South Tahoe businesses face impacts of drought
May 23, 2014
The California drought, an event expected to cost the Central Valley's agriculture industry $1.7 billion and cause thousands of workers to lose their jobs, is being felt in the South Shore as businesses raise their prices or plan to face the eventuality of higher costs.
Dry weather conditions have caused prices to spike in some of the state's meat and produce industries, prompting some local businesses to raise their prices for the first time in years.
"We tried to hold off on it," said Taqueria Jalisco owner Manuel Zepeda, of raising some prices at his South Lake Tahoe restaurant, "until the California drought happened."
Agriculture, a $42.6 billion industry in California, generates at least $100 billion in related economic activity with 80,500 farms and ranches, according to the California Department of Food and Agriculture.
As a result of the dryer conditions, Zepeda said vegetable prices have gone up about 20 percent in the past few months. That includes ingredients often found in his restaurant's menu items, such as tomatoes, avocados and lettuce.
Limes became especially expensive this year, with prices shooting up from $20 a case to $165 a case, Zepeda said.
"I did stop buying limes for awhile and bought lemons instead," he said, adding that the restaurant is back to buying limes again.
The cost of a case of limes has since gone down from its $165 price tag, but Zepeda said it's still more than double what he was paying before the drought. Meanwhile, the cost of meat went up 30 percent over the past few months.
Fortunately, prices at Zepeda's restaurant have been lower than the average market for years, he said, so the small adjustment still keeps prices competitive.
"My priority is my customers," he said. "I look after my local people."
A study recently released by the UC Davis Center for Watershed Sciences outlined economic impact estimates in the Central Valley this year and showed farmers having 32.5 percent less water heading into the growing season.
Additionally, 410,000 acres of Central Valley land is expected to be fallow, according to the study.
Jon McElroy, owner of Grass Roots Natural Foods, said he's been keeping an eye on the situation.
"We haven't seen a huge impact yet," he said, "although it seems to be coming down the pipe."
Grass Roots only sells organic produce, so McElroy isn't sure how the hit to the ag industry will impact organic growers.
But he has an idea.
"I think in general all the prices are going to go up," he said, referring to California growers.
When that happens, the natural foods store will try to absorb any price hikes as much as possible for its customers, McElroy said.
"We'll go item to item and see what we can absorb and what we can't," he said.
But until then, it's just wait and see.
"We are aware of the situation," McElroy said, "and it's going to suck when it happens."