(Fortune) - The drought in California is heading into its fourth year with no end in sight. The situation has gotten so bad, experts say it’s the area’s worst drought in 1,200 years.

The drought in California is heading into its fourth year with no end in sight. The situation has gotten so bad, experts say it’s the area’s worst drought in 1,200 years.

Even President Obama gave reference to drought conditions in his recent State of the Union Speech.

Winter months have dumped much needed rainfall in the state, but 98 percent of California remains in drought, with 32 percent in extreme drought conditions. And it would take a whole lot of rain to ease the pain. It’s estimated that California would need some 11 trillion gallons of water to eliminate the drought conditions.

As surface and groundwater supplies dry up, the lack of rainfall is taking an economic toll. Last year, more than 99 percent of California’s $43 billion agricultural sectorexperienced severe, extreme, or exceptional drought.

That translated into costing the state’s agriculture sector around $1.5 billion in losses from unplowed fields, dead livestock, worker layoffs, and rising costs of water.

While December and January’s rainfall brought some hope, the outlook remains bleak, said Scott Rawlins, director of regulatory and government affairs at Wilbur-Ellis, a distributor and marketer of agriculture products.

“Going into 2015 I think things are better because of the recent rains, but we’re a long way from being out of the woods on the drought,” Rawlins said.

“We had half a million acres of unplanted crops because of the drought, and with California producing so much of the nation’s fruits and vegetables, I think we’ll face shortages of those products,” Rawlins explained.

Where are the higher prices?

California farmers produce half of the nation’s fruits and vegetables, and most of its high-value crops such as broccoli, tomatoes and artichokes. So it would seem logical that as the drought bakes the Golden State, food prices would naturally rise as hundreds of thousands of farm acres lay fallow.

But imports of fruits and vegetables along with the nation’s agriculture industry have helped American consumers mostly dodge the higher food prices, said James Booker, professor and department chairperson of economics at Siena College.

“The U.S. is a geographically diverse nation, with different producing regions frequently experiencing very different weather conditions,” Booker explained. “Coupled with our food supply being increasingly globalized, these two factors continue to work to limit impacts of weather and rainfall on total food production and costs.”

“Food inflation was around historical averages for 2014, coming in at 2.25 percent to 3.25 percent,” said Umar Sheikh, a food industry expert from Euler Hermes, a provider of trade credit insurance.

“Some specific items, such as beef and pork, saw considerably higher prices, though that was largely due to disease in pigs in other parts of the country and a very low cattle population across the nation,” Sheikh added.

However, the global interplay of agriculture works both ways. A study from Canada’s province of British Columbiasaid the drought in California could have pushed up prices of fruits and vegetables there by 34 percent by the end of 2014 due to lower supplies imported from the state.