Near the confluence of the Merced and San Joaquin rivers, the heart of the California farm belt, Bob Kelley watches the driest year ever erode water supplies and prospects for the dairy business his family began in 1910.

The amount of water available for the 2,800 acres (1,133 hectares) of corn and alfalfa Kelley grows to feed more than 6,500 cows may drop as much as two thirds, so fewer crops will be planted and some animals will be sold to avoid the expense of buying grain, he said by telephone from Newman, about 83 miles (134 kilometers) southeast of San Francisco.

“It would impact us for not just 2014, but all of 2015,” said Kelley, 60, who runs a local water district that will cut output by at least half. “I’m anticipating a very difficult time, and I’m probably the best off of anybody I know.”

The drought in California, the top U.S. agricultural producer at $44.7 billion, is depriving the state of water needed to produce everything from milk, beef and wine to some of the nation’s largest fruit and vegetable crops, including avocados, strawberries and almonds. Lost revenue in 2014 from farming and related businesses such as trucking and processing could reach $5 billion, according to estimates by the 300-member California Farm Water Coalition, an industry group.

The state was the driest ever in 2013, a third straight year of little moisture. California Governor Jerry Brown declared a drought emergency on Jan. 17 as arid conditions he called “unprecedented” continued well into the annual rainy season that runs from October through March. Reservoirs on Jan. 27 were at 61 percent of average, while the mountain snow-pack as of Dec. 30 that supplies most of the state’s water was at 20 percent of normal for that time of year, data show.

David Fuller's view

Agriculture has increasingly become a global business and more farmers worldwide will be affected by excess moisture rather than the drought that California is experiencing.  Nevertheless, the State’s agricultural production of $44.7 billion, mentioned in the article above, is huge.  Consequently, California’s drought problems will affect prices for a number of popular fruits, nuts and vegetables, and not just in the USA as we have seen in previous years.  This is an early warning that last year’s mostly lower food prices, thanks to better weather conditions in many agricultural regions, may have been anomaly.