Wines & Vines

September 2014 Wine Industry Finance Issue

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16 W i n e s & V i n e s s e P T e M B e R 2 0 1 4 S E P T E M B E R N E W S S acramento, Calif.—As federal officials note in the most recent report on drought conditions in the United States: "A strange thing happened on the path to California's historic drought: It rained." A tropical system from the Pacific drew light showers and high humidity across much of California in early August. The rain and over- cast conditions provided some irrigation relief and slowed the evaporation of water from stor- age ponds. The U.S. Department of Agricul- ture, however, noted the rain did not provide any substantial relief because only a few areas received heavy showers, and most of that fell outside of the state's key watersheds. In Southern California's San Bernardino County, intense rainfall Aug. 3 led to the sur- real situation of some people suffering from flood damage during one of the worst droughts in California's history. The water left as quickly as it arrived, and almost none of it could percolate into the area's soil to provide any significant drought relief. The USDA reports nearly 60% of California is now suffering an "exceptional drought," with the remaining parts of the state experi- encing "severe" to "extreme" levels of drought. A report from the University of California, Davis, Center for Watershed Sciences found the current drought is responsible for the greatest loss of water for agriculture on record, with surface water re- duced by one-third. That loss has been offset by groundwater pumping through out the state but mainly in the Central Valley. The report found the total eco- nomic impact to California so far has been $2.2 billion, and nearly 430,000 acres (or 5%) of the state's irrigated cropland is going out of production in the Central Valley, Central Coast and Southern California. The report found California's farmers are weathering the drought, but their reliance on groundwater pumping is not sustainable if drought conditions persist. "California's agri- cultural economy is doing remarkably well, thanks mostly to groundwater reserves," said Jay Lund, co-author of the study and the cen- ter's director. "But we expect substantial local and regional economic and employment im- pacts. We need to treat that groundwater well so it will be there for future droughts." Significant groundwater issues in the Paso Robles AVA and the serious overdraft in the Central Valley underscore calls for comprehen- sive groundwater management in California. The report's other author, Richard Howitt, UC Davis professor emeritus of agricultural and resource economics, described the groundwa- ter situation as a "slow-moving train wreck." In an interview with Wines & Vines, Howitt said the drought has not had the same level of impact on grapes. He said growers mainly from the Tulare Basin have pulled 13,000 to 14,000 acres of vineyards because of reduced surface-water allotments, and because the ex- pected income from that acreage can't cover the cost of buying water. These vines could include table grapes and raisins, he added. tOP StORY Drought Worsens Despite Rare August Rain "We expect substantial local and regional economic and employment impacts." —Jay Lund, Center for Watershed sciences

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