The world of agriculture is always abuzz with news and happenings. As the nation’s premier land lender, we like to keep growers informed of the latest headlines coming from the United States Department of Agriculture:
Peaches are in season right now, which should be great for California; the state that ranks first in the U.S. for production of the delicious, fuzzy fruit. But unfortunately, the California drought has affected the peach industry statewide, just like it has other agricultural industries. The outcome? Smaller produce.
Here are some recent headlines coming out of the United States Department of Agriculture that we’d like to share with our colleagues in the agriculture industry:
California is still in the throes of an extreme drought, though some growers remain unscathed.
Tomato and almond producers are among those that have been spared. In fact, both are celebrating an epic year. Surprised?
Maybe you haven’t heard, but Florida’s climate has reason to celebrate. For 20 years, Florida has been hit with drought conditions – a trend that is seemingly shifting. The drought, though slightly interrupted by a few tropical storms, caused the state to lose many of its small ponds and smaller lakes, and also caused the nitrate levels in the water of Silver Springs to increase. Fortunately, a disruption in this drought pattern has occurred and things are (fingers crossed) back to normal. Florida is hoping that this rain return is not just a temporary teaser, but a long-lasting 15-20 year trend.
Wishful thinking? Maybe. But many forecasters do surmise a very rainy spring and summer for 2014. In fact, some say an unusually intense El Nino may be on the horizon, forming and lasting into 2015, which may bring even more rainfall.
Good news for Florida.
But potentially bad news for California.
Florida’s drought turnaround has been named the culprit of California’s extreme drought situation. California is in the midst of a worsening multi-year drought, which if all goes wrong, will follow in the footsteps of Florida’s drought. Things clearly aren’t trending in the right direction and, according to forecasters, aren’t expected to anytime soon.
Though there’s some hope that this possibly forming El Nino pattern may bring a wetter winter next year to California as well, there is really no concrete evidence on this actually happening. The truth is, drought tends to be a “creeping phenomenon” – a slow, gradual, and long-lasting disaster, with each year steadily seeing less and less rainfall.
Digging out of drought is tough. Solutions to relieve the situation are scarce. The only hope Californians really have to fall back on is an El Nino developing and bringing with it an extremely wet winter.
For California’s sake, here’s hoping!
Bankers South recognizes that farming and ranching is hard work, especially in times of grim weather conditions. Our goal is to assist in any way we can when it comes to farmland financing, helping to ease the process so you can focus on your farm’s day to day operations. Our AgAmerica lending program boasts ag land loans that align with various needs. To learn more, contact Bankers South. One of our agriculture loan experts will be in touch to aid you through the ag lending process.
According to the California Farm Water Coalition (CFWC) – the largest organization to focus solely on farm water with 5.6 million irrigated acres in California – lack of adequate rainfall this season will leave 800,000 acres of farmland (up from 500,000) left unplanted.
While many farmers desperately hope to see a turnaround in the persistently dry conditions, it’s not looking good. The longer these conditions continue, the more acres of farmland left unplanted. With the end of the “rainy” season quickly approaching, the odds of returning to a normal water year are slim.
Based on recent survey results, the negative impacts of the drought to California’s economy are astronomical.
- Farm production and associated business losses have increased about 50% to $7.48 billion according to February estimates.
- On-farm production losses are expected to double from $1.7 billion to approximately $3.56 billion.
- Unemployment is predicted to rise above 40% in valley communities.
- Roughly 15,000 on-farm and associated jobs will be lost, including processing, transportation, packaging as well as port jobs in Los Angeles, Long Beach, and Oakland.
- Come this spring and summer, some market watchers have predicted a 10% to 15% increase in consumer prices.
- Deliveries from other watershed sources will dwindle, with estimates ranging from above 50% to some as low as 15-25% of normal supplies.
Solutions in the face of the California drought are scarce. In fact, the drought has been called an “unsustainable situation” for farms in the times ahead. There simply is not adequate water in the system and there’s not much to be done to reverse the devastation. Had California leaders taken the drought seriously, had additional water storage facilities been built, and had the funneling of water to environmental uses been implemented into the system, then maybe the severity of the situation and its impacts would have been curtailed.
Bankers South recognizes that farming and ranching is hard work, especially in times of grim weather conditions. Our goal is to assist in any way we can when it comes to farmland financing, helping to ease the process so you can focus on your farm’s day to day operations. Our AgAmerica lending program boasts agricultural land loans that align with various needs. To learn more, contact Bankers South. One of our ag loan experts will be in touch to aid you through the ag lending process.