lead times beyond that of a weather forecast.  Conventional weather forecasts are issued with lead times of up to two weeks but have limited accuracy beyond the first week.

The National Oceanic and Atmospheric Administration (NOAA) recently released a report to Congress (https://repository.library.noaa.gov/view/noaa/27408) describing the challenges and opportunities associated with improving sub-seasonal to seasonal (S2S) precipitation forecasts.  S2S forecasts extend beyond a conventional weather forecast, with lead times of up to six weeks (sub-seasonal) to a year or two (seasonal). When NOAA’s National Weather Service (NWS) conducted a California drought service assessment in 2014, the more than one hundred water managers surveyed overwhelmingly identified an accurate seasonal precipitation forecast as the high-priority service that the NWS should provide.  NWS’ Climate Prediction Center has been operationally issuing S2S precipitation outlooks since the mid-1990s, but their skill for the western U.S. has been minimal, just slightly better than predicting average weather conditions.  Forecasting precipitation at S2S lead times is a scientifically challenging problem, and one that has received little federal research support. 

This experimental forecast made in October for DWR by NOAA’s Earth Systems Research Laboratory, for example, has correctly predicted California’s dry winter.

NOAA’s report to Congress recommends a pilot project for improving S2S precipitation in the western U.S. specifically intended to support water management.  There is precedent within NOAA for focused projects designed to meet specific objectives and held accountable for meeting those objectives.  Its Hurricane Forecasting Improvement Project, for example, was designed to improve forecasting the track of Atlantic hurricanes.  The pilot project would take roughly a decade to complete and would entail significantly updating and improving existing NWS dynamical weather models.  The recommended pilot project is not currently funded; NOAA would need a new appropriation for the work. 

In the near term, the Department of Water Resources has been exploring potential approaches to improving S2S precipitation forecasting with researchers partners at NASA, NOAA, and the University of California, taking advantage of tools such as statistical models that could help inform an eventual NOAA pilot project.  This experimental forecast made in October for DWR by NOAA’s Earth Systems Research Laboratory, for example, has correctly predicted California’s dry winter.

Water Futures: A Hedge Against Potential Price Increases or Betting the Farm?

March 15, 2021 in CFWC Blog

Much has been written lately about a new water futures contract market that provides a way for individuals to profit (or lose) off of fluctuating water prices in California. Based on the Nasdaq Veles Water Index (Index), buyers and sellers are able to speculate on the future price of water to either hedge against price changes if you’re a water user, or profit off of price changes if you’re a speculator who has no other interest than making money.

Adding to the confusion is the interchanged use of the terms “water futures,” “water market,” and “water transfers.”

“Water futures” are contracts that allow a buyer to try and outguess what the future price of water will be and turn a profit if they’re right. The participants in water futures contract trading understand that tangible water will not be delivered as part of the agreements.

“Water markets” are a collection of commercial activities where actual water is bought and sold and is, by and large, regulated by the State Water Board.

“Water transfers,” also regulated by the State Water Board, provide a mechanism to balance water needs within a region or between regions, and have helped increase the flexibility of California’s water system.

Water Transfers vs Water Markets vs Water Futures Trading: On-Farm

There is a clear distinction between water transfers between willing sellers and willing buyers and water markets. Water markets, similar to water futures contracts, are often associated with third parties’ (which could be in other states or even countries) speculation on water pricing without actively engaging in the management/movement of water.

Farmers are often cited as potential beneficiaries of water futures trading because rising water prices can affect the bottom line when they’re irrigating a crop. But are farmers actually going to use this tool to help manage water costs? That remains uncertain.

The Water Futures Index

The Nasdaq Veles Water Index is based on the prices of actual historical water trades in California that include, essentially, State Water Project (SWP) and Central Valley Project (CVP) transactions, as well as sales within four Southern California adjudicated water basins: the Central Basin, the Chino Basin, the Main San Gabriel Basin, and the Mojave Basin Alto Subarea.

Contracts are sold in 10-acre-foot blocks. The index price as of March 9, 2021 for water contracts ending in June of 2021 was $597 per acre-foot. The June 2022 index price was $603, a difference of just $6 per acre-foot, however that could change significantly if water supply conditions change down the road, like if we enter another period of extended drought.

Source: Nasdaq Veles Global Indexes

For example, from March 2020 to June 2020 the index price increased from a little over $200 per acre-foot to roughly $700/ af. It has since fallen back to the sub $600 range, and again, is based on prior actual water sales for both agricultural and urban supplies.

Contracts are available for up to two years in length and are typically settled quarterly on the third Wednesday of the month.

Terms usually end in March, June, September, or December and while they have a set period, contracts can be traded at any time throughout their term.

Someone buying into the water futures market is not buying actual water. Instead, they are attempting to guess where water prices will be in the future. If you buy a June 2022 water futures contract at today’s price of $603, you’re hoping that the index price when the contract is sold is higher than $603. If the price declines, you’ll sell the contract at a loss.

In the practical sense, how would a water futures contract benefit a farmer? Most of the published examples go something like this:

A farmer buys five contracts (50 acre-feet total) at $600 per acre foot for a cost of $30,000. Under the assumption that the index price of water rises to $800, the farmer is set to make $200 per acre-foot X 50 acre-feet for a total profit of $10,000. That profit could then be used to buy water at the actual price when it is needed for the irrigation season.

The reality is, during a shortage, local agricultural water prices could easily be $400 an acre-foot. When the farmer actually needs water, the $10,000 profit from the index transaction, at $400 per acre-foot, would buy 25 acre-feet of water, enough to irrigate about 10 acres of tomatoes or roughly 7 acres of almonds. The same amount of water could be enough to supplement 25 existing acres of production with an extra one acre-foot per acre. Thinking bigger, under this same scenario, water futures contracts intended to supplement 250 acres of farmland would cost $300,000 up front and there is no guarantee of a profitable return.

The Index also provides a mechanism for purchases on a 10% margin, meaning the up-front investment could be considerably less, $30,000 in the prior example. However, the risk is considerably more if cash reserves aren’t available when the contract matures and prices have declined. That kind of risk led to a few people jumping from buildings after “margin calls” during the stock market crash in 1929.

It is hard to imagine water futures operating at a scale that actually works for agriculture. Perhaps protecting a high-value crop with supplemental water (if it’s available) is worth the high price of purchasing one or more water futures contracts. But farmers are risk-aware by nature. Is it reasonable to think they’re likely going to gamble a lot of up-front capital under the assumption that water prices will rise?

The Magic 8 Ball would likely say, “Don’t count on it.”

Delta smelt remain on the brink of extinction – We can change that

January 12, 2021 in CFWC Blog, Endangered Species, Endangered Species, Invasive Species

Recent fish surveys confirm what many biologists, ecologists, and water experts have known for some time – Delta smelt remain on the brink of extinction. Zero Delta smelt were found in the California Department of Fish and Wildlife’s recent Fall Midwater Trawl Survey. Even the Enhanced Delta Smelt Monitoring Program, which is specifically designed to capture the tiny fish, only successfully caught two Delta smelt from September 8 to December 11, 2020.

Improving the health of native species like Delta smelt is an imperative, as it is critical to the health of our environment and the reliability of our water supplies. As an indicator species, the Delta smelt’s absence tells a grim story about the health of the Delta ecosystem, making these recent findings all the more concerning.

These results are not surprising, when California has made slow progress on actions like habitat restoration that are essential to restoring native fish populations.

Photo: US Fish and Wildlife Service

For many years flows, meaning pumping from the Delta, have been blamed as the primary cause for the decline in Delta smelt. As a result, restrictions on pumping from the Delta have been the default approach to protecting these fish.

The fact that Delta smelt populations are still desperately low – despite years of restricted pumping – confirms that a flows-only approach isn’t effectively protecting Delta smelt populations.

Equally concerning is the fact that a flows only approach has at the same time had a detrimental impact on the agriculture industry and the communities that rely on surface water, not only in the Central Valley but for anyone who buys and eats food grown there.

In fact, there are a multitude of stressors on native fish populations – including invasive and predatory non-native species, loss of habitat, contaminants, and changes in food availability and quality – and restoring the health of Delta smelt requires a broad-based approach that includes targeted actions to effectively address all these factors.

Let’s use another analogy: Responding to the near-extinction of Delta smelt by relying on pumping restrictions alone is as effective in restoring their overall health as responding to the COVID-19 pandemic by relying on bar and restaurant restrictions alone. Can some data-based restrictions be a lever for change? Absolutely. But aggressive, austere restrictions that are not supported by the science cannot be relied upon to solve the entirety of the crisis – particularly when there are severe economic consequences associated with the restrictions, too.

Ultimately, we must pursue a combination of functional flow and non-flow measures, including habitat restoration and adaptive management, to meet the needs of native fish and wildlife species. Without a more holistic approach, the Delta smelt will go from endangered to extinct.