> the problem with that is "what should actually be grown" has different answers depending on whether you value profit or feeding people.

It can only be a choice between making a profit and feeding people at break-even (feeding people while losing money is not sustainable). Beyond that, the profit signal carries useful information about what the people being fed would rather eat, while keeping in line with what is economically and environmentally viable.

The problem with the current situation is that water is mispriced, and mispricing, regardless of whether it favours suppliers or consumers, makes it unsustainable in the long run.

In this case, we aren't feeding people. We're feeding cows.

We're also running into frequent water crises where politicians ask people to shower less while we dump 90% of the state's water on the ground.

Exactly. You want to decrease the water usage inefficiencies up the chain. The govt should advocate eating less animal products (I'm not necessarily saying all) if it really cared about conservation.

In this case though the high water items are not what feed people well - almonds and coffee?

False dichotomy. People will survive just fine with a different crop than almonds.

Exactly. One almond requires about a gallon of water. We can easily replace that with a more efficient food.