|Read Historical Background|
Sales of Base Annual Production Rights
Generally, the volume of Base Annual Production rights traded is small, with spikes in volume driven by the occasional large transaction. In the first half of 2015, a total of 525 AF were traded—compared to 844 AF in the first half of 2014 and 862 AF in the second half of 2014.
After generally trending upward since the inception of the market, prices seem to have settled around $5,000/AF, where they have been for the last year and a half.
Leases of Free Production Allowances and Carryover
The volume of leases of FPA and carryover water in the Alto subarea tends to fluctuate: high in the first half of the year and low in the second half. Because the Mojave Basin Watermaster operates on a fiscal year, the short-term transfers approved in the first half of the calendar year may reflect efforts to prepare for the new watermaster year.
Volume totaled 18,721 AF in the first half of 2015—compared to 22,488 AF in the first half of 2014 and 20,323 AF in the first half of 2013. The second half of 2014 saw 1,332 AF leased.
Much like with the sale of BAP, the average price for leases of FPA have generally trended upward since the beginning of the market. Though the first half of this year did see easing after prices reached a peak in the second half of last year. Prices were at $360/AF in the first half of 2015, $368/AF in the second half of 2014 and $345/AF in the first half of 2014.
Trends have remained consistent for both sales and leases since the market began, so expect more of the same.
Written by Marta L. Weismann