Irrigation Allocation Under a Curtailed Water Right
A 640-acre almond and tomato operation holds a pre-1914 riparian right historically delivering 3.0 acre-feet per acre, but the state water board has curtailed deliveries to 1.6 acre-feet per acre for the coming season due to drought. The owner has 300 acres of mature almonds (a perennial crop that cannot be fallowed without multi-year loss) and 340 acres of tomatoes (an annual crop that can be idled, though contracts carry a $180,000 penalty if not planted). Soil maps show 120 acres of Class II ground with 2.1 af/ac available from a shallow aquifer and 200 acres of Class IV ground where pumping costs run $95/af. The owner asks you to recommend an allocation that protects long-term asset value while minimizing financial exposure.
1. How should the 1.6 af/ac entitlement be allocated across the two crops, and what role should the supplemental groundwater play?
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Start by protecting the perennial asset: almonds cannot be fallowed, so they get first call on the curtailed surface water. 300 acres × 1.6 af/ac = 480 af to almonds. That leaves 340 acres × 1.6 = 544 af of entitlement for tomatoes if fully planted. The judgment call is whether to plant all tomatoes or idle acreage. Compare the $180,000 non-planting penalty against the cost of the marginal water. Pumping from the shallow aquifer on Class II ground costs roughly the energy and lift on 2.1 af/ac; pumping on Class IV ground at $95/af for the deficit is far more expensive. If the tomato water shortfall is, say, 0.6 af/ac × 340 = 204 af, buying that from the Class IV pump costs ~$19,400 - far less than the $180,000 penalty. So plant the tomatoes and cover the deficit with the cheapest available groundwater, reserving the shallow aquifer first. Do not treat the entitlement as a per-crop equal split; treat it as a priority stack: permanent crops, then contractual obligations, then marginal economics.
2. The owner proposes fallowing 100 acres of almonds instead of tomatoes to free water. Evaluate this using asset-value reasoning.
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Fallowing almonds is a false economy. Almonds are a multi-year capital asset; removing 100 acres sacrifices not just this year's crop but the establishment cost and several years of production before replacement trees bear. The water freed (100 × 1.6 = 160 af) would cover only a fraction of the tomato deficit and could be replaced more cheaply by Class IV pumping at ~$95/af (160 af ≈ $15,200). The correct comparison is the present value of lost almond production over the replant cycle versus the marginal cost of substitute water - the latter is dramatically lower. Recommend rejecting the almond fallowing and instead negotiating with the tomato buyer to reduce planted acreage or defer the penalty, which addresses the real exposure without impairing the permanent asset.