California farmers shore up for El Nino

"The water issues are far from over," said one Central Valley farmer

California's drought drama and how we got here
California's drought drama and how we got here   

In the San Joaquin Valley in California — where more than a third of America's vegetables, and two-thirds of the nation's fruits and nuts are produced — temperatures are roughly in the 40s. The monthslong citrus harvest continues, and farmers are tucking young almond tree plantings into the ground. And during these tasks that make up farming, there are moments to look to the horizon and hope. There's snow topping the Sierra Nevadas.

After four consecutive drought years, farmers are hoping and betting their livelihoods that the snowpack along the 400-mile-long Sierras, from north to south, will accumulate. Then in the spring, the snowpack will melt and trickle down to fill surface water reservoirs and hopefully bring down soaring water prices.

But there's also worry a naturally occurring weather pattern known as El Nino will bring fast and furious precipitation. Acres of land have been left idle in the drought, making that barren land susceptible to flooding, mudslides and erosion. "A strong El Nino is expected to gradually weaken through spring 2016," according to an update released Thursday from the National Weather Service's Climate Prediction Center.

Jesus Ramos, citrus farmer in Tulare County, Calif.
Qin Chen | CNBC
Jesus Ramos, citrus farmer in Tulare County, Calif.

"We haven't really experienced the full effect of El Nino just yet, but so far it's not near as dry as it was a year ago," said Jesus Ramos, a farmer who owns 140 acres of mostly citrus trees in Terra Bella in Tulare County. "And there's snow on the mountains," he said. "It's nice and bright."

Further north in Madera County, third-generation farmer Tom Rogers has planted some new almond trees on his 175-acre almond farm. Almond tree blooms should be popping in about four weeks. "You can see the buds move," he said.

Both Rogers and Ramos are taking reasonable precautions. They're doing things like making sure drains and creeks are cleaned and open. "I'm cautiously optimistic," Rogers said.

Read MoreSevere El Nino puts world in 'uncharted territory': UN

But in other agricultural pockets of the U.S., El Nino has already created damage, including bloated waterways that are impeding transportation of food. "Swelled major waterways across the nation have slowed the movement of barges, which are an important channel for the distribution of agricultural goods," according to an El Nino economic report from IHS Global Insight, released this week.

The net effect of El Nino typically is small but positive. The economic benefits of the 1997–98 El Nino event — the most severe to date — were about 0.2 to 0.5 percent of GDP. IHS Global Insight expects impacts on the same order of magnitude during the 2015–16 El Nino.

El Nino rains down on business
El Nino rains down on business   

The current El Nino is expected to affect temperature and precipitation patterns across the U.S. during the upcoming months. There's an "increased likelihood of above-median precipitation across the southern tier of the United States, and below-median precipitation over the northern tier of the United States," according to the National Weather Service.

One of the reasons heavy rainfall can actually damage crops, the land and infrastructure is absorption rates. "The land has been so dry for so long, it's almost impermeable," said Mary Simms, a spokeswoman for the Federal Emergency Management Agency. Excessive, dry land can "act like concrete" despite precipitation, she explained.

"So far the rain has been coming slowly and absorbing," said almond farmer Rogers.

Given this El Nino is expected to be among the biggest, according to forecasters, FEMA established a new El Nino-specific task force last August to encourage preparedness among industries, business owners and residents.

About 28,000 new flood insurance policies were purchased by California residents from the end of August to the end of November last year, according to FEMA, a 12 percent increase.

Read MoreEl Nino floods keep roofers, insurers busy

'Uncharted territory'

Vehicles move on a flooded road in Van Nuys, Calif., Jan. 5, 2016 amid a wave of El Nino storms that hit Southern California.
Gene Blevins | Reuters
Vehicles move on a flooded road in Van Nuys, Calif., Jan. 5, 2016 amid a wave of El Nino storms that hit Southern California.

As El Nino rolls out, the effects could be widespread and touch many sectors. Unseasonably warm or wet weather can influence consumer spending such as higher retail sales as families go outside to shop. New home construction could be volatile in 2016 as builders place bets on which U.S. regions will have a milder winter, according to IHS research.

But El Nino's major devastation could be related to crop production and global food security.

"The strength of the current El Nino has put our world into uncharted territory," said Stephen O'Brien, U.N. under-secretary-general for the coordination of humanitarian affairs. "The impacts, especially on food security, may last as long as two years," said O'Brien in prepared remarks on Jan. 7.

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California, meanwhile, as the nation's largest agricultural producer and exporter, is bracing for El Nino. The 2015 drought alone was forecast to cost about $900 million in gross crop revenue losses, and 10,100 direct seasonal job losses, according to an August 2015 report on the drought and California agriculture from the University of California at Davis.

"We cannot live with it being dry all the time," said citrus farmer Ramos. Amid the prolonged drought, his total water bill for his ranches has soared to more than $200,000, compared to roughly $17,000 just a few years ago. Added Ramos, "The water issues are far from over."