Agricultural Water Prices Ease as California Drought Lets Up

Westlands Water District, in California’s Central Valley, administers a supplemental water transfer program to make up the difference between its available water supplies and the needs of its growers each year. The cost of water, along with a charge to cover the cost of operations and maintenance (“O&M”), is passed along to the growers who receive the water.

In 2016, supplemental water transfers totaled 142,149 AF—with 89,135 AF coming from Central Valley Project (“CVP”) contractors, 40,000 AF from State Water Project contractors, and 13,014 AF from other sources. The growers paid an average of $641.30/AF for the water and $153.70/AF in O&M charges to Westlands and San Luis & Delta Mendota Water Authority.

While the drought emergency remained in place in 2016, the conditions were not as extreme as previous years. South-of-the-Delta agricultural water users received CVP allocations of 5%, and water prices dropped more than 40% from previous levels.

Prices ran up to approximately $1,100/AF in 2014 and 2015, when CVP allocations for agricultural water users were 0%. In 2013, the final CVP allocation for South-of-the-Delta agricultural users was 20%, and prices averaged $360/AF. The historical average price for the period from 2000-2012 (prior to the California drought) was $198/AF.

 

Written by Marta L. Weismann