CA water crisis isn’t just a headline-it’s your bottom line. Are you adapting or getting left behind? Survival means rethinking everything.
EXECUTIVE SUMMARY: California’s dairy industry faces a permanent shift in water availability due to political choices, environmental regulations like SGMA, and climate variability, rendering old water management practices obsolete. Despite seemingly full reservoirs, agricultural water allocations remain severely restricted, forcing producers to confront rising costs and adapt or face failure. Savvy dairy operators are leveraging feed flexibility with byproducts like almond hulls, optimizing on-farm water use in parlors and irrigation, and strategically acquiring land for water-efficient forage production. While large-scale policy solutions like the Delta Conveyance Project offer long-term hope, immediate survival hinges on proactive on-farm innovation, diversified water strategies, and active engagement in local water governance. Ultimately, those who treat water as a precious, managed resource will thrive in this new, challenging era for California agriculture.
KEY TAKEAWAYS:
- Scarcity is the New Normal: California’s water crisis is not temporary; regulatory and environmental pressures mean less water for agriculture, even in wetter years, demanding a permanent shift in dairy farming practices.
- Adaptation is Non-Negotiable: Survival depends on proactively embracing water-efficient strategies, including alternative feeds like almond hulls, innovative on-farm water conservation (e.g., in parlors and irrigation), and strategic land use for drought-tolerant forage.
- Policy is Slow; On-Farm Action is Now: While long-term infrastructure projects are discussed, immediate resilience comes from individual operational changes, engagement in local water governance (GSAs), and robust drought contingency planning.
- Economic Realities Have Shifted: Increased costs for water (due to SGMA fees and scarcity) and resulting forage price hikes necessitate a re-evaluation of all water-related expenses and production practices to maintain profitability.
California’s water landscape isn’t just changing, it’s fundamentally transforming. Despite three consecutive decent water years, dairy producers face mounting restrictions that permanently reshape the industry’s economics. Those who cling to outdated water management practices will struggle, while forward-thinking producers who embrace strategic adaptation will find unexpected competitive advantages in this new reality.
The Hard Truth About California’s Water Politics
If you’re running a dairy in California today, let’s be honest about what you’re facing: a water distribution system that serves political interests first and agriculture second. Northern California enjoys an “above normal” water year while the San Joaquin Valley, our dairy heartland, struggles with “below normal” conditions. But here’s what should infuriate every producer paying attention: despite reservoirs being fuller than they’ve been in years, the two major surface water projects only deliver 50% of contracted supplies.
Why? Because environmental regulations are trumping agricultural needs. This April, the Department of Water Resources slashed Delta pumping rates from 1,200 cubic feet per second to 600 cfs to protect endangered fish species.
Let’s call this what it is: a political choice, not a hydrological necessity. During December 2024 through March 2025, 12.3 million acre-feet (the volume of water covering one acre of land to a depth of one foot) flowed through the Delta, but only 11% was exported south. Millions of acre-feet of water that could have sustained thousands of productive acres flowed uselessly to the ocean.
There’s been plenty of talk in Sacramento and Washington about addressing these regulatory constraints. The new federal administration has made noises about change, but when have promises from politicians ever filled your irrigation ditches? For dairy producers making real-world decisions about crops and herd management, promises don’t pay bills; policies do.
Are You Still Managing Water Like It’s 2010?
While surface water politics grab headlines, the Sustainable Groundwater Management Act (SGMA) fundamentally changes how water is managed underground. You’re already behind the curve if you’re still pumping groundwater like an unlimited resource.
The rubber meets the road in Tulare County, California’s dairy epicenter, with nearly 1.2 million milk cows. Local Groundwater Sustainability Agencies are now actively enforcing pumping allocations and charging fees that make your cell count penalties look like pocket change.
If you’re pumping groundwater in the Tule Subbasin, you’re now paying $300 per well annually, plus $20 per acre-foot pumped. Some Kaweah Subbasin landowners have seen fees increase from $32 per acre to a potential $140 per acre. These aren’t small fees-they fundamentally change the economics of water-intensive crops like forage and force tough questions about how you’re allocating this increasingly precious resource.
Ask yourself: Have you recalculated your true cost of forage production lately? Most producers I talk to haven’t, and they’re making decisions based on outdated economics.
The evidence is clear in the markets. In southern Tulare County, where groundwater regulations are tightening, winter forage prices hover in the mid-$50 per ton range. Drive to nearby areas not yet affected by strict groundwater allocation rules, and those same forages cost about $15 per ton less. This price differential isn’t theoretical- recent USDA Agricultural Marketing Service data shows substantial regional price variations, with even good quality alfalfa commanding $100 per ton and wheat hay at $80 per ton in regions with less water pressure.
Why Are Almonds Failing While Dairies Survive?
While these water limitations create serious challenges, the industry must acknowledge an uncomfortable truth: dairy operations have inherent adaptation advantages that permanent crop growers don’t, yet many producers fail to leverage these advantages effectively.
Tree farmers in southern Tulare County face existential threats. Groundwater allocations simply aren’t sufficient to keep orchards alive year-round. As these orchards disappear (estimates suggest up to 70,000 acres of farmland could be fallowed in southern Tulare County alone), land values have plummeted 30-40% in SGMA-affected areas.
Dairy producers, by contrast, have multiple adaptation pathways:
- Feed flexibility: You can adjust ration components when local forage prices spike, but are you leveraging this advantage or still clinging to traditional formulations?
- Purchasing power: The ability to source hay from other regions provides options. Have you explored building relationships with suppliers in different water basins?
- Alternative feeds: Byproducts like almond hulls, cottonseed, and dried distillers’ grains offer cost-effective substitutes, yet many nutritionists still treat these as minor ration components rather than strategic resources.
- Land use adaptability: Former orchard land can be converted to winter forage production. Are you aggressively pursuing these opportunities or watching from the sidelines?
Despite challenging economics, this adaptability explains why there’s no mass exodus of dairy production from southern Tulare County. But adaptation isn’t automatic; it requires proactive strategy adjustment.
The Untapped Potential of Almond Hulls
Let’s challenge conventional wisdom about feeding dairy cows in water-constrained California. If you’re still treating almond hulls as a minor ration component rather than a strategic resource, you’re missing a major cost-saving opportunity.
California’s massive almond industry produced approximately 2 billion kilograms of almond hulls in 2017, according to UC Davis research, a readily available byproduct that can effectively replace portions of traditional forages in dairy rations. Research from UC Davis shows almond hulls have an overall nutritional value equal to mid-grade alfalfa hay, with digestible fiber and fermentable sugars that support milk production.
Scientific studies confirm they can be incorporated at up to 20% of the diet dry matter (approximately 12 pounds per cow per day) without significant negative effects on milk production or components. A 2021 study published in the Journal of Dairy Science demonstrated that feeding almond hulls at rates up to 20% of the diet could improve digestibility and milk fat percentage, despite decreasing milk protein production.
Yet here’s the surprising reality: A 2012 survey found that only 39 out of 104 total mixed rations on California dairies contained almond hulls, with an average feeding rate of just 1.45 kg/cow. Even if all 1.7 million lactating cows in California consumed almond hulls at this rate, there would still be a surplus on the market. What explains this disconnect between science and practice?
In high-producing California dairy cattle group surveys conducted in 2008 and 2014, researchers found no relationship between almond hull levels in the total mixed ration and milk production, even with inclusion rates up to a remarkable 22% of diet dry matter. The economics are compelling, with almond hulls typically costing significantly less than comparable forage on a net energy for lactation basis.
Yet why do so many nutritionists still treat them as an afterthought rather than a cornerstone feed ingredient? Is it outdated thinking, a lack of knowledge, or simple resistance to change?
From Orchard to Forage: The Opportunity Most Dairies Are Missing
As water allocations squeeze tree farmers out of business, a surprising opportunity has emerged that savvy dairy producers are already exploiting, former orchard land becoming available for winter forage production.
Winter forages like wheat, triticale, and oats can thrive primarily on winter precipitation, supplemented by minimal irrigation. This aligns perfectly with reduced groundwater allocations.
The question isn’t whether this opportunity exists; it’s why more dairy producers aren’t seizing it. Land that once commanded premium prices for permanent crops is now available at substantially reduced rates. Are you actively looking for these opportunities or waiting for them to find you?
Rethinking Parlor Water: Are Your Washdown Protocols Draining Your Profits?
Progressive dairy producers aren’t just changing what they feed, they’re revolutionizing how they use water. The gap between average and top-tier water efficiency on California dairies has never been wider, and it’s showing up directly in the bottom line.
According to research published in December 2023 in the journal “Efficient Water Use in Dairy Cattle Production,” dairy farmers can significantly reduce their water footprint through strategic changes to operational practices. These include proper maintenance of water and wastewater systems, adequate ventilation of facilities to reduce cooling water needs, and monitoring water consumption patterns.
One area ripe for innovation is your parlor’s water use. Many California dairies still use traditional high-volume washdown systems that consume 15-20 gallons of water per cow daily. Meanwhile, operations implementing recycled water systems achieve dramatic reductions by capturing, treating, and reusing parlor water multiple times before field application.
Water from heat exchange systems used to cool milk after milking represents another overlooked opportunity. Rather than sending this clean, warm water down the drain, progressive dairies are capturing it for animal drinking water or irrigation, according to water efficiency researchers.
When was the last time you fundamentally reassessed your irrigation practices? Most producers I speak with haven’t made significant changes in decades, despite revolutionary technological advances and understanding of soil-water dynamics.
The Policy Horizon: Don’t Hold Your Breath
While on-farm adaptations are crucial, the long-term viability of California dairy production also depends on broader policy solutions and infrastructure investments. Several developments bear watching:
The State Water Resources Control Board is developing the “Healthy Rivers and Landscapes Program,” an initiative to implement environmental improvements in many of California’s largest rivers and the Bay-Delta estuary. According to the California Natural Resources Agency, these agreements aim to “provide a promising pathway to protect and restore our environment, enable California’s economy to thrive, and provide a foundation” for more sustainable water management.
The Delta Conveyance Project aims to modernize water movement from the Sacramento River through the Delta. On May 14, 2025, Governor Newsom announced a significant proposal to streamline this project as part of his May budget revision. “For too long, attempts to modernize our critical water infrastructure have stalled in endless red tape, burdened with unnecessary delay,” Newsom stated. “We’re done with barriers, but our state needs to complete this project as soon as possible so that we can better store and manage water to prepare for a hotter, drier future. Let’s get this built.”
But let’s be realistic: California’s track record on water infrastructure is abysmal. The Sites Reservoir was first proposed in the 1980s and still hasn’t broken ground. The Delta tunnels concept has been debated for decades with little progress. Counting on policy solutions is like waiting for ideal breeding weather; it might happen eventually, but you’d better have a plan B.
Are You Ready for the Next Drought?
As you plan your dairy’s water strategy, keep this fact in mind: climate projections indicate California will experience more extreme swings between wet and dry periods, which scientists call “climate whiplash.”
The NOAA Seasonal Drought Outlook for summer 2025 already favors the persistence of drought conditions in the Western U.S. Recent research has documented significant negative impacts of climate change on global crop yields, with implications for both quantity and quality of forages.
Let me put this bluntly: another severe drought is coming to California. The only question is when, not if. Will your operation be ready, or scramble like many did during the last drought cycle?
This volatility underscores the need for robust risk management strategies around water security. Dairy producers who diversify their water portfolio, combining secure water rights, efficiency measures, feed flexibility, and innovative storage, will be better positioned to weather these climatic extremes, much like how diversified marketing approaches provide financial stability amid market fluctuations.
The Bottom Line: Five Moves Smart Dairy Producers Are Making Now
California’s water landscape isn’t going back to the good old days when groundwater was free and surface water was reliable. The confluence of variable hydrology, stringent environmental protections, and landmark groundwater regulation is forging a new paradigm where water is both scarcer and more costly. This isn’t a temporary challenge; it’s the new normal.
For dairy producers determined to thrive in this environment, five strategic imperatives stand out:
- Diversify your feed portfolio: Don’t rely exclusively on locally grown forages. Develop relationships with suppliers in different water basins, experiment with alternative feeds like almond hulls at higher inclusion rates, and consider strategic partnerships with farmers in less water-stressed regions. When did you last challenge your nutritionist to formulate rations with significantly less traditional forage?
- Invest in water efficiency: Every gallon saved is a gallon earned. Precision irrigation technologies, soil moisture monitoring, and improved water recycling systems offer some of the best returns on investment in today’s dairy business. The smartest producers I know are investing in water efficiency with the same intensity they once put into milk production genetics.
- Optimize land use decisions: Convert portions of your land base to winter forages that maximize production per water unit rather than per acre. Be strategic about which fields receive full irrigation versus deficit irrigation. Are you still trying to grow the same crops on every acre, or have you matched your cropping strategy to the new water reality?
- Engage in water governance: Participate actively in your local Groundwater Sustainability Agency. These bodies are making decisions that will affect your operation for decades. If you’re not at the table, you’re on the menu, and many dairy producers I know are entirely disengaged from these critical forums.
- Develop a drought contingency plan: Document specific steps your operation will take if water supplies decline by 20%, 40%, or even 60%. Having this plan before you need it can prevent panic decisions during a crisis, yet how many producers can show me their written drought plan?
The path forward isn’t easy, but California’s dairy industry has repeatedly demonstrated its resilience and innovative spirit. Those who adapt fastest to this new water reality won’t just survive- they’ll establish competitive advantages that position them for long-term success.
Let me challenge you: Are you managing water like it’s your most precious resource, or are you still treating it like 2010? Your answer to that question may determine whether your dairy operation thrives or survives in the coming decade.
What water adaptation strategies are working on your dairy? Share your experiences in the comments section below or join the conversation on The Bullvine’s social media channels. Let’s learn from each other rather than repeating the same mistakes.
Learn more:
- California’s Dairy Dilemma: Can the Golden State’s Industry Survive Its Triple Threat?
- TOUGH QUESTIONS: The Water Time Bomb Under Texas Dairy
- Sustainable Dairy Farming: Revolutionizing Practices for a Greener, Profitable Future
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