You too, New York Times? Didn’t we spend all last year discussing this?
The farmers pay a maximum of $500 per acre-foot of water from the state water project, KFSN-TV reported. But the Tejon Ranch is paying the farmers $5,850 an acre-foot, meaning that the sellers will net $11.7 million.
Tejon Ranch is proposing to buy the water-right; it would pay approximately $6k for every acre-foot in the water right and all their future yields. This is not a profit of ten times what the farmers would pay for any one year’s water.
I’m pretty disappointed that this keeps getting perpetuated. That means that the reporters writing about this plain-out do not know the field*. I read that first story, about the Mojave Water Agency, and instantly knew that no one was paying $5k or $6k per acre-foot of water. No one does that. The highest price per acre-foot I’ve ever heard was about $1800/acrefoot. That was for de-sal in Santa Barbara, and it was so expensive that they don’t use their de-sal plant, all those rich people preferring to switch out their toilets to paying that kind of money. If rich people in Santa Barbara won’t pay $1800 per acrefoot, no one is paying $5K per acrefoot, especially not relatively poor people in a desert exurb. I would believe a bizarre money laundering scheme before I’d believe that anyone in California pays $5k per acre-foot. Frankly, anyone who reports on California water should have enough sense of scale to know that number is vastly wrong.
The shame of this is that these posts and articles miss the real story about Dudley Ridge Water District. They caught the ‘marginal agriculture is transitioning out at the state’s expense’ story, but the truly interesting thing about Dudley Ridge is the way it has completely circumvented all of the public processes that are supposed to tie a special district into local democracy. They are answerable to fucking no one, not their constituents nor district staff, because they have none, and not the county they’re in. It’d take an act of the legislature to get any interests besides the few companies who own land in Dudley Ridge brought into their decision-making. It looks to be legal, but it surely isn’t what special districts are meant for.
While we’re here, let’s update our idle calculations (Man, I just saw that I have those fractions upside down. How embarrassing! Why didn’t any of you say anything?):
($11.7M)/(1998 af of water right) = $5,850 per af of water right.
Compared to the Irvine Ranch sale of water and land:
($5,850 per acre for just the water right)/($8,400 per acre for the water right and the land) =0.70
Last time we said that water is 62% of the value of land in the western SJV. This time we see that water is 70% of the value of land in the western SJV. Same ball park, and not surprising. I hope that bankers in the SJV are taking water availability into their lending practices.
I defend and make fun of engineers a lot here. But when I see how reporters mangle the story because they don’t understand what is being sold, I return to my belief that engineers are the only people who are prepared to be the sober and devout stewards of our most important natural resource: correct units.
*ADDED: I ended up talking to the reporter for the NYTimes, because I’m that much of a pedant. I take it back; she knows the field. She sounded like all you water junkies. But this means there’s another problem, which is that otherwise informed people are so distant from the prices of water that they don’t have an internal sense of the range. Maybe I’ll blame unit conversion, since urban people talk about gallons and million-gallons. This clearly leads otherwise good souls into error and sin. The righteous measure in acre-feet, people.