Putting The California Drought In Perspective And What That Might Mean For The Entire Country | Exploring Markets

Putting The California Drought In Perspective And What That Might Mean For The Entire Country

Have you heard about the drought in California?

It's getting quite serious. It started in 2013 and looks poised to continue throughout 2014.

We recently stumbled across these alarming facts while reading a brochure about it the other day:

  1. In 2013, there were only 7 inches of rain in California. The average is 22 inches.
  2. Government officials are so worried about the drought, many of them trying to pass a plan that would cost anywhere from $25 billion to $67 billion to build two underground tunnels specifically designed to transport water between Northern and Southern California.
  3. 2013 was the driest year for California since the state began measuring in 1849. One scientist said that California probably hasn't been this dry for more than 500 years. 
  4. Agriculture in California is worth an estimated $45 billion. It accounts for 15% of all crop sales in the U.S., too. If farmers can't produce crops or maintain them in such dry weather, it will impact the entire country sending food prices higher. 
  5. 20 large communities in California are already estimated to run out of water in a matter of months.
  6. Wildfires have been, maybe, the most dangerous they've been in the state's history. In January, 2014 state officials responded to more than 400 wildfires. In 2013, there were 0 wildfires in January. And the historic average is roughly 70. 
  7. Ranchers, farmers, and agriculturists are having to make early decisions in maintaining their farm. Some are selling their livestock as fast as they can in fears they won't be able to maintain it. Others are trying to buy as much hay as possible to feed their livestock throughout the year. Decisions like this could start having a massive impact on commodity markets. 
  8. Water reservoirs around the state are hitting their lowest levels in history. Just look at this image: