Dreams were made and lost in the 1840s by prospectors looking to make it big in the California Gold Rush. Today, people there prospect for a liquid gold that’s even more valuable. It’s water, and the lack of it is slowly strangling agriculture in the state.
The U.S. Drought Monitor shows the state has suffered from drought conditions for five years. But that’s only part of the story, says Steve Runyan, a farm and rural real estate appraiser based in Bakersfield. The other parts of the story have to do with water use and distribution problems.
Runyan addressed California’s water woes during the annual meeting of the American Society of Farm Managers and Rural Appraisers (ASFMRA), earlier this month, in Indian Wells, Calif. He says a big issue is there’s water in the northern half of the state, while a large portion of production agriculture is in the southern half.
He explains the snow melt from the Sierra Nevada mountain range each spring flows into rivers, streams and reservoirs. A good portion of the runoff also winds up in the Pacific Ocean. Many farmers would like to see more of the water captured and used for crop production. But an aging infrastructure, long-held water rights and political red tape (not to mention push-back from environmentalists with their own agendas) are preventing that.
For now, many farmers in the Golden State are staying in business by pumping groundwater to keep their fruit, nut and vegetable crops alive. But that can’t continue forever. Without intervention from government agencies, the long-term future for farming looks bleak in California--currently the No. 1 agricultural state in the U.S. and the fifth-largest agricultural producer in the world.
As goes California. If what’s happening in California doesn’t worry you, it should, says Matt Marschall, senior vice president for CBRE, Inc., a real estate firm in San Diego. He says the state’s water issues are germane to the rest of the country.
Other individuals and organizations hold similar views. In April 2015 the U.S. Government Accountability Office (GAO) reported that “40 out of 50 states have at least one region that’s expected to face some kind of water shortage in the next 10 years.”
Specific to California, Marschall says the cost of production in parts of the state have become so high that he anticipates some vegetable and fruit crops grown there will soon be produced in the Midwest.
That’s already happening in Michigan, according to Mark Williams, ARA, and president of the real-estate firm Value Midwest, Marlette, Mich. Williams says some of his farmer clients say the soil quality, water supplies and lower costs—relative to California—make Michigan an ideal state to pick up additional acres of fruits and vegetables.
“We have several areas with muck soils that are a great fit for cucumbers, tomatoes and celery,” he says, for example.
At first blush, some producers and retailers in the Midwest might expect to simply profit from California’s misfortunes. But Williams’ perspective is that the regulations California is experiencing—not to mention its water woes--are likely to reach the rest of the U.S. as well.
“We’re all under more scrutiny these days and dealing with intense regulations that are increasing,” Williams says.
His advice to members of the agricultural community is to head off regulations or minimize their impact by being proactive. “Get in-tune with what’s going on and how it can impact your livelihood; express concerns to the proper agencies and your congressman.”
Some appraisers and farm managers at the ASFMRA meeting said their hope is President-elect Trump will repeal or ease current water regulations, such as the Clean Water Rule’s Waters of the U.S. Whether he rolls back any regulation remains to be seen. What is certain is water will only become more precious in the future. Benjamin Franklin already understood that fact back in the 1770s. He said, “When the well is dry we know the worth of water.”