A team of UC Davis researchers has issued a preliminary analysis of a drought economic impact study for 2015. Richard Howitt, Josue Medellin-Azuara, Jay Lund, Daniel Sumner – all from UC Davis – and Duncan MacEwan (ERA Economics) conducted the analysis.
“We estimate about 564,000 acres will be fallowed because of the drought, resulting in a statewide reduction in gross crop farm revenue of about $856 million. Livestock and dairies may add another $350 million in direct revenue losses for 2015. Regional economic impacts of these cuts were estimated using the IMPLAN model for the Central Valley, and show approximately 18,600 full-time, part-time, and seasonal jobs lost once multiplier effects are included. The total economic loss to agriculture is estimated to be $2.7 billion.”
The pain is not spread uniformly across the state, but is most profound in the southern San Joaquin Valley — among the poorest towns in the state.
“Tulare is taking the hardest hit,” said the report’s lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.
In contrast, coastal counties of California — such as San Mateo and Santa Cruz — are doing better. These counties showed an increase in jobs in 2014, likely because there has been a shift away from Central Valley fruits and nuts into coastal berries.
The study’s estimates are preliminary. They will be revised as new information becomes available.