Shrinking Colorado River will take a toll on the nation's food supply
Published On Dec 29, 2024, 12:54 PM
The Colorado River is critical for 15% of the U.S. agriculture, particularly in the Imperial Valley, which provides a significant portion of the country's winter produce. The river is facing shrinking water levels, which poses a risk to food supply as farmers may struggle to grow enough crops. If no agreement on water usage is reached by 2026, the situation could worsen, affecting food prices and availability across the U.S. Compensations for reduced water usage have not been sufficient to meet the high costs incurred by farmers for water-saving measures.
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The shrinking water supply from the Colorado River is likely to impact agricultural output negatively, especially for winter crops. As a result, food prices may rise and food supply could be restricted, leading to higher volatility in agricultural-related stocks and ETFs.
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