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Saudi Company Looks for Water in Drought-Stricken California

Saudi Arabia's largest dairy company will soon be unable to farm alfalfa in its own parched country to feed its 170,000 cows. So it's turning to an unlikely place to grow the water-chugging crop — the drought-stricken American Southwest.

Almarai Co. bought land in January that roughly doubled its holdings in California's Palo Verde Valley, an area that enjoys first dibs on water from the Colorado River. The company also acquired a large tract near Vicksburg, Arizona, becoming a powerful economic force in a region that has fewer well-pumping restrictions than other parts of the state.

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The purchases totaling about 14,000 acres have rekindled debate over whether a patchwork of laws and court rulings in the West favors farmers too heavily, especially those who grow thirsty, low-profit crops such as alfalfa at a time when cities are urging people to take shorter showers, skip car washes and tear out grass lawns.

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"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 lie in acquiring the land and resources to ensure long-term supply."

For decades, Saudi Arabia attempted to grow its own water-intensive crops for food rather than rely on farms abroad. But it reversed that policy about eight years ago to protect scarce supplies.

To further conserve water, the country has adopted bans on selected crops. This year, the kingdom will no longer produce wheat. In December, the government announced the country will stop growing green fodder, livestock feed derived from crops like alfalfa, over the next three years.

Almarai already farms worldwide to make sure that weather, transportation problems or other conditions don't interrupt supplies. The expansion in the American Southwest was a "natural progression" in its effort to diversify supply, said Jordan Rose, an attorney for the company's Arizona unit.

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"The cows feed multiple times a day, and they need to be certain that they are always able to fulfill that unwavering demand," she wrote.

Despite the widespread drought conditions, the U.S. is attractive to water-seeking companies because it has strong legal protections for agriculture, even though the price of land is higher than in other places.

"Southern California and Arizona have good water rights. Who knows if that will change, but that's the way things are now," said Daniel Putnam, an agronomist at the University of California, Davis.

Over the last decade, Saudi Arabia and the United Arab Emirates emerged as significant buyers of American hay as their governments moved to curb water use. Together they accounted for 10 percent of U.S. exports of alfalfa and other grasses last year.