MADELEINE BRAND, host:

From NPR News, this is DAY TO DAY.

It's not even summer and yet more than a third of the country is experiencing drought. And the financial impact is just beginning to be felt. MARKETPLACE's Sam Eaton is here now. And Sam, here in the West we hear a lot of predictions about a permanent drought here. How are things getting worse elsewhere?

SAM EATON: Well, Madeleine, it looks like the drought we're having here in California and Arizona, this record dry spell, is spreading into 11 other states. Here in L.A. we've only had about four inches of rain since last July. The Southeast has had its driest spring since record keeping began back in 1895. And in Minnesota it's in its worst drought in three decades. In the Southwest things continue to get a little stranger. You look at Central California, ranchers are selling off their cattle because there's no grass to graze on. The fire season kicked off early. The wild flowers never bloomed. That's creating some strange encounters in L.A., where more and more wildlife is venturing into neighborhoods with their lush lawns in search of water. Everything from swarms of honeybees to possums and rats. I understand the pest control companies have been flooded with phone calls.

BRAND: Yeah. And I made one of them. There was a coyote in my backyard the other day. How are these areas dealing with the drought?

EATON: Well, so far it hasn't reached what they would call a crisis point as far as dealing with this. But you look at the Southeast, where commercial catfish ponds are drying up and crops are wilting and salt water is threatening to intrude into the municipal wells along the coast there, and it's not looking so good. They need about 50 inches of rain to end the drought there.

Los Angeles, just this week, started urging residents to cut water use by 10 percent. But that the extreme drought conditions and more heat waves are forecast for the summer here, so those restrictions are likely to grow. Many cities, including L.A., are already talking about canceling their Fourth of July fireworks shows. I think the fire departments feel like they're - they'll be busy enough going into the summer fire season.

BRAND: So where does climate change fit in with all of this?

EATON: Well, climate scientists say, at least in the Southwest, it's warming faster than any other part of the continental U.S. And for the Southwest, they say climate change is to blame almost certainly. That's not looking good for the region's long-term water supply. I talked to Mark Udall with the Western Water Assessment, and he says so far water managers aren't doing enough to prepare for these changes.

Mr. MARK UDALL (Western Water Assessment): Water management in the West, and in United States, has really been designed to, one, deal with a static climate, and we now know that that's not going to be true, and the other factor is that water managers like to deal with stable populations.

EATON: And if we know anything, the population in the Southwest is far from stable. It's the fastest growing region in the U.S., despite the lack of water. If there's a silver lining, it's that there's room for efficiency. The average American uses about 200 gallons of water a day.

BRAND: Thank you, Sam. That's Sam Eaton of Public Radio's daily business show MARKETPLACE, and it's produced by American Public Media.

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