Central Valley businesses see effect from drought

The California Ag industry is poised to take a hit from the ongoing drought, and some Central Valley businesses are already seeing an effect.
February 24, 2014 12:00:00 AM PST
The California Ag industry is poised to take a hit from the ongoing drought, and some Central Valley businesses are already seeing an effect.

Custom Ag Formulators in Fresno is in the business of making fertilizer sprays for farms, locally and abroad. General Manager Patrick Murray says after three dry years, they are seeing a slowdown in local demand for their product.

"A lot of people are not wanting to, what we call, pull the trigger," Murray said. "They don't want to do a spray yet, unless they absolutely have to, not knowing what they're going to be planting."

More fallow fields are popping up. The Fresno County Farm Bureau projects almost 400 square miles will remain unplanted in the Central Valley this year -- fields that once needed fertilizers.

So far, Murray says their bottom line hasn't taken a hit due to strong sales overseas. However, he expects to see a 10- to 15-percent loss in business in the upcoming year, depending on how bad the drought gets.

But not all businesses are taking a hit. Larry Rompal of Agri-Valley Irrigation says their workload and sales are increasing, with customers wanting more water-conscious irrigation systems. He says the company saw more than a 10-percent growth last year, and expects it to continue through 2014.

"It's on the upswing," Rompal said. "We're adding people, we need more installers."

But Rompal says while business is good for now, he worries when he looks ahead in the future and more and more fields could remain bone dry. The California Farm Water Coalition says 40 percent of Central Valley jobs are tied to agriculture, and $2.8 billion worth of statewide Ag wages are at risk of drying up.

"It's looking grim for everybody involved in Ag," Murray said. "All the companies that supply us, everything from pallets to basic fertilizers to paper and labels, when we cut back they cut back, so the trickle down is going to be dramatic this year.


Load Comments