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Global AgInvesting reports:

The ongoing drought in California is not relenting - taking 30% more agricultural acres and workers out of production this year than it did in 2014, according to the latest drought impact report issued by the University of California, Davis Center for Watershed Sciences.

In 2015, the state of California's agricultural economy will lose $1.84 billion and 10,100 jobs, with the Central Valley being hit the hardest.

But thanks to the state's enormous, but dwindling groundwater reserves, which have been able to offset approximately 70% of the surface water shortage this year, the agricultural industry remains productive, with strong global prices for fruit and nuts, shifts in growing regions, and intrastate water transfers supporting the industry.

The heavy reliance on groundwater, which is forcing farmers to drill more wells and pump at deeper levels, is creating an increasing cost to farmers, with pumping greatly exceeding replenishment rates, dangerously diminishing reserves and causing water quality issues.

The total impact of the drought on all sectors of the state's economy will be $2.74 billion for 2015, compared to $2.2 billion in 2014 as the surface water shortage reaches 8.7 million acre feet.

This shortage will be offset by increased groundwater pumping of six million acre feet, leaving a net water shortage of 2.7 million acre feet - leading to the fallowing of 542,000 acres - 114,000 more than the 2014 estimate.

If the drought continues through 2017, the effects will likely worsen by 6% over 2015 levels, with net water shortages of 2.9 million acre feet per year, with groundwater level losses and associated costs increasing.

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