Food Inflation Watch: California Farmers' Water Costs Surge 700% After Government Cuts Supply

Tyler Durden's picture


When we reported on the government's decisiosn to withhold irrigation water to California for the first time in 54 years, we warned there would be consequences: farmers are hit hardest as "they're all on pins and needles trying to figure out how they're going to get through this." Fields will go unplanted (supply lower mean food prices higher), or farmers will pay top dollar for water that's on the market (and those costs can only be passed on via higher food prices). Sure enough, as Bloomberg reports, farmers in California’s Central Valley, the world’s most productive agricultural region, are paying as much as 10 times more for water than they did before the state’s record drought cut supply.


As Bloomberg Briefs' Alison Vekshin reports,

Costs soared to $1,100 per acre-foot from $140 a year ago in the Fresno-based Westlands Water District, which represents 700 farms, said Gayle Holman, a spokeswoman. North of Sacramento, the Western Canal Water District is selling it for double the usual price: $500 per acre-foot, about 326,000 gallons.


The most severe water shortages are in the San Joaquin Valley, in an area from Bakersfield to Patterson and Chowchilla, said Mike Wade, executive director of the California Farm Water Coalition, a Sacramento-based group representing farmers and most agricultural irrigation districts in California.

The drought gripping the state that supplies half the fruits, vegetables and nuts consumed in the U.S. has led federal and state providers to curtail the water they distribute to farmers. That’s prompted districts representing growers to buy and sell for escalated prices from other parts of the state.


The drought threatens to boost produce costs that are already elevated following a December frost, according to the U.S. Agriculture Department. The price of fresh fruit is forecast to rise as much as 6 percent this year, the department said last month.


Dairy products, of which California is the biggest producer, may rise as much as 4 percent. After three years of record-low rainfall, 82 percent of the state is experiencing extreme drought, according to the U.S. Drought Monitor, a federal website.


The rising prices are “a function of supply and demand in a very dry year and the fact that there are a lot of competing uses for water in California,’’ said Mat Maucieri, a spokesman for the Bureau of Reclamation.

*  *  *

Seems like it's time for The Fed to print some more rain...

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 07/24/2014 - 20:55 | 5001710 world_debt_slave
world_debt_slave's picture

not much water used in Soylent Green

Thu, 07/24/2014 - 20:58 | 5001724 Publicus
Publicus's picture


Thu, 07/24/2014 - 21:06 | 5001737 knukles
knukles's picture

Quit floating the water through the aqueduct system to Los Angeles and points south for car washes and wet tee shirt contests, FFS.
Yes, there's a water shortage but State and Federal meddling and fucking about for political purposes are making this 1,000's of times worse than it already is.  And further problems cause by further meddling will be met with further political solutions and further crop shortages.

Believe me, folks, I know as I've family members in the Ag biz ....
Up close and personal

Those people down south have the resources, same as anybody else, to build large scale desal operations to take care of their "needs"
Not all their "wants", but their "needs".

I mean fuck me... just when we're gonna have more than enough New Labor to pick the crops, there will be no crops to pick

Only the government....

Thu, 07/24/2014 - 21:08 | 5001747 world_debt_slave
world_debt_slave's picture

another reason that Northren California wants to break off from Southern California.

Thu, 07/24/2014 - 21:12 | 5001761 knukles
knukles's picture


Thu, 07/24/2014 - 21:20 | 5001788 90's Child
90's Child's picture

California's grow some good weed though.

Tahoe OG kush is a gnarly strand.

Save the weed people.

Thu, 07/24/2014 - 21:26 | 5001810 knukles
knukles's picture

Recent serious stories in many CA news papers and local telly about how the pot farms are contributing to the water shortage.... just like electric cars to the road tax revenues.


Thu, 07/24/2014 - 22:04 | 5001855 DaveyJones
DaveyJones's picture

lawns in arid places are next to the stupidest thing we've ever done. Next may be "modern agriculture." Before corporate giants took it over, food was actually (and wisely) spread out all over this country not slammed into one arid state with an artifical water system designed to fail. Small farmers had millions of tiny catch ponds that captured and held rain water when it fell and used it in dry times when it didn't. Land and nature were never meant to grow one plant for hundreds of acres. The simple idea is insane, expensive, toxic and destined to fail. Add Monsanto and you've created suicide.       

Thu, 07/24/2014 - 22:38 | 5002054 markmotive
markmotive's picture

Conserve water or perish.

So says the United Nations.

Thu, 07/24/2014 - 23:47 | 5002202 El Vaquero
El Vaquero's picture

Not as fucking dumb as Albuquerque and Rio Rancho have been for the past couple of decades.  Conserve water so we can grow so that we can conserve even more water.  

Thu, 07/24/2014 - 23:57 | 5002221 Keyser
Keyser's picture

Last one out turn off the lights... Electicity is expensive as hell in Ca... 


Fri, 07/25/2014 - 00:06 | 5002242 TBT or not TBT
TBT or not TBT's picture

Let's build some fuckin' dams, on the one hand, and price the water a little closer to a causal relationship  between cost and price, on the other hand.   California hippies like the current governor Moonbeam halted the well planned CWP back when California had half the population it does now.   If we had those reservoirs, we'd have more water to bridge this drought.   

Fri, 07/25/2014 - 02:00 | 5002404 pakled
pakled's picture

You mean like.. 'Cadillac Deserted'?

Thu, 07/24/2014 - 23:43 | 5002195 El Vaquero
El Vaquero's picture

"Land and nature were never meant to grow one plant for hundreds of acres."


Yup.  I tried Three Sisters planting this year, and while I fucked up the timing a bit (I'll still be able to recover,) I've had hardly any squash bugs on the squash.  They get to the corn, find more corn, get confused and leave to my summer squash or my neighbor's squash.  

Fri, 07/25/2014 - 05:01 | 5002491 zhandax
zhandax's picture

I got bit by a squash bug last night while watering.  It was probably a good thing, as I wouldn't have otherwise known there were any around until the cucumber plants went missing.  Hurt like hell, though.  May have been aggravated by my cauterizing it with my cigarette.

Fri, 07/25/2014 - 05:53 | 5002624 Adahy
Adahy's picture

We've been really lucky on the squash bug front down here for once.  Thank goodness.
What's killing me this year is that damn cucumber bore 'worm'.  My dreams of a pantry full of homemade pickles are quickly fading.
Anyone know what to plant nearby to deter those bastards?

Fri, 07/25/2014 - 08:02 | 5002807 KHarper
KHarper's picture

I've had great sucess with the following method; find the spot where the worm is (look for excretment trails, and they are usually just above that area), stick a long straight pin it a few spots in that area (you are trying to penetrate the worm, thereby killing it). Check it the next day, if no excrement trails, you have killed the worm. If you did not kill the worm, it's time to perform surgery. Take a sharp knife and make an incision in the area you think the worm is, pull the worm out with your knife. They will be one to 2 worms. Once you've killed the worms, place dirt and mulch over the site and water. The areas will then form roots and the plant will continue to produce. 

Fri, 07/25/2014 - 00:53 | 5002328 NickVegas
NickVegas's picture

Based on the tone, you still don't see it is by design.

Fri, 07/25/2014 - 06:40 | 5002666 Zodiac
Zodiac's picture

And don't forget the lush golf courses for the rich corporate types

Fri, 07/25/2014 - 00:04 | 5002233 AustriAnnie
AustriAnnie's picture

There are a few towns in California that would not have a service sector to speak of if not for the weed business.  Wonder what they would collect in sales tax if not for pot growers?  That, along with other cash-green businesses, are keeping some towns afloat.

But the pot growers are evil. We should stop those evil growers from consuming water! Especially since so many of them grow in locations such as Humboldt County and Southern Oregon, where water is so scarce....

I think we should give all the water to solar energy producation and fracking operations.  That would allow us to rule the world by being energy sufficient, and give us the power to force Putin into submission.  


Thu, 07/24/2014 - 21:09 | 5001752 Four chan
Four chan's picture

farm in an arid region, risk ending up in a desert. you are now there.

Thu, 07/24/2014 - 21:12 | 5001766 Abitdodgie
Abitdodgie's picture

So water went up 700% but dairy products will only go up 4% with the amount of water that cows drink, really?

Thu, 07/24/2014 - 23:32 | 5002169 FeralSerf
FeralSerf's picture

In California cows are fed a lot of corn. It takes a lot of water to grow the corn. Ditto alfalfa.

Thu, 07/24/2014 - 21:19 | 5001780 knukles
knukles's picture

Yep... Is reality.
Reality also is that there's goodly amount of water for Ag, but is shipped to urban areas.

If everybody paid same per "unit feet" the voters would go berserk.... but no lawns, etc.
This way they can feel it in food prices, no starve, but be told about an emergency, needs more government intrusion, regulation and higher taxes, etc.

Is part of the manipulation into the NWO's Agenda 21, etc, etc, etc, etc, 

Do not take this lightly.  CA either supplies directly most of the fruit, veggies and nuts to the USofA, etc., or at a minimum, sets the Ag prices at the margin. 
You folks at your NYC fancy restaurants, only reason your veggies are so fresh is they're air freighted to you.  Otherwise the peons eat the crap off a rail cars and trucks, across the country.
No shit, Sherlocks.

Hell, as another example, sardines caught in Monterey Bay* (lots and lots, guys) are trucked to Salinas for cleaning and flown on ice to Asia as a delicacy.
Screw this up and starve, Bitchez.

*they still haven't found John Denver's head

Thu, 07/24/2014 - 22:11 | 5001981 sleigher
sleigher's picture

No lawns?  "The city will fine me $500 if I don't keep a greem lawn?  But the state will fine me $500 if I do."


That alone should explain where we are and what to light on fire.

Thu, 07/24/2014 - 22:19 | 5002002 ACP
ACP's picture

Well, the CA Dept of Education has to pay for that $50 million in routers and servers that their IT department buys every year to justify their budget, which are sitting in closets, never to be used.

Thu, 07/24/2014 - 22:28 | 5002026 knukles
knukles's picture

Oh, so fucking true.  A fellow who'd worked (consultant) for the state once reported that CA has in excess of $7 billion in material purchased every year that is declared surplus, unneeded, junk, etc., and sold off.  Interestingly, the sales contracts are never widely circulated.  Nudge nudge wink wink.
And he said that is entirely similar, same practices, etc., in just about every other state.
No shit.
Oh, he was never retained after the initial report was submitted.
Rug meet sweep, sweep, meet rug

You self aggrandizement at work

Thu, 07/24/2014 - 22:35 | 5002040 ACP
ACP's picture

Speaking of consultants for CA...I've known several who worked for the state and quite often it takes up to 4 MONTHS to get paid for their work. Just regular IT folks who work alongside state employees.

But oh, when an actual EMPLOYEE gets furloughed for 3 days and month, holy shit the sky is falling!!!

Fri, 07/25/2014 - 06:46 | 5002675 Zodiac
Zodiac's picture

In the last drought here in Texas, I and everyone I knew just watered at 3-4 in the morning when the water nazis were not around. Fuck that shit you were talking about the city vs. the state.

Fri, 07/25/2014 - 06:51 | 5002681 Zodiac
Zodiac's picture

Also, you can water during the day if you use soaker hoses and don't let any water drip or flow onto any pavement.  Fuck the government nazis!

Thu, 07/24/2014 - 22:16 | 5001994 ACP
ACP's picture

Exactly...spoken from a true Central Valley resident (like I used to be).

Never let a crsis go to waste. What a money maker, $500 fines for watering your lawns or otherwise wasting water. Apparently it's more egregious than red light violations, which are "only" $483 + court fees and administrative costs, of course, at least in the Ebay.

Don't forget all the tomato losses from all the college students crashing big rigs while running illegal 20 hour shifts at the behest of their employers, while the CHP looks the other way.

Thu, 07/24/2014 - 23:55 | 5002206 FeralSerf
FeralSerf's picture

"If everybody paid same per "unit feet" the voters would go berserk.... but no lawns"

The homeowner pays a LOT more for an acre foot of water to water his (useless) lawn than the farmer pays. Figure it out -- how many acres of lawn does the average homeowner have? Maybe a twentieth of an acre? A foot of water on it should be enough for the year if he doesn't send too much down the gutter (which he usually does). That's only $50 for a year if water's $1,000/acre-foot. I pay that much every month.

California has very strange and unusual water laws compared with the rest of the dry country. Some groups get lots of water for a pittance, others pay much more if they can get it. It's all in the water RIGHTS.

Check out JG Boswell Co. They own a lot of water rights that are now worth a fortune. They use a lot of it growing cotton. Yum!

Fri, 07/25/2014 - 00:13 | 5002254 TBT or not TBT
TBT or not TBT's picture

A great read on this:   Cadillac Desert 

Thu, 07/24/2014 - 21:20 | 5001781 JR
JR's picture

Raising the cost of water from $1,100 per acre-foot from $140 a year ago rather than rationing because of the drought makes water districts no different from ambulance chasers.

To sell water to the highest capable bidder effectively eliminates the smaller operations.

Thu, 07/24/2014 - 21:20 | 5001784 F-Tipp
F-Tipp's picture

I wish anyone understood/cared knukles. This great state...

Fri, 07/25/2014 - 00:26 | 5002279 benb
benb's picture

Many do understand and do care.

Few Zerohedgers seem to.

This is the implementation of Agenda 21 and Neo-fuedelism. The weather is being manipulated to a great degree by NWO elements of the federal government who are sculpting the population distribution and impeding food production. It is done to drive people from the rural areas to later buy up the land for pennies on the dollar. It is done to also impoverish the population and drive them into the cities.

Again, the drought is induced. It is called weather modification.

If you don't know that you're just talking out your ass.

And that is the truth of the matter.

Fri, 07/25/2014 - 00:16 | 5002261 Chuck Walla
Chuck Walla's picture

Was just in the Central Valley. They are pissed and the land sits unused in some places. The new dust bowl.


Thu, 07/24/2014 - 21:14 | 5001768 max2205
max2205's picture

I thought NJ was the garden state

Thu, 07/24/2014 - 21:21 | 5001786 knukles
knukles's picture

Hah ha ha haha ha
NJ good at raising ghettos and poverty

Thu, 07/24/2014 - 21:39 | 5001865 DaveyJones
DaveyJones's picture

..and taxes

Fri, 07/25/2014 - 07:08 | 5002702 strangeglove
strangeglove's picture

More like the Garbage State!

Fri, 07/25/2014 - 07:24 | 5002719 Bingo Hammer
Bingo Hammer's picture

No water in Claifornia?....IT WAS PUTIN!

Putin did it!

(sorry I'm only writing what they told me to write)

Thu, 07/24/2014 - 20:57 | 5001714 WayBehind
WayBehind's picture

Food is getting more expensive but just wait when there is no food left ...

Thu, 07/24/2014 - 21:11 | 5001763 SHEEPFUKKER

Time to start eating Alpo, but what will Fido eat?

Thu, 07/24/2014 - 21:14 | 5001769 XenoFrog
XenoFrog's picture

Don't worry. Our Dear Leader is working on an executive order to add pets to the EBT Food Stamp program.

Thu, 07/24/2014 - 21:26 | 5001797 knukles
knukles's picture

Yes, and the FF's purebred Portuguese Water Dog rorm show bloodlines gifted by Ted Kennedy (? or other prominent politician) made sure that there were no pound puppies in the palace.

The prince was ghastly, yet the peasantry cried, nonetheless

Fri, 07/25/2014 - 00:17 | 5002264 Chuck Walla
Chuck Walla's picture

Old Teddy was a dog fucker, too? Not that surprised...


Thu, 07/24/2014 - 22:09 | 5001971 dobermangang
dobermangang's picture

Q: What did Obama say after eating a sled dog?

A: It tastes like mush.



Fri, 07/25/2014 - 08:04 | 5002811 ThisIsBob
ThisIsBob's picture


Thu, 07/24/2014 - 21:30 | 5001825 world_debt_slave
world_debt_slave's picture

food companies are substituting real food with wood pulp. Read your food labels, anything that has "Cellulose" and/or derivative thereof is wood pulp, no nutrional value at all for humans.

Do NOT follow this link or you will be banned from the site!