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Not Enough Rain for California Agriculture

By Jean-Paul McDonald, Farms.com

Despite torrential downpours across most of California last week, the state’s agriculture sector is still suffering the effects of a lingering drought.

With more than 94% of the state still struggling with severe drought, farmers and ranchers continue to deal with the realities of failing crops and reduced viable pasture lands. With exceptionally high costs for irrigation water, farmers and ranchers are having a hard time keeping within profitable margins – in some cases, the drought has forced them completely out of business.

While the recent rains did help by providing some moisture, the dry land causes much of the water to runoff quickly, offering little chance for adequate absorption. With reservoirs and snowpack levels also being so low, the rains didn’t have enough impact to revive them to suitable levels.

(dying avocado tree in California as the result of drought)

Consumers can expect the prices of some of their favorite California-grown fruits and vegetables like avocados to increase, as supply weakens and production costs get steeper.


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The 12-day war between Iran-Israel came to an end sending crude oil futures plunging as the big fund speculators removed the war risk premium.

The weather risk premium in the Ag complex is sending corn, wheat and soybean futures lower on month-end selling ahead of the market moving USDA quarterly grain stocks and acreage reports on June 30th.

Instead, funds were chasing and sending tech stocks higher with the S&P 500/NASDAQ indexes setting new all-time record highs!

June 1 USDA Hogs and pigs report was slightly bearish while the U.S. $ Index traded to new contract lows as the de-dollarization that began in 2014 continues.

Feed in the form of soybean meal futures for livestock producers got cheaper, trading to new contract lows.

The Stats Canada seeded acreage update was bullish canola and wheat.