The state is in the midst of its third driest year on record.

While much of the country is enjoying a mild summer with growing conditions across most of the Corn Belt described as nearly ideal for row crops, California is in the midst of its third driest year on record. Water loss for agriculture is the greatest ever, demand for rationed water is record high and 428,000 irrigated acres have gone unplanted. A study requested by the California Department of Food and Agriculture released July 15 by the University of California, Davis sheds an alarming light on the crises in the nation’s top agricultural state.

California governor Jerry Brown declared a drought emergency on Jan. 17, which triggered emergency regulations in some areas and allowed additional state actions. The State Water Resources Control Board has since curtailed diversions for various water-right holders, and local, state and federal water projects have reduced water allocations, many to record lows, the study noted. Unfortunately, the effects of water-right curtailments and reduced water releases for agriculture are not always clear.

More than 400,000 acres of cropland is expected to be fallowed in the Central Valley. Because farmers directed their limited water supplies to high-value crops, most of the fallowed area is expected to be feed or annual crops, the study said.

“The net water shortage of 1.6 million acre-feet will cause losses of $810 million in crop revenue and $203 million in dairy and other livestock value, plus additional groundwater pumping costs of $454 million,” the study said. “These direct costs to agriculture total $1.5 billion. The total statewide economic cost of the 2014 drought is $2.2 billion, with total loss of 17,100 seasonal part-time jobs.”

The hardest hit part of the state is the San Joaquin Valley, where about 60% of the fallowed crop land, 70% of the statewide crop revenue losses and most of the dairy losses are likely to occur, the study said. The valley includes several of the state’s leading agricultural producing counties.

“The 2014 drought is responsible for the greatest absolute reduction in water availability for California agriculture ever seen. Surface water availability is expected to be reduced by about one-third,” the study said.

While many think of the central United States as the commodity bread basket of the nation, with Kansas the top hard red winter wheat state, North Dakota the top spring wheat and durum state, Illinois the top soft red winter wheat state (and sometimes soybeans) and Iowa the top corn, hog and egg state (and usually soybeans), California in fact has been the top state in agricultural receipts for years due to the high value of its crops.

California leads the nation in milk production and in more than 75 other crop and livestock categories as well, from artichokes to walnuts. The state produces 99% or more of the nation’s almonds, artichokes, dates, figs, raisins, kiwifruit, olives, clingstone peaches, pistachios, dried plums, pomegranates, sweet rice and walnuts. It also is the top producer of Pima cotton, table and wine grapes, alfalfa hay, lemons, limes, fresh and processing tomatoes, flowers, most vegetables and several other fruits and berries.

California’s gross cash agricultural receipts of $44.7 billion in 2012 (the most recent year for which totals are available) topped all states, with Iowa second at $31.9 billion, then Nebraska at $24.4 billion, Texas at $22.7 billion and Minnesota at $20.5 billion.

While not an advertisement for the golden state, California’s contribution to the United States food supply, especially fresh produce and vegetables and tree nuts, can hardly be understated. It’s also a key exporter of several crops. The state’s warm temperatures have allowed production of crops not possible in most other parts of the country, but the arid climate in much of the state has forced growers to depend on irrigation, with surface water significantly dependent on mountain snow melt, which was mostly lacking this year, or increasingly on well water, which was documented in the new U.C. Davis study.

Rainfall in the San Joaquin Valley averages around 12 inches a year, less than the Sacramento Valley just to the north, which averages near 20 inches, and far less than Iowa at about 35 inches and Illinois near 40 inches. Many stations in the San Joaquin Valley have recorded no rainfall this season.

Surprisingly, perhaps, much of the drought’s impact has not been felt in a significant way outside of California, or even within the state because of heavy use of groundwater, which the study clearly warned should not be overused.

“California’s agricultural economy overall is doing remarkably well, thanks mostly to groundwater reserves,” said Jay Lund, co-author of the study and director of the Center for Waterhshed Sciences. “But we expect substantial local and regional economic and employment impacts. We need to treat that groundwater well so it will be there for future droughts.”

Groundwater pumping is replacing most river water loss, the study found, with some areas doubling pumping from a year ago, with 80% of the pumping in the San Joaquin Valley and the Tulare Basin.

Groundwater’s share of the agricultural water supply in California is expected to rise from about 30% normally to over 50% this year, replacing as much as 75% of the expected 6.6 million acre-foot loss of available surface water.

“Groundwater availability and use is the key to agricultural prosperity in the 2014 drought and future droughts,” the study said.

While California’s San Joaquin Valley clearly is the hardest hit by the drought, other areas in the West also are dealing with water shortages. Topsoil moisture as of July 13 was 57% adequate and 43% short to very short in Idaho, 47% adequate and 53% short to very short in Oregon and 35% adequate and 64% short to very short in Washington, the U.S. Department of Agriculture Northwest Regional Field Office said. Subsoil moisture conditions were slightly better but over 50% short to very short in Oregon and Washington. Farmers were running out of irrigation water due to low reservoirs in Eastern Oregon, which also is in its third year of drought.

The prospects for water availability may not be so good going forward, at least for the next couple of years.

“California agriculture is weathering its worst drought in decades due to groundwater reserves, but the nation’s produce basket may come up dry in the future if it continues to treat those reserves like an unlimited savings account,” authors of the U.C., Davis Center for Watershed Sciences study said.

“Statistically, the drought is likely to continue through 2015 — regardless of El Niño conditions,” the study said, adding that if the drought continues two more years, groundwater (wells) will remain the main substitution for surface water, with pumping capabilities decreasing and costs increasing.

“Additional dry years in 2015 and 2016 would cost Central Valley crop farming an estimated total of $1 billion a year,” the study said.