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Improved Water Supplies Lead to Drop in Agricultural Water Prices

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 2018, supplemental water transfers totaled 102,870 AF—with 20,321 AF provided under the Yuba Accord, and the remainder was Central Valley Project (“CVP”) water. The growers paid an average of $373.16/AF for the water and $76.84/AF in O&M charges to Westlands and San Luis & Delta Mendota Water Authority.

Water supplies have improved significantly since the drought emergency ended. In 2018, South-of-the-Delta agricultural water users received CVP allocations of 50%, and water prices are about 1/3 of what they were during the peak of the drought. There were no leases in 2017, when allocations were 100%.

Prices ran up to approximately $1,100/AF in 2014 and 2015, when CVP allocations for agricultural water users were 0%. In 2016, when allocations were at 5%, prices for supplemental leases were $641.30/AF. 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