Bloomberg News reports that water prices in California are at an all-time high. The main reason is the severe drought that has choked off the supplies to the farms and the cities across the so-called Golden State.
On the Nasdaq Veles California Water Index, the cost of water ticked at $1,144.14 per acre-foot on June 27th, which was recorded to be up by 56% since the beginning of the year. The average price of the water-right transactions across the state’s five markets is tracked by this index.
The price of water is even higher in some of the pockets of California. Here, the cost hovers around $2000 per acre-foot, especially in the Westland regions, as per Sarah Woolf, the Water Wise president. Water Wise is a water consultancy and brokerage firm that is based in Fresno. The Westland region is the United States’ biggest agricultural water district, comprising 1000 square miles and more farmland in Central Valley.
Water Surges in California
Bloomberg News reports that the escalating prices of water indicate how rapidly the water crisis in California is growing, adversely impacting the growth of food crops that bank heavily on irrigational activities.
The historic drought has cut off surface water supply even to those under the California complex water rights system’s most senior. Gavin Newson, the Governor of California, has announced a state of emergency, thereby ordering restrictive use of water and curbing the same for farmers and in irrigation districts.
Woolf also stated that never have the prices been so high consistently while speaking during a telephonic interview. She also said that this condition is not sustainable from the perspective of the agricultural front. While speaking over the phone, she revealed that she is unaware of any crop that can carry water costs like that.
New regulation related to groundwater use further complicates the supply scenario in California, with few estimating that as much as one million acres have been fallowed in the San Joaquin Valley of California over the next several years due to a reduction in the access to surface and groundwater.
