Thirsty Crops: How the Global Water Shortage Is Changing the Food Value Chain

Imagine Content
December 21, 2023

Wildfires across Italy and Spain.

Severely reduced water allotments in the Colorado River Basin. 

Scorching temperatures across East Africa.

To say that our planet is facing a water crisis is an understatement. With Europe experiencing its worst drought in 500 years and the Western U.S. in the middle of its driest spell in at least 1,200 years, it seems evident that this reality comes with major implications.

And the effects this crisis has on agriculture are, in a word, concerning.

Agriculture and Water

According to the World Bank, approximately 70% of all global freshwater withdrawals are used for agricultural purposes. So as the soil dries up and the rains fail to fall across many of the world’s most important growing regions, the looming question remains: “What are we to do?”

Massive heat waves are stressing and destroying crops across Europe, and well over half of the Central and Western U.S.—an area responsible for a full seventy percent of the country’s fruit, vegetable, and nut production—is classified as being in a severe drought condition…or worse.

But to make matters worse, this is likely only the beginning. According to one study, 80% of the world’s growing regions will experience even greater water scarcity by 2050.

The Plight of Farmers

The lack of water is taking its toll on specialty crop production:

And the list goes on…

With simply not enough water to grow their crops, farmers are being forced to make impossible, and often heartbreaking, management decisions.

Hundreds of acres of fruit trees are being pulled out of the ground in California, and some families who have operated fruit and vegetable farms for decades are simply going out of business.

Yet the effects go well beyond the farm.

Marketing, Distribution, and Retailing in a World with Less Water

With fruit and vegetable yields and quality on the decline due to water shortages, where does that leave the processors, distributors, and retailers?

In a precarious situation in which innovation and flexibility are crucial.

Product quality: Heat stress in California-grown lettuce varieties is keeping prices high, yet temperature/sun damage is raising concerns about crop quality and quantity. This example, as well as physically smaller and even “misshapen” fruits, suggests that distributing quality, appealing products may remain challenging. 

Shifting growing regions: Climate change and water shortages are also changing the geographical growing regions of some crops. Table grape production is quickly growing in areas of Mexico and Peru once ignored by the industry, and low-chill cherry and blueberry varieties are also opening new growing region options for producers. These changes, primarily driven by the search for water, will likely change distribution patterns and the transportation avenues of many specialty crops.

Taking the Hit: The fact that food prices are inflating is no secret. Yet as agricultural costs have skyrocketed and retail costs have jumped by more than 20% for some products, chilled vegetable retail prices have only increased by a little over 6%. Why? Supermarkets are locked in fierce competition to attract end-users, and that leaves growers, wholesalers, and even the retailers themselves absorbing the costs.

Burden and Hope

It varies from product to product, but in the short term, much of the increased food cost associated with water shortages does end up coming out of the consumer’s wallet. Although, as noted, retailers are pressuring each other to lower margins and share the burden.

But in the long term, is there hope? What is the answer to the world’s water crisis?

Innovation…and we are already on our way.

From drought-resistant seed varieties to drip irrigation technology and even the unique marketing of those “no-so-pretty” fruits and vegetables, agriculture is doing what it does best—adapting.

Significant challenges lie ahead. Price signals must be sent, and innovation must make economic sense to producers, marketers, and consumers.

But necessity…and it is necessary…is the mother of all innovation.

Read it or stream it fresh produce industry insights every week.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.