Policy Brief: The Financial Viability and Broader Benefits of SGMA-Ready Crops

SGMA is reshaping farming in the San Joaquin Valley

California's San Joaquin Valley, one of the most productive agricultural regions in the world, accounts for about 60 percent of the state's farm economy and produces a large share of the nation's fruits, nuts, and vegetables. The valley's abundant sunshine and rich soils support a wide range of crops, but farming depends on irrigation water that has become increasingly unreliable.

The Sustainable Groundwater Management Act (SGMA), enacted in 2014, requires overdrafted groundwater basins to reach long-term balance by the early 2040s. Consequently, less land is likely to be irrigated across the valley, with 10 to 20 percent of farmland, or 500,000 to 900,000 acres, potentially coming out of production. But the scale, location, and consequences of land retirement for the valley's economy and communities depend on how farmers adapt.

Left unmanaged, these idle lands often generate weeds that spread to nearby planted fields and dust that poses health risks for rural communities. Fallowed farmland can support solar development, groundwater recharge, and habitat restoration, but these options will not suit every landowner or community. Farmers in areas where significant cuts to water use are required may adapt by growing a SGMA-ready crop-one that uses minimal irrigation water and other inputs, offers positive returns in wet years and limited losses in dry years, and provides benefits such as improved soil health, dust suppression, and the potential for groundwater recharge. This policy brief examines where growing such a crop makes economic sense and how government programs can support its adoption.

Growing winter forage offers an alternative to fallowing

As groundwater cutbacks take effect under SGMA, the acreage of summer forage crops (which are used to feed livestock) is likely to decline in areas that rely heavily on groundwater. Currently, forage crops like alfalfa and corn are second only to perennials by acreage-up to 700,000 acres, about 15 percent of the valley's irrigated land. Many dairies source feed from nearby forage growers, and beef producers add to this demand at a smaller scale. These crops are thirsty: alfalfa requires 3.5 to 5 acre-feet a year and corn needs 3 to 4.5 acre-feet.

Valley farmers have a long history of growing small grain winter crops that require less water-including wheat, barley, rye, and triticale-for both forage and grain. While acreage can vary significantly, in recent years growers have planted a little over 100,000 acres of wheat annually-well below historic levels, which often exceeded 300,000 acres. Winter forages offer a low-water alternative to summer crops:

• Winter forages can be grown with as little as 4 inches of supplemental irrigation, according to PPIC and University of California research.
• Winter forages are grown in cooler, wetter months when evaporation is low and rainfall can help meet their water needs. Flexible harvest timing can help farmers adjust to uncertain water supplies.
• Winter forage, when managed appropriately, uses little more water than fallow land, which loses significant amounts to evaporation.

Many farmers adapting to SGMA may need to choose between growing a managed winter crop on fields that are fallow in the summer or no crop at all. Even modest positive returns may be an improvement over leaving lands idle. How much farmers can earn depends on the amount and timing of rainfall, water available for irrigation, and forage prices, among other factors.

Winter forages could be a viable SGMA-ready crop . . .

A number of factors suggest that winter forages could make economic sense in the valley.

• The valley's roughly 1.5 million cattle-about 90 percent of them living on dairies-depend heavily on locally grown forage.
• As summer forage acreage declines, dairies may face higher costs from purchasing forage that is shipped into the region. Supplies from elsewhere in the West face their own water constraints, potentially driving up prices and contributing to herd reductions.
• Winter forage stored as dry hay can be fed to livestock through the summer, partly reducing the need for locally grown summer forage.
• Growers may tap additional markets among producers of beef cattle and dry (non-lactating) dairy cows that have more flexible diets and can incorporate more small grain forage.

. . . where conditions are right

Water-limited winter forage cultivation is not viable everywhere in the valley. While it is often economical for dairies to buy grains and alfalfa from out of state, wet forages like corn and small grain silage are too low in value (relative to their weight) to ship far. Dairy farmers predominantly feed cattle with alfalfa and corn silage, which are highly nutritious and precisely calibrated to current feed rations; using higher proportions of small grain forages for milking cows may require technical support. Dairies currently have high demand for feed, especially in spring and early summer before corn silage is available. Winter forage growers located near dairies will find a readily accessible market for their crops.

Cropland within 25 miles of dairies-excluding lands planted with valuable, long-lived perennial crops such as almonds, pistachios, and grapes-is the strongest potential location for winter forage production. The figure below shows the population of dairy cows within 25 miles of annual cropland. Tulare and Kings Counties, where dairies are large and concentrated, have the greatest potential demand.