The severe drought in California is threatening more than $800 million in crop revenue as water needed for farming is at record lows, according to a report.

River water supplies for farms in California’s fertile Central Valley are down by about one-third, according to a report from University of California, Davis. Surface water is being replaced by pumped groundwater, a practice that may bring steeper crop losses in the future if the drought persists.

“We need to treat that groundwater well so it will be there for future droughts,” Jay Lund, a co-author of the study and director of the university’s Center for Watershed Sciences, said in the statement.

The entire state was in severe to exceptional drought as of July 8, according to the U.S. Department of Agriculture. Dry conditions are expected to cost California about $2.2 billion this year, including about $1.5 billion in lost revenue and water-pumping costs tied to agriculture, according to the report.

The Central Valley is projected to lose about $810 million in crop revenue. About 428,000 acres or 5 percent of irrigated cropland will go out of production in the Central Valley, Central Coast and Southern California due to the drought.

Groundwater Key

Groundwater, a key to the state’s agriculture industry, may replace as much as 75 percent or five million acre-feet of the roughly 6.6 million acre-foot loss of surface water, according to the report. That would raise the share of groundwater used for farming from 31 percent to 53 percent.

Failure to replenish groundwater in wet years will lessen its ability to sustain crops during the state’s frequent droughts.

“We have to do a better job of managing groundwater basins to secure the future of agriculture in California,” Karen Ross, secretary of the California Department of Food and Agriculture, said in a statement.

California produces about half of all fruit, nuts and vegetables grown in the U.S., and approximately one-fourth of the nation’s milk and cream, according to the report.