California Drought: Ag Industry ‘Resilient’

Despite the severe drought, the economic impacts on California's agriculture industry so far, are relatively small. 

More than 500,000 acres of California agricultural land was fallowed last year. But there wasn't a significant falloff in Central Valley employment because much of the land wasn't labor-intensive. 

"We haven't seen significant decline in jobs in 2014, some decline in production but in the grand scheme, in the overall scheme of the valley economy, agriculture has been fairly resilient," said Jeff Michael, Director of the Center for Business and Policy Research at University of the Pacific in Stockton.

Michael says much of the land taken out of production in 2014 was low value field crops. 

"Some of the changes in the market and the shift towards higher value crops and high crop prices have been in a positive direction and have helped offset some of the impacts of the drought,” said Michael. 

With California in the fourth year of drought, more crop land is expected to be taken out of production this year. 

Michael said farm profits may be lower and operating costs may rise, but so far in 2015, the agriculture industry is weathering the drought.

The Center issued its economic forecast for California and metro areas in the state May 29.