California, one of the most productive agricultural areas in the world and home to almost 40 million people, has been facing a drought for years, and rainfall through this year's wet season has been less than 20% of normal. I'd say something like "out of the frying pan" but they fell out long ago. The article linked above says that there's about one year's worth of water left in reservoirs, and calls for immediate rationing. That would mean, I assume, basically no crop production. I suppose that's good news for farmers in other parts of the world, but very bad for Californians and very bad for us consumers!
Update: the low amount of water is also spurring activity in water markets. Water markets are mostly dormant, but when things get tough, buying and selling water does happen, and I'm not talking about PET bottles! One acre foot is about 2.5 million of those little bottles, and these deals are for over 100,000 acre-feet. While it seems like a no-brainer for rice farmers to sell their water since they can make more money selling the water than they can by using the water to make rice) there are other concerns that the article points out, such as the fact that if too much gets sold, then local infrastructure for processing rice will be unable to function. In the long run, if the water continues to be needed in the urban areas, that's fine; if these are a few lean years, though, then you don't want to give up that infrastructure. We'll learn more later this year about water markets.