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Almarai, the largest dairy company in Saudi Arabia, has purchased 1,790 acres of land in California’s Palo Verde Valley to grow the water-intensive alfalfa it needs to feed its cows. Almarai paid $31.5 million for the land earlier this year, in an area which enjoys “first dibs” on water from the nearby Colorado River.
Southern California settlers in the Palo Verde Valley beat out the big cities–Los Angeles and San Diego–almost 150 years ago in laying claim to the land and the water rights from the adjacent Colorado River in 1877. A Gold Rush-era ruling controls the 1,450-mile land with its doctrine of “first in time, first in right.”
The acreage purchased earlier this year is not a first in the region for Almarai. They purchased some 2,000 acres in the Palo Verde Valley area last year.
Almarai also purchased more than 9,800 acres in La Paz County, Arizona in 2014. The sparsely populated alfalfa-growing region is exempt from severe pumping restrictions. Conversely, the restrictions imposed on Phoenix, Tucson and other heavily populated Arizona regions are a result of a 1980 state law enacted to protect the state’s aquifers.
Rather than relying on farms half a world away Saudi Arabia has responsibly attempted to grow its own water-intensive crops for decades. But those efforts were discarded approximately eight years ago and the country has adopted bans on certain crops. This year the country will no longer grow wheat. Late last year the kingdom announced that over the next three years they will cease growing green fodder, including the alfalfa needed by the country’s 170,000 cows.
“It’s not easy to completely grasp the business model of the Middle East, but it may not be about business at all, said John Szczepanski, director of the U.S. Forage Export Council. “The primary focus is food security, and the means to that end like in acquiring the land and resources to ensure long-term supply.”
Saudi Arabia, the United Arab Emirates, and China all grow large amounts of alfalfa in the United States. Japan and Taiwan also grow alfalfa in the U.S. but due to a lack of land capable of being ploughed and used to grow crops as opposed to a water insufficiency.
The expansion in the American Southwest was a “natural progression” in its effort to diversify supply, said Jordan Rose, an attorney for the Almarai Co. Arizona unit. In order to ensure that weather, transportation problems or other causes don’t interrupt supplies Almarai already farms worldwide.
“The cows feed multiple times a day, and they need to be certain that they are always able to fulfill that unwavering demand,” she penned.
The U.S. is attractive to water-seeking companies worldwide. Despite widespread drought conditions in large parts of the country the U.S. has strong legal protections for agriculture though land prices are higher than in other countries.
“Southern California and Arizona have good water rights. Who knows if that will change, but that’s the way things are now,” said University of California at Davis Agronomist Daniel Putnam.
Almarai is not the only Arab-owned Gulf company wanting to grow crops as opposed to just buying them. Al Dahra ACX Global Inc. of the United Arab Emirates, and a top U.S. hay exporter in Bakersfield, California, farms extensively in Southern California and Arizona. It also plans to expand its land ownership in the U.S. with an additional 7,500 acres for alfalfa and other crops. Two plants–one in California and one in Washington state–packages the crops for export.
Over the last decade, Saudi Arabia and the United Arab Emirates have been substantial buyers of U.S. hay. Combined they purchased 10 percent of the U.S. exports of alfalfa and other grasses in 2015.
Arizona’s La Paz County Supervisor Holly Irwin is concerned that Almarai will deplete their wells. “We’ve got them coming, moving in here and using our natural resources up. Why isn’t anyone paying attention to the ground we live on?” she asked.
University of California, Riverside, Economist Christopher Thornberg referred to alfalfa farms as a “shocking waste of a resource” and suggested California consider seizing land under eminent domain.
But supporters say Almarai has boosted the economy by growing alfalfa and buying more hay from neighboring farms. Almarai has recently broken ground in the Imperial Valley to package hay into export-ready bales. The Arizona Department of Water Resources’ maps indicated that though Almarai’s footprint has remained the same for the last 16 years its well levels in La Paz County have risen in recent years.
