That sounds like a good argument to stop allowing california agriculture to externalize the cost of water.

That is purely a political problem, not an economic one. The economics are forehead-slap obvious.

Alfalfa is a very water intensive crop and is grown all over california. You can get 7 tons per acre per year at a value of $220 per ton [1]. It requires 435,000 gallons of water per acre per year [2].

[1] https://coststudyfiles.ucdavis.edu/uploads/cs_public/f2/0e/f...

[2] https://www.arb.ca.gov/fuels/lcfs/workgroups/lcfssustain/han...

Am I missing something? That still sounds profitable just based on the data I read in these comments:

7 ton / acre * $220 / ton - (435000 gallon / acre * $0.40 / 1000 liter)

$881.34 / acre

Your math checks out - of the top of my head, 435,000 gallons is approx 1.6 million liters - 1600 m^3 * $0.4/m^3 = ~$640/acre of water, for $1440 of product, or ~ $800 profit (for just water costs)

One variable we are missing is transport costs - that $0.40 is for generation, and transportation of water from the ocean to the central valley would probably be expensive.

Alfalfa is also a nitrogen fixer, so on top of being something farmers can sell it reduces furtilizer costs.

Obviously your equation is a big simplification, but you’re missing a lot of the input costs.

This depends on water being well-priced in California (i.e. not subsidized, reflective of opportunity costs and externalities). I don't know much about water in CA, but is this the case?

No it is not. The water districts are extremely powerful, and the biggest usage districts are held by agricultural interests. They have staggered elections to stop water board takeovers and ensure that they can shift water costs from usage based to per-meter fees. Captive homeowners in agriculture controlled water districts can end up with $200 a month water bills for a family of four.

Source: Lived in a water district for 7 years with some of the cheapest water in the state (sub $3 a unit) yet a water bill for a family of four with fake grass and small yard of around $180 a month. If we used ZERO water, the bill would have been about $120 in flat fees. We were subsidizing the massive avocado groves and other major agricultural producers in the water district. They brushed off our complaints and the fact that we pointed to neighboring cities with $40 water bills.

Was it $180 per month or $180 per quarter?

Per month. Very small yard. Fake grass in the back.

Just watched a documentary on Netflix about water in California which stated that 80 pct of the water goes subsidized to agriculture which is like 2 percent of the economy. They got into this family, the Resnicks of POM Wonderful and all the shady moves they made to control public water privately which caused this wake of issues including what you wrote about where families either had no water, tainted water or it was crazy expensive. California even bought back it's own water it invested to store in Kern county at a multiple. Insane stuff.

California has a very strange water system. It’s not really privatized, only ~5% of California’s water is provided by private parties last I checked. Californian water rights promise significantly more water than the state actually has (which will cause some problems).

The water districts and utilities do most of the price setting, as I understand it. The water districts are largely controlled by farming interests who do not want pricy water.

This info may be out of date, since I work in a very different water market (East Africa), so if someone knows better please correct me.

Definitely not and it would probably put most agriculture in California out of business. Farmers can't compete with cities on price.

https://www.economist.com/news/united-states/21647994-why-go...

Yep. No more California beef too. Water there is too expensive and there's no free-market in agriculture there.

That's the retail price of the coffee and a whole lot of layers of people/businesses are involved between the grower and the retailer.

> it requires 140 liters of water to produce 1 cup of coffee

Not to mention the milk that people usually add, which is even more water intensive

For someone outside the industry it’s suprisingly hard to get good data on the water needed to make milk. A search has given just under 1000L for Waikato NZ and just over 1000L for Canterbury. However the Guardian suggests 255L of water for a single litre of milk.

https://www.theguardian.com/news/datablog/2013/jan/10/how-mu...

https://sciblogs.co.nz/waiology/2012/05/24/how-much-water-do...

those reverse-osmosis systems are really expensive.... I wish I could get one at my house that could provide pure water at $0.40/1000 liters over X years... I pay a lot more then that and it it is only to get softened well water (still has 400 ppm of stuff in it)... But the health department just came to test my water and according to them, it doesn't include petroleum products, at least.

that really doesn't sound so bad. at least curiosity piquing enough to work out more of the economics and impact of using reverse osmosis water in agriculture.

I would think it might not hold up so feasible for non-cash crops, but at first glance that seems pretty cool that you might be able to use reverse osmosis water for crops. I guess you just have to convince/get farmers to give up their cheap water ha.

> if you are able to sell a cup of coffee for $5

That's the retail price though, the grower doesn't see much of that.

Those K-Cups bottom out at .25? .08 for the water is a lot.