Escalating cost of ag water: “It’s not cheap, but you only pay for it once” — Melanie Calvert

South Platte River Basin via Wikipedia
South Platte River Basin via Wikipedia

From KUNC (Luke Runyon):

Farm families in Western states like California and Colorado are increasingly under pressure to sell their water. It’s been coined “buy and dry,” as water is diverted from farm fields and instead used to fill pipes in condos and subdivisions.

Buy and dry deals are usually cut behind closed doors, in quiet, unassuming meetings. A city approaches a farmer, or a farmer approaches a city, and strikes a deal. But a recent public auction in Loveland, Colorado threw the doors wide open, bringing myriad bidders and interests into one room to duke it out. It gives a glimpse of the unique stresses and opportunities farmers face in parched portions of the West.

Bidders, some in cowboy hats, some in business suits, packed the room at the Larimer County Fairgrounds. Abuzz with a sort of nervous energy, audience members whisper about how high the prices might climb. Auctioneer Spanky Assiter takes the mic, and lays out what’s at stake.

“Today’s an opportunity to buy water,” he says.

“You see commercials on TV all the time, invest in gold, invest in silver, invest in natural resources. There’s nothing more valuable than water.”

An auction of this size — with hundreds of units of Colorado-Big Thompson water and more than a dozen shares of a local ditch company up for grabs — is rare. The Colorado-Big Thompson project moves water from the Western Slope through canals and tunnels to provide water for Front Range municipalities and farmers.

There’s also more than 400 acres of farmland, except that’s not the asset that packed the room. Even though the tracts sit just 40 miles from Denver, one of the fastest-growing metro areas in the country, the water that flows into the fields is worth way more.

Scotti Reynolds, who ran a cattle operation on the property with her husband, until his death in 2012, has been contemplating how and when to sell the property.

“The land and the water have become more valuable than the income from farming.”

One by one, water shares find new owners in the crowd. When all’s said and done the grand sum for the 400 acres, and the water rights, totals $12.6 million. The water rights, between the ditch shares and the units, alone went for close to $10 million. By far, the biggest spenders were cities — like Broomfield, a Denver suburb.

“It’s not cheap, but you only pay for it once. You buy it once and you get it forever,” says Melanie Calvert, who purchases water for the city.

At the auction she bid $3.2 million for 120 units of Colorado-Big Thompson water, each unit fetching $27,000. The city’s purchase continues a longtime trend. Increasingly, water is more valuable coming out of lawn sprinklers and bathroom faucets than growing sugar beets.

Broomfield’s been on a tear. The city’s spent $12.6 million since the beginning of 2016 on acquiring water, with another $2.6 million deal in the works. Hardly the only city buttressing water supplies by buying up agricultural water rights, they’re just following in the footsteps of Thornton and Aurora, other cities with reputations for buying lots of water.

The recently adopted Colorado Water Plan laments the fact that auctions like this even exist. It attempts to offer up alternatives, some of which are still theoretical because of the legal wrangling and economic conditions needed to bring them to fruition.

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