California Drought: How Does the California Drought Affect Non-Agricultural Business

Posted by AMS / Thursday, July 16, 2015

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DroughtThe California drought is all over the news, and people around the world are concerned, with those in the USA deeply concerned. California is a major agricultural producer for the nation, so when people see images of dried up reservoirs and read news reports about how Californians are dealing with water restrictions, they’re interested.

Readers also want to know how non-agricultural businesses are impacted by the drought. Is it affecting business with higher prices or other pressures? How is it affecting the employees? Are there worries about no water? Are California citizens thinking about solutions and adaptations, and if so, what solutions are they moving to, and will these solutions affect business?

One of the many California industries not dependent upon water availability is fulfillment. AMS Fulfillment is a large company that warehouses and ships products around the world. AMS is located in the Los Angeles area, which is logistically perfect, having close proximity to the Port of Los Angeles and the Port of Long Beach. Tthis is a benefit to clients, to the ports, and to the California economy.

AMS is in the perfect location, we don’t depend upon water to do business, and we wouldn’t want to relocate out of California, so are we affected by the drought in any way? For answers, we talked to Jay Catlin, President of AMS.

Jay first expressed the concern he shares with others about what’s going on with regard to dwindling water resources. “The drought is something every Californian needs to take seriously. While people might be concerned about restrictions on water usage, or higher prices for water, it seems we really haven’t started to take it personally, or at least the awareness is not widespread,” he said.

“I do take it personally, my family does, and AMS Fulfillment does. And we notice some changes in public awareness, which are encouraging,” Catlin said. “We’re seeing more homeowners and businesses moving to synthetic lawns, and others are changing to semi-desert landscaping. The synthetic lawns are very realistic, and a perfect solution for those who enjoy the aesthetic appearance of a green lawn, or appreciate a lawn as a play area for their children.”

Catlin went on to talk about how he expects real growth in the businesses that manufacture and provide synthetic landscaping of all types. “We’d love to do the fulfillment for these manufacturers, as they are prospering, and will continue to do so,” he said.

California’s drought is now in its fourth year, and the economic impact on the agricultural sector indicates more than two billion dollars lost, and 17,000 seasonal jobs. In addition to agriculture, the businesses hardest hit by the drought are food processing, semiconductors, energy (hydroelectric power), tourism and leisure, and water utilities.

“It is hard to assess these stresses in relation to how they affect all California businesses,” Catlin said, “but the impact on the fulfillment industry, which is international in its scope, is very minimal. We’re grateful for that, and grateful that we can add to the California economy and employ as many people as we do.”

Catlin went on to say that the company and its employees do face water restrictions and higher prices for water, but these things are taken in stride. He’s aware that long-term changes in water usage could affect the price of food, and if consumers become concerned for the future it could affect consumer purchases. For this reason he would like to see care for the environment a part of everyday life, as it always has been for AMS in its focus on conservation and ‘green’ living.

It’s not expected that the drought will have a significant impact on statewide economic activity, or that it will significantly affect state and local tax revenues, but it is changing agriculture. Farmers will fallow more fields, and switch to crops that require less water, so if a community economy is concentrated in one particular aspect of agriculture, it could be severely affected. That is where experts expect the greatest impact… in local economies and food-related manufacturing.

All in all, the impact on California-based businesses is small, and the people are well able to handle the changes that they are experiencing. “But we can do better,” Catlin said. “We can always do more to protect and care for the world we’re living in.”

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