U.S.: Limoneira Raises 2014 Income Guidance

U.S. lemon and avocado business Limoneira Company (NASDAQ: LMNR) recorded a sharp year-on-year rise in lemon sales in the second quarter, and buoyant prices for the fruit have led to a substantially higher income guidance for 2014.

The company’s lemon sales increased 17% during the period to reach US $18.1 million, and costs were only slightly up by US $700,000 amid acquisitions of Associated Citrus Packers and Lemons 400.

With the much higher sales and only a marginal increase in costs, operating income surged by 35% to US $3.2 million. EBITDA was down 2.3%, but it is important to note the company gained US $3.1 million in the second quarter last year by selling stock in Calavo Growers (NASDAQ: CVGW).

“Based on lemon prices we are currently enjoying, our results for the first six months of fiscal 2014 and our positive outlook for the back half of the year, we are raising our previously issued guidance for the full year results of operations,” said chief executive officer Harold Edwards.

“Importantly, even with the well-publicized drought in California, we continue to believe that our extensive water rights, usage rights and pumping rights will provide us with adequate supplies of water as we begin our seasonally strongest quarter of the year.”

The company said that with higher lemon prices expected, it has pushed up its previous operating income guidance from US $7 million to a range of US $10.6-11.8 million.

Limoneira said this approximately represented a 100% increase over its 2013 operating income of US $5.4 million.

“The expected increase in operating income is primarily due to the additional lemon revenue generated by the acquisitions of Associated and Lemons 400 and increased lemon prices, partially offset by lower expected avocado revenue,” the company said.

“Fiscal year 2014 pre-tax earnings are anticipated to be $11.3 million to $12.4 million compared to previous guidance of approximately $8.1 million, which is similar to fiscal year 2013 pretax income.”

After hours trading was strong for the stock, with shares up 3.54% at the time of writing.

Patrick Cavanaugh2016-05-31T19:35:27-07:00June 10th, 2014|

Housing Market Recovery Helps Timber Producers

Source: Steve Adler; Ag Alert

Home construction in California is on the upswing as the housing sector slowly recovers from the dramatic downturn of the recession that saw home prices and new construction plummet.

Going hand in hand with the increase in home building is the demand for lumber for framing, moldings, doors, fences and other uses. California timber producers say they welcome the increased demand for lumber, but are held back by the regulatory climate in the state that cuts into their bottom line.

As a result of added costs and restrictions on timber harvest, California forestry owners say they have difficulty competing with their counterparts in Washington, Oregon and British Columbia who work in a more business-friendly climate.

An estimated two-thirds of the building materials utilized in California comes from the Pacific Northwest and Canada’s westernmost province.

“Lumber production in California has dramatically fallen off from where we were a couple decades ago,” said Mark Pawlicki, director of corporate affairs for Sierra Pacific Industries in Anderson. “We are harvesting around 1.4 billion board-feet of timber now in California, and that is less than half of what it used to be. A lot of the fallout has been because of the reduction in sales of timber in national forests. It is a combination of regulations involved and a philosophical change within the U.S. Forest Service that occurred back the 1990s.”

Timber owner Peter Bradford of Booneville, who serves as board liaison to the California Farm Bureau Federation Forestry Advisory Committee, said the high cost of regulations “adds a substantial amount” to the price of California timber.

“We are very over-regulated when compared to Washington, Oregon or British Columbia,” Bradford said. “There is a lot of material that comes in from Oregon and Washington because the cost to get a harvest plan to log the trees is easier and much less costly than it is here. It is time, paperwork and cost here in California.”

Despite these challenges, timber owners in California say they are more optimistic than they were a few years ago, when the market for timber had decreased significantly.

“Prices right now aren’t the greatest, but they are better than they were five years ago. For some of the redwood that we are selling this summer, we’ve been given a price of around $900 for 1,000 board-feet. Back in the heyday of the late 1990s, we were receiving $1,500 for that same amount of lumber,” Bradford said.

Pawlicki noted that lumber is a cyclical market.

“As everyone knows, housing construction has been way off in recent years, but it has been gradually coming back. We have seen improvements in U.S. housing construction and along with it improvements in lumber pricing,” he said.

There are currently about 30 lumber mills in California, a decline of 80 mills since the 1990s.

“With the downturn that we experienced in lumber demand, a lot of sawmills closed in California and we are roughly in balance now with supply and demand,” Pawlicki said. “As demand goes up, we expect to see some pricing increases for lumber—not dramatic, but nevertheless steady. And that helps us to maintain our industry here in California.”

Producing more lumber in California to meet the state’s demand, he said, would require “some significant changes in the regulatory world.”

“Folks are not too inclined to build a new sawmill in this state with the regulatory environment that we have,” he said.

Another concern is the tight labor supply, particularly for employees who are experienced in timber harvest and millwork.

“Labor is a tremendous issue in the timber industry right now, trying to get people who are able to do the work,” Bradford said. “This is frequently something you are born into and you know how to do it.”

The labor shortage is felt most acutely in the mills, according to Pawlicki.

“We are experiencing some difficulty filling jobs, particularly millwrights and technical folks in our mills. These mills now are very technical and computerized systems for sawing lumber. It requires a different skill-set than what was required in the past,” he said.

The California drought creates concerns for foresters for several reasons, including increased fire danger and a slowdown in tree growth that corresponds to the lack of water for the trees’ root systems.

“The drought stresses the trees and we will see some tree die-off. We are concerned that we may lose a lot of trees to drought—and when that happens, insect infestations occur and that kills even more trees, and this creates an increased concern for catastrophic wildfires,” Pawlicki said.

Bradford said wildfire concerns also build because of the problems that small landowners face in trying to harvest their timber.

“The amount of environmental review that they have to go through to get a timber harvest permit and the cost to get that review done, with the market value of timber now, makes it economically undesirable. As a result, some of these properties are being sold for home sites. With this increased population comes an increase in the fire danger,” he said.

Bradford said he has seen a buildup in understory in the forests—shrubs, bushes and grasses—that has created dangerous fire conditions.

“That is the worst part of it. The other thing, of course, is that without the normal amount of rainfall, the trees won’t grow as fast as usual. But that is something that is pretty hard to measure,” he said.

Despite the ongoing challenges facing the timber business, Pawlicki noted some positive signs.

“We are optimistic that the market is going to improve domestically. We are seeing some improvements in operating conditions in California, and we are seeing some improvements in the legislative and regulatory front that have helped us,” he said.

Patrick Cavanaugh2016-05-31T19:35:27-07:00June 9th, 2014|

More Evidence of Damage From Drought/ Water Restrictions

The continual trend of water restrictions in regards to the drought on the Central Valley is affecting multiple facets of the Industry, and even exterior businesses as well.

Doug Thiel is the owner and operator of Thiel Air Care, Inc. located in Chowchilla. He provides aerial application service throughout the central Valley. This season, his business is off due to the drought and environmental regulations protecting fish and ducks.

“It’s tremendously slow, with zero water allocations in many areas of Merced County and throughout the West Side of Fresno and Kings County. It is really hindering us. There’s nothing planted, there’s nothing to spray,” said Thiel.

Patrick Cavanaugh2016-05-31T19:35:27-07:00June 6th, 2014|

Water Finally Reaching Growers in Fresno Irrigation District

Source: Dale Yurong; ABC 30

Growers in the Fresno Irrigation District are relieved to see irrigation water finally being delivered to their farms.

In a normal year, farmers would see water delivered for six months in the Fresno Irrigation District. This year, they’re getting a fraction of that but that still beats the zero allocation some growers are getting.

The almonds are developing nicely in Mitch Sangha‘s Fresno County orchard. He has been putting his old well to the test since winter — pumping groundwater because the drought has severely reduced water deliveries. But this past weekend, the water finally flowed as the Fresno Irrigation District began a six-week-long delivery.

“It’s going to help us a lot. Hopefully it will recharge the underground and hopefully we can shut our pumps off and let the water table build back up,” said Sangha.

“It’s a large district. Its 245,000 acres,” said Fresno Irrigation District General Manager Gary Serrato.

He says 4,000 growers now have access to the much needed water.

“The thought is that by starting up in June because there are wells going dry and groundwater tables are dropping that it buys them time as well,” said Serrato.

Sangha says he’ll take whatever water he can get. The constant groundwater pumping impacts homes which rely on the same underground aquifer.

“Our domestic pump on this rental house is only 60 feet so when I turn this pump on that runs out of water,” said Sangha.

“There’s been a lot of pressure on our groundwater this year, and we’ve seen historical drops like we’ve never seen before,” said Serrato.

Sangha says the delivery will help bring his almonds into production and will help raisin growers get through a critical period. Still, some farmers rely solely on the water deliveries and don’t have underground wells to pump groundwater.

Serrato says this is the third driest year on record. Only the droughts of 1976-77 and 1932-33 were worse.

Patrick Cavanaugh2016-05-31T19:35:28-07:00June 5th, 2014|

Food Assistance Available In Counties Hit By California Drought

Source: CBS Sacramento

Families in areas hardest hit by California’s drought are getting some much-needed help as part of the state’s $687 million drought relief bill.

Yolo County is able to put some of that money to use by feeding families in need.

“Most of us here in town, they work on the fields, and they depend on the season,” said Claudia Covorrubias.

But she says this season, the drought is taking its toll, and her husband is out of his usual farm work. It’s a familiar story in Yolo County.

“We need the water,” she said. “If there’s no water, there’s no planting. So if there’s no planting, there’s no food.”

The need was seen by state leaders who set aside $25 million in the recent drought bill to help feed families like hers. The money is being spent on boxes going to food banks from 24 of the hardest hit counties where unemployment and agricultural work is higher than the state average.

COUNTIES AFFECTED: Amado, Butte, Colusa, Fresno, Glenn, Kern, Kings, Lake, Lassen, Madera, Merced, Modoc, Monterey, San Benito, San Joaquin, Santa Cruz, Sierra, Siskiyou, Stanislaus, Sutter, Tehama, Tulare, Yolo, Yuba

The Yolo County Food Bank began handing out more than 5,600 boxes of donations at two locations on Monday.

The boxes include nonperishable, nutritionally balanced food that can last four or five days for a family of four.

Families qualify if the drought has caused them to be unemployed. “It’s all on an honor system,” said Stephanie Sanchez. “We’re really trying to just help out families in need. If they can’t prove it, we don’t want to have to turn them away.”

Emmanuella Eliadiazzamora has a daughter and is expecting another child in less than a month. For her, the help is huge.

Patrick Cavanaugh2016-05-31T19:35:28-07:00June 5th, 2014|

California’s ‘Exceptional Drought’

Long Term Solutions, Desperately Needed For California Drought

By John Vikupitz, president and CEO of Netafim USA in Fresno, California

Aaron Barcellos, a partner with A-Bar Ag Enterprises in Los Banos, is a fourth-generation farmer. His 7,000-acre operation produces crops, including pistachios, pomegranates, asparagus, and tomatoes.

The farm creates jobs for up to 40 people full-time and over 100 at peak season. This year, the operation took an unprecedented move in letting 30 percent of its productive acreage go fallow for lack of water, redirecting available water to permanent crops and to honor tomato contracts. This fallowing of acreage has resulted in a loss of work for over 30 part-time employees and an estimated loss of $10 million to the local business economy from his operation, alone.

“It’s a ‘batten down the hatches’ year,” notes Mr. Barcellos. “We are trying to survive this year while hoping the severity of this drought will provide momentum for more long term solutions to our water crisis.”

California’s ‘exceptional drought’ – said by University of California (UC) Berkeley paleoclimatologist B. Lynn to perhaps be the worst in 500 years – places the state at a critical juncture.

California’s historic low precipitation of 2013 and the below normal 2012 precipitation left most state reservoirs at between six percent storage in the Southern Sierra to 36 percent in Shasta – levels not been seen since the 1977 severe drought. Snowpack is nearly non-existent.

The U.S. Drought Monitor reports nearly half of the U.S. is in some form of drought.

Water is one of life’s greatest conveniences. Turn on the tap and water appears, often at less cost than other household bills, providing the lifeblood for food production, human health, climate, energy and the ecosystem.

We may take water for granted until we’re in danger of losing it as sources dry up. We may not contemplate the support system and cost that brings water to the tap: the extensive pipe conveyance system, treatment plant, chemicals needed for purification, labor and energy costs.

Consequently, every drop saved by one water user benefits all users.

Homeowners may do their part in water conservation by installing low-flow fixtures – often incentivized through government rebate programs – by washing vehicles less or taking shorter showers. The payoff: lower water bills.

The agricultural sector is doing its part, too, using water-saving technology investments that reap returns for Californians, as well as those elsewhere benefitting from its exports. According to the California Department of Food and Agriculture (CDFA), the state produces nearly half of U.S.-grown fruits, vegetables and nuts and leads the world in almond and pistachio production. California’s 80,500 farms and ranches received a record $44.7 billion for their 2012 output. Exports totaled more than $18 billion.

Tens of thousands of productive acres are being fallowed. The number of jobs, specifically those of farmworkers, will subside as food prices increase. California, the nation’s top dairy producer, is shipping cows out of state due to water uncertainties with no guarantee that alfalfa and other crops cows consume will continue to be available.

It’s critical that people appreciate their food source. California’s regulations ensure safe and reliable food, while California’s highly progressive and efficient farmers enable that food source to be the cheapest in the world Mr. Barcellos points out.

Food safety and quality drive those innovations, as well as economics. Regulations mean the cost to produce food and get it to the store requires farmers to be highly efficient to remain competitive.

Mr. Barcellos farms in five different irrigation districts with various water rights and water supplies. A-Bar Ag Enterprises has converted 5,500 acres from flood irrigation to drip irrigation creating a combined water savings and production efficiency of over twenty percent.

“What we do in California with the different irrigation technologies creates significant efficiencies in water application without waste, enabling farmers to increase yields with fewer inputs. With that said, it doesn’t matter what the crop – it still takes water to grow it,” Mr. Barcellos points out.

According to The Center for Irrigation Technology at California State University, Fresno, Agriculture uses 40 percent of all dedicated water, including environmental, municipal and industrial uses in order to meet the needs of the eight million irrigated agricultural acres in California.

When farmers were short on water, they used to purchase it on the open market or pump more ground water. This year, there is no water to buy and wells are starting to run dry, says Mr. Barcellos.

While the federal government has offered temporary food money for farmworkers, “the people in our communities want to work, not receive handouts from a food bank,” Mr. Barcellos says, adding that it’s time to work on long-term solutions to water problems.

California’s water system was developed for 20 million people, with residents and farmers sharing the water supply, with those same resources later shared to meet environmental concerns. That – and the nearly doubled population – has taxed the water system, Mr. Barcellos says.

“We haven’t spent any serious funds to improve California’s infrastructure since the early 1970s to keep pace with population growth and environmental demands,” Mr. Barcellos says. “If the environment needs more water, let’s use sound science and invest in more storage and better conveyance systems for long-term solutions.”

Following Governor Edmund Brown Jr.’s January declaration of a drought emergency, the State Water Project cut water deliveries to all 29 public water agencies to zero for 2014.

Even if there is some short-term relief, mitigation is needed to protect against long-term unpredictable weather patterns.

UC Berkeley’s David Sedlak, professor of civil and environmental engineering, explains: the drought notwithstanding, California’s aged infrastructure calls for increased investments in water recycling, rainwater harvesting and seawater desalination with a focus on local water supply development.

The United States Department of Agricultural (USDA) Natural Resources Conservation Services (NRCS), California indicates three priorities: protecting soils made vulnerable by water cutbacks, protecting drought-impacted rangeland, and stretching every drop of irrigation water using improved hardware and management Farmers and ranchers are encouraged to develop a water conservation plan and seek funding opportunities such as the $30 million available through USDA NRCS California to help drought-impacted farmers and ranchers with conservation practices and the $25 million to help pay for conservation practices through the Environmental Quality Incentives Program.

Irrigation is the final stop on the train that begins with water supply and continues with delivery methods. Water conservation technology – much of which has been proven overseas for decades on arid farmlands – offers a solution right now to apply water more precisely and even improve crop yields and quality.

Our world’s growing population calls for large-scale farming to provide food. For decades, California farmers with reasonable and secure access to water have used water conservation technologies to continue farming and create more water for other purposes, such as the needs of growing urban areas and for environmental remediation, which uses half of California’s water supply.

Farmers like Mr. Barcellos are great stewards of the environment. Many California farmers have successfully adopted this technology to a large degree, using water more efficiently and leaving more in the system for other uses. We need to expand that effort more.

Patrick Cavanaugh2016-05-31T19:35:29-07:00May 31st, 2014|

Stopgap Efforts Aim to Ease Water Shortages

Source: Kate Campbell; Ag Alert

Farmers and water agencies throughout California are turning to the “Three Ts”—water transfers, trades and treated wastewater—as they try to fill some of the supply gaps caused by drought and resulting water shortages.

In farming communities around the state, neighbors are helping each other, for example by running pipes from more productive wells to a neighbor’s farm.

Late-season rains improved the possibility for water transfers among water districts. More regions are delving into making treated municipal wastewater available for irrigation.

“It’s definitely an ‘all-hands-on-deck’ approach to an emergency situation,” California Farm Bureau Federation Water Resources Director Danny Merkley said. “Some of these stopgap efforts may help farmers prevent orchards or vineyards from dying. We have been encouraging state regulators to remove bureaucratic barriers to short-term water supply plans, while keeping ourselves focused on the continuing need for long-term water storage projects.”

In one new initiative, the Sonoma County city of Healdsburg has moved ahead with plans to make 1 million gallons a day of treated wastewater available for vineyard irrigation and construction uses.

Efforts to make the water available began in mid-February, and the first deliveries through two 6,600-foot pipelines began last week. A new, purple hydrant outside the city treatment facility offers free water to farmers who sign up to take supplies by tank truck.

The city estimates the current supply will augment irrigation for about 25,000 acres of vineyards.

Healdsburg Mayor Jim Wood told people gathered to celebrate the treatment plant’s first transfers to tank trucks that gaining the necessary permits for the project “turned out to be a lot harder than we thought.” Wood said officials worked hard to finalize the project “in an amazingly short amount of time.”

The chair of the State Water Resources Control Board, Felicia Marcus, praised the Healdsburg project as an example of local leadership backed up by the work of the regional water board.

“To make recycled water more readily and easily available for other appropriate agricultural and outdoor uses, the state board has proposed a general permit to allow recycled water projects to opt into, or enroll, in a pre-permit program,” Marcus said, adding that the new permit program is scheduled for adoption in the first week of June.

There currently are about 250 water recycling plants operating statewide, with more planned for the future. About half of all treated wastewater produced in the state is used for irrigating crops, with additional projects in the planning stages.

“Water recycling will certainly be part of the solution for California’s long-term water problems, but farmers who use recycled water should not forfeit their existing, long-term water rights,” Farm Bureau’s Merkley said, “and the state’s water portfolio must also include a commitment to build new storage facilities, both above and below ground, to add the flexibility our current water system lacks.”

Water transfers can add short-term flexibility to the system, he added, noting that some transfers appear to be underway this spring to bring partial supplies to certain water-short farming regions.

“People are doing the best they can with the limited water supplies this year, but it won’t be enough for many farmers and rural communities that will still face crop failures, job losses and severe economic hardship,” Merkley said. “This is going to be a tough year for many people in many parts of California. We hope we can avoid such severe water shortages in the future by investing now in new storage plus recycling, desalination and other strategies to move our water system into the 21st century.”

Patrick Cavanaugh2016-05-31T19:35:31-07:00May 22nd, 2014|

Documentary Film “The Fight for Water” premieres May 16 On Demand and at the Film’s Website

The award-winning documentary film, The Fight for Water: A Farm Worker Struggle, which highlights the 2009 Water Crisis as a cautionary tale on the current California drought, is making its way to Video on Demand May 16. It will also be available for viewing through the film’s website at www.thefightforwaterfilm.com.

The film follows two farmers (Joe Del Bosque and George Delgado) and their farmworkers around their drought-stricken lands in order to understand how an environmental decision that took away their water impacted their lands, their way of life and their community.

Recently, Del Bosque was thrown into the national spotlight when President Barack Obama visited his drought-stricken farm to address the current water crisis in California.

Hollywood actor Paul Rodriguez is also featured in the film for his activism. He helped organize a four-day march, in the style of Cesar Chavez, to draw attention to the dire situation that saw over 200,000 people in food lines. Former Governor Arnold Schwarzenegger also makes an appearance on the film.

The film was produced by Juan Carlos Oseguera, 40, a San Francisco State University alumnus who has been a published film critic and an accomplished producer and editor of several award-winning short films.

This is his first feature-length film.

The historical documentary, has screened at over 10 film festivals; winning accolades and worldwide recognition. It received the Best Documentary award at the 2013 International Monarch Film Festival and at the 2013 Viña de Oro Fresno International Film Festival.

The film also received runner-up honors for Best Documentary in Cinematography and for Best Political Documentary Film at the 2013 Action on Film International Film Festival, where it also received a nomination for Excellence in Filmmaking.

“It’s important that we understand that perspective of what the ‘Water Wars’ mean on a really, really human scale,” stated Lois Henry, a newspaper columnist who reviewed the film for The Bakersfield Californian. “People should see this film.”

For more information about the film visit: www.thefightforwaterfilm.com or www.facebook.com/thefightforwaterfilm

For interviews, film review requests or questions about the film, contact Filmunition Productions at filmunition@yahoo.com.

Patrick Cavanaugh2016-05-31T19:35:32-07:00May 15th, 2014|

Friday’s ‘Fight for Water II’ Media Day will Include News Conference on Valley Crisis

Two big fights – one for water and the other in the ring – will be in the spotlight Friday afternoon in Fresno during a media day featuring valley boxer Jose Ramirez and a news conference in which Central California’s rapidly worsening water crisis will be the focus of California Latino Water Coalition leaders and several valley elected officials during a news conference.

The Latino Water Coalition is co-sponsoring the May 17 bout featuring U.S. Olympian Ramirez at Fresno’s Selland Arena as “Fight for Water II,” to help call national attention to the total lack of water supplies now threatening large portions of the San Joaquin Valley’s East Side and West Side. Ramirez is a Coalition member.

The news conference and Fight for Water media event will take place:

Friday, May 2 at 2 p.m.

Thrive Gym — 5161 North Blackstone Avenue

ON BLACKSTONE BETWEEN SHAW AND BARSTOW AVENUES.

“This news conference will include statements by some of our local elected officials whose constituents are most at risk from economic and social disaster this summer because of the zero water allocations still in place over millions of acres along the valley’s West Side and East Side,” said Mario Santoyo, Latino Water Coalition Executive Director. “Don’t be surprised if what these county supervisors and mayors have to say to the federal and state governments is strong. Aside from some drought relief and eased regulations, there really hasn’t been much movement toward getting growers at least some supply to keep permanent plantings alive. The bottom line is we still have no water, trees and vines are about to start dying and valley people – particularly Latinos – will be hurting.”

Among the confirmed speakers are Fresno County Supervisors Phil Larson and Judy Case McNairy. They represent portions of western Fresno County and along the county’s East Side that would be hardest hit by a zero allocation.

Mayor Gabriel Jiminez of Orange Cove, an East Side community in the heart of an incredibly productive citrus region that has very little groundwater to cushion the total lack of Central Valley Project surface water supplies, will discuss his community’s worsening dilemma.

The City of Orange Cove itself relies totally on Friant-Kern Canal deliveries for municipal supplies and is going to have make do with a much reduced emergency supply of health and safety water arranged by the Bureau of Reclamation and Fresno Irrigation District.

While the prospect of massive economic losses and social problems caused by a lack of water is confronting Orange Cove and the East Side, such difficulties are much too familiar to Mendota Mayor Robert Silva.

He will speak on how Mendota is grimly preparing for another year of extreme water curtailments in the CVP’s nearby San Luis Unit, including the Westlands Water District. Unemployment is growing rapidly, fields are being fallowed and businesses and residents are struggling financially.

Also speaking will be Kings County Supervisor Richard Valle, San Joaquin Mayor Amarpreet Dhaliwal (who chairs the Council of Fresno County Governments), Clovis Councilman Jose Flores and other local leaders.

Cannon Michael, who farms east of Los Banos, will represent the San Joaquin River Exchange Contractors. A representative of California Citrus Mutual will explain the problems being faced by citrus growers along the East Side.

Patrick Cavanaugh2016-05-31T19:37:59-07:00May 1st, 2014|

California Drought Hurts More Than the Ag Industry

Source: Shan Li; Los Angeles Times

The California drought could dampen employment growth in coming years and have a ripple effect on several industries in the state, according to a UCLA report released Wednesday.

Economists said in the quarterly forecast that arid conditions in 2013, the driest year on record for the Golden State, could diminish the fishing and manufacturing sectors in the state. However, the effect depends on whether the drought is “normal” or the beginning of “a long arid period.”

California’s employment could be suppressed about 0.2% during the next few years because of the drought, the report concluded.

“If the drought is like the ones we had before, which are plentiful in California, then the data suggests it’s not a big deal economically,” said Edward Leamer, director of the UCLA forecast. “If this is really a climate change, that is a different story.”

Even without the weather factor, Los Angeles, among other cities, is grappling with major problems with its job market.

Among problems plaguing cities: the high cost of housing, congestion, lack of skilled workers and an unfriendly environment for businesses, said William Yu, an economist at the UCLA Anderson Forecast.

“It should not be surprising that a business is less likely to start up, relocate or expand its business in a city who is business unfriendly, especially when there are many other business-friendly cities from which to choose,” Yu wrote in the report.

Over the next year, however, UCLA economists do expect the state’s economy to continue growing.

The current drought in California not only affects the agriculture industry, but California as a whole. Individuals should take the initiative to conserve water during this tumultuous time.

Patrick Cavanaugh2016-05-31T19:38:05-07:00April 2nd, 2014|