Despite The Drought, California Farms See Record Sales In 2014

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Almonds hang from a branch at an orchard in Firebaugh, Calif. Despite the strain of prolonged drought, in 2014, California farms sold $54 billion worth of crops like almonds or grapes, and animal products like milk. (Getty Images)
Almonds hang from a branch at an orchard in Firebaugh, Calif. Despite the strain of prolonged drought, in 2014, California farms sold $54 billion worth of crops like almonds or grapes, and animal products like milk. (Getty Images)

While prolonged drought has strained California agriculture, most of the state's farms, it seems, aren't just surviving it: They are prospering.

The environment, though, that's another story. We'll get to that.

But first, the prosperity. According to new figures from the U.S. Department of Agriculture, in 2014, the year the drought really hit, California's farmers sold $54 billion worth of crops like almonds or grapes, and animal products like milk.

That's an all-time record, up 5 percent over the previous year, and an increase of 20 percent from 2012.

If you're surprised by this, you haven't been paying close attention, says Daniel Sumner, an agricultural economist at the University of California, Davis. It's been clear for some time, he says, that California's farmers did very well last year.

There are two keys to the record-breaking revenues. The first is prices. "You have all-time high prices over the whole range of crops," says Richard Howitt, another economist at UC Davis.

Second, even though farmers didn't get their normal supply of water from rivers and reservoirs, they pumped it from underground aquifers instead. According to a report that Sumner and Howitt co-authored last year, farmers in 2014 replaced about 75 percent of their surface water deficit by draining their groundwater reserves.

James McFarlane, who grows almonds and citrus near Fresno, is one of those farmers. He says that drought has been "beyond terrible" for some farmers. But for him personally? "It's been a good year. We've been able to make some money, and you have to just count your blessings and call that a good year," he says.

McFarlane has received some irrigation water from Kings River, via the Fresno Irrigation District, but he is also pumping water from his wells. "If it weren't for the wells, we couldn't have made it work," he says.

Howitt says that there are two contrasting realities in California agriculture these days. "Some people just don't have the underground water. You meet these people and they really are in poor shape," he says. But where there is water, "you have investors pouring money into planting these almond trees at a rate that they've never seen before."

But this is also where the environmental damage comes in. Those underground reserves are getting depleted, wells are going dry, and in many locations, the land is sinking as water is drawn out. When this happens, it permanently reduces the soil's ability to absorb and store water in the future.

California has enacted new rules that eventually should stop farmers from pumping so much groundwater, but for now, it continues. This year, California's farmers are still pumping enough groundwater to replace about 70 percent of the shortfall in surface water, according to a new UC Davis report.

Such extensive use of groundwater can't continue forever, and high commodity prices probably won't either. Milk prices already have fallen, and if China stops buying so much of California's nut production, those prices may crash as well.

On the good side, though, maybe rain and snow will return, filling the reservoirs again.

Copyright 2015 NPR. To see more, visit http://www.npr.org/.

Copyright NPR. View this article on npr.org.

Transcript

DAVID GREENE, HOST:

All right, so farmworkers are making less. Some of the farmers who employ them are making more. This is the reality of supply and demand. Farms that actually have access to water in this drought are doing well, really well, breaking all-time sales records. Here's NPR's Dan Charles.

DAN CHARLES, BYLINE: James McFarlane grows almonds and citrus in the heart of California's Central Valley, near Fresno. And he says the drought the last couple of years has been beyond terrible for some people. He knows farmers who had to tear out parts of orchards for lack of water. But when I ask him, has it been a good year or a bad year for you, personally, he has to think about it.

JAMES MCFARLANE: That's a good question. It's been a good year. We're going to make money, and you have to count your blessings and call that a good year.

CHARLES: Because he still has access to water. Some comes from Kings River, via the Fresno Irrigation District. He's also pumping water out of aquifers that lie underneath his orchards.

MCFARLANE: If it weren't for the wells, we couldn't have made it work.

CHARLES: But also there's a lot of demand for his crops. Prices are up. So as long as the water lasts, he's making money. In fact, across California, there are lots of farmers like James McFarlane. The U.S. Department of Agriculture announced this week that in 2014, the year the drought really hit, California's farmers sold $54 billion worth of crops and animal products like milk. That's an all-time record, up 5 percent over the previous year, up 20 percent from the year before that. They've been able to make up for most of the shortfall in rain and snow by tapping into water that's trapped underground. Richard Howitt, an economist at the University of California, Davis says basically, there are two contrasting realities in California agriculture these days.

RICHARD HOWITT: Some people just don't have the underground water. And if you meet these people and they are really in poor shape.

CHARLES: But where there is water...

HOWITT: You have investors pouring money into planting these almond trees at a rate that they've never seen before.

CHARLES: Because if you can grow a crop, it's a great time to be a farmer in California.

HOWITT: You have all-time, all-time record high prices over the whole range of crops.

CHARLES: Of course, this is agriculture, Howitt says. There will be good years and bad years. These prices probably won't last, especially if China stops buying so much of California's nut production. But on the good side, maybe rain and snow will fill the reservoirs again. Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.