April 24, 2024

VIDEO: Weekly California Water Market Report

Groundwater Basin Under State Probation; Allocation Updates Continue

Some south-of-Delta (SOD) water market participants are expecting to pay $450/AF to $650/AF for supplemental water this year. Prices may soften if project water allocations increase from 35% to 50% for SOD agricultural contractors. Ultimately, prices will be highly influenced by final allocations. Allocations may be updated in the coming days. However, contractors are concerned that final allocations may not be determined until May or June, which will make water supply planning for peak irrigation season more challenging.

Latest Allocation Update: Central Valley Project (CVP) Friant Division

The U.S. Bureau of Reclamation (USBR) increased allocations for the Friant Division of the Central Valley Project (CVP) from 95% to 100% for Class 1 and from 0% to 5% for Class 2. Class 1 water is the first 800,000 AF of water captured in Millerton Lake under long-term contracts. Class 2 is the next 1.4 million AF of water. Class 1 contractors are primarily cities or districts with limited access to groundwater, while Class 2 water is mostly used for irrigation and groundwater recharge.

Surface water supplies from the Friant Division are reliable compared to Delta-dependent sources available to other SOD markets. Thus, trading activity/prices tend to be lower than these other markets.

100% Class 1 allocations and availability of some Class 2 water indicates favorable water supply conditions this year. In 2023, a wet year, Class 1 was allocated 100% and Class 2 was allocated 70%.

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