River water supplies in California's Central Valley are down by 33 percent, and surface water use is being replaced by pumped groundwater, which will have affect future crops if the drought persists, according to the report.
The report also says 428,000 acres of irrigated cropland in Central Valley, Central Coast and southern California will be out of use due to the persistent drought.
"We need to treat that groundwater well so it will be there for future droughts," said Jay Lund, co-author of the study and director of the university's Center for Watershed Sciences.
The study by the Center for Watershed Sciences shows that groundwater could replace as much as 75 percent of the roughly 6.6 million acre-feet of lost surface water, taking the state's usage of groundwater from 31 percent to 53 percent.
Excessive use of groundwater will affect the water table, which could be worrisome considering drought-like conditions are expected to continue well into 2015.
Failure to manage groundwater and plan for future dry spells will be a "slow-moving train wreck," said Richard Howitt, a professor emeritus of agricultural and resource economics at UC Davis.
"California's economy runs on energy, information and water, and we need to get by with one-third less water than normal," said Howitt. "We're acting like the super rich who have so much money they don't need to balance their checkbook."
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.
"We have to do a better job of managing groundwater basins to secure the future of agriculture in California," said Karen Ross, secretary of the California Department of Food and Agriculture.