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Page added on April 7, 2016
Saudi Arabia is buying US land to feed its cows
Unable to sustain their own livestock in the desert, Saudi Arabia is scooping up more and more American farmland, with the onus now on drought-stricken U.S. states to raise the crops to feed Saudi dairy cows.
Saudi dairy company Almarai, which in 2014 bought 9,600 acres of farmland in Arizona, has expanded its U.S. farmland holdings to 14,000 acres, causing growing worries about the state of local water reserves in drought-stricken Palo Verde Valley in southern California.
Saudi Arabia is mostly desert, and water is scarce. Yet the kingdom has 170,000 dairy cows that need feed. Alfalfa is a popular cattle feed, but unfortunately, it is also a thirsty crop. Since the kingdom is unable to grow alfalfa locally without reducing its water reserves to an even more dangerous level, it is buying land abroad to grow the plant.
Enter the U.S. Southwest.
This region of the United States is the driest, yet it is attractive for the Saudi company because of water rights. California, for instance, has been suffering worsening droughts for the past few years, yet water rights favor farming, specifically in Palo Verde Valley, making the state attractive for the Middle Eastern dairy firm.
While the battle over water rights is intensifying in California, farmers in Palo Verde have “first dibs” on water from the Colorado River. Likewise, where the Saudis bought farmland in Arizona, water rights are friendlier to farmers.
As AP reports, Almarai is by no means the only company taking advantage of favorable legislation in the U.S. Companies from the UAE, China, and Japan, have also jumped on this bandwagon, buying up farmland in the U.S. and elsewhere and then exporting the crops back home. It’s proven, for them, to make more economic sense than to grow at home.
It seems, however, that the Saudi farmland is rubbing Americans the wrong way, perhaps because of the size of its holdings or because of the fact that Saudi Arabia is the United States’ main rival in oil, and the country that many blame for the current state of the oil market; not to mention the recent trend to see Saudi Arabia as more of a threat after long years of “partnership”.
And water is a strategic asset that brings up myriad sensitivities, much like oil.
The comments sections on the AP story paint a picture of disgruntlement and resentment about water rights in the U.S. While every drop of urban citizens’ water is measured and most residential lawns are nearly grassless and brown, farmers—including non-U.S. farmers—can essentially divert river water or other natural water sources as much as they like to grow their crops, even if these crops are then exported to feed foreign cows.
There are, however, voices that note Almarai’s water conservation efforts. According to data from the Arizona Department of Water Resources cited in the AP story, the level of the wells in Almarai’s property in Arizona has actually risen recently. The company also helps the local economy in the form of buying alfalfa hay from neighboring farms.
For Saudi Arabia, buying land abroad helps the country maintain its food security and preserve what remains of its water reserves. For Arizona and California residents, sharing what little water there is with the Saudis while being asked to not water your lawn creates some resentment.
In the end, the Saudi’s can afford the land, and the current U.S. law allows them to use the water. In this environment, calls for a change in legislation are likely to intensify, and that change could become a reality before the Southwest turns into a Middle Eastern-style desert.
27 Comments on "Saudi Arabia is buying US land to feed its cows"
twocats on Thu, 7th Apr 2016 12:40 pm
In reading the “3 trillion SWF” article i agreed that the idea was mainly stupid. .. assuming the saudis would use that money to buy something less valuable than oil. But if they diversify appropriately … buying land, solar tech, gold, any number of things… then its a potential good idea.
One has to ask… even in a collapse light scenario could the saudis maintain control of this land.
I know it seems like they are selling low but these types of sales and acquisitions are best done in a depressed economy when tensions about resource limits are low. They can go buy companies and resources without too much suspicion because we are in a period of overproduction.
GregT on Thu, 7th Apr 2016 3:35 pm
“In the end, the Saudi’s can afford the land, and the current U.S. law allows them to use the water. In this environment, calls for a change in legislation are likely to intensify, and that change could become a reality before the Southwest turns into a Middle Eastern-style desert.”
First the Saudis are blamed for too expensive to produce US oily stuff, and now they’re being blamed for the looming US water crisis.
As if 14,000 acres will make any difference at all.
Pennsyguy on Thu, 7th Apr 2016 3:40 pm
The Saudis are buying land in the U.S. southwest to feed their dairy cattle. I feel sorry for anyone who writes satire for a living.
GregT on Thu, 7th Apr 2016 3:46 pm
Here’s a novel idea;
How about shutting down around 100 or so golf courses out of the over 15,000 currently in the US?
AND, stop watering lawns during the summer. They’ll grow back.
HARM on Thu, 7th Apr 2016 4:44 pm
I’m actually less concerned about the Saudis buying farmland here to feed cattle (to prop up unsustainable population growth in a freakin DESERT of all places) than I am about their buying U.S. POLITICIANS.
The former transfers a limited amount of U.S. freshwater and soil to the KSA, not great but not really that big in the grand scheme of global resource transfers.
The latter transfers a very LARGE quantity of American political power to a violent, misogynistic repressive regime that wants to kill, enslave or forcibly convert people like me. That’s the one that keeps me up at night.
antaris on Thu, 7th Apr 2016 4:46 pm
I go to the grocery store to buy milk.
Some people in my neighbourhood have home delivery of milk.
These Saudi’s got us all beat, milk delivery by Airbus.
Davy on Thu, 7th Apr 2016 5:46 pm
There are actually more golf courses per capita in Canada than the US it appears with 2400 nationwide.
Davy on Thu, 7th Apr 2016 5:50 pm
14,000 acres wow big deal. The water rights are water rights does it matter? The real issues is changing the water right laws for everyone to reflect reality in the southwest. This will happen because the drought is not over it just took a coffee break.
brianr on Thu, 7th Apr 2016 7:58 pm
It doesn’t seem cost effective to buy land and export alfalfa hay from the Western US to Saudi Arabia. Saudi Arabia has Africa next door, with cheap land and cheap labor and plenty of water in the Equatorial regions. I’m wondering why they didn’t choose Africa.
Davy on Thu, 7th Apr 2016 8:05 pm
Brian, they are in Africa already. I believe they are in Ethiopia. I imagine they are diversifying for political risk and or exchange rate issues. Maybe a palace prince likes the southwest. Could be a terrorist spawning location. Who knows with the Saudi’s.
GregT on Thu, 7th Apr 2016 10:01 pm
“There are actually more golf courses per capita in Canada than the US it appears with 2400 nationwide.”
Canada isn’t concerned about the Saudis using water for a 14,000 acre dairy farm.
dooma on Fri, 8th Apr 2016 3:08 am
The Chinese just bought one of the biggest dairy farms in my country as well as many food producing farms and natural resources at fire sale prices.
Our government will sell the people’s assets for a quick buck. It is completely wrong and the average person has no say in the matter. Pretty soon they will own us outright!
makati1 on Fri, 8th Apr 2016 3:45 am
dooma, China is doing with money what the Us is trying to do with bombs. Trying to control resources. China is spending those trillions of reserves on real stuff because they know that those reserves are just paper IOUs that will never be repaid by the bankrupt governments that issued them. The US being number one.
Even the Russians are rebuilding their reserves with gold and not paper. I wonder if there is any gold left in Fort Knox? The inability to audit it or even see it has not been possible for decades. I think there is none there. The smart people are trading paper for gold. I wish I had a bit more to invest in it. LOL
GregT on Fri, 8th Apr 2016 9:34 am
dooma,
The Chinese are buying up everything they can get their hands on in Canada. Canadian governments at every level, are literally selling the farm to China.
Davy on Fri, 8th Apr 2016 10:38 am
It’s called Chinese money laundering. Many Chinese peasants are finding they are not getting paid because rich Chinese are leaving the country with billions and buying up real estate in the west. Chinese companies have huge bad debt at home but it is not being realized so they are taking more credit on and buying up overseas assets.. China has the highest aggregate debt to Gdp on any major economic power. There foreign exchange reserves are meaningless when that unfunded liability is considered. They have huge malinvestment and bad debt so they choose to buy up assets overseas because most Chinese assets have been rehypothicated multiple times. Companies are technically insolvent. They instead chose to buy up real assets with value which cannot be found in the ruined Chinese economy.
Anonymous on Fri, 8th Apr 2016 1:53 pm
So, some saud-types are bought a small farm in the amerikan desert to water dairy cows that cant be watered in the arabian desert. And, about as far away geographically from uS Arabia as one can get. Makes sense. Leaving aside the implied arab-panic the writer is suffering from. Oh noes, some filthy arabs bought land in merica. But it was no different during the Japanese panic in the 80s when they invested in the uS. But anyhow…
It gets even funnier when one realizes the entire american SW is no more suitable for industrial-scale dairy ranches than Arabia is. The entire uS sW is x-crossed with open air canals that pipe water from 100s or even 1000s of miles away. The whole sW is in a persistent drought due to americans wasteful ways and attempts to terraform a desert by importing water from very distant sources. And saudi oil likely helped in a roundabout way to power a lot of those projects. Not that the sauds care about any of that of course…
Which makes one wonder, why don’t the ‘saud’s, just build another D-Sal plant and pipe the water to wherever the saudi-cows need it? farming and agriculture, beyond very small scale in the american deserts in an entirely artificial affair. Which also makes one wonder, if the americants can take oil, money and desert and add water, and make it the desert bloom(for a short while anyhow), what is stopping these ‘sauds’ from doing the same in their own homeland? Incompetence? Laziness? Likely both. Saudi Arabs are some of the most worthless men on the planet.
Anonymous on Fri, 8th Apr 2016 1:54 pm
https://en.wikipedia.org/wiki/Central_Arizona_Project
GregT on Fri, 8th Apr 2016 2:59 pm
“China’s Total Debt Load Now Over 280% Of GDP”
“China’s federal level debt remains low, bank’s remain strong despite higher non-performing loans on the balance sheet, and yet we still get a total debt to GDP ratio of a whopping 282%.”
“First, a little comparison. The U.S. total debt to GDP, which includes household and corporate debt, is 331.7%. The economy has not imploded because of that, though there are plenty of people out there with books and newsletters to sell who say it is only a matter of time.”
http://www.forbes.com/sites/kenrapoza/2015/05/09/chinas-total-debt-load-now-over-280-of-gdp/#666efcc867ab
GregT on Fri, 8th Apr 2016 3:22 pm
“US Debt Is 3 Times More Than You Think” Former Chief US Accountant Warns, Americans “Have Lost Touch With Reality”
http://www.theburningplatform.com/2015/11/08/us-debt-is-3-times-more-than-you-think-former-chief-us-accountant-warns-americans-have-lost-touch-with-reality/
Anonymous on Fri, 8th Apr 2016 4:15 pm
Yea, ok, but debt to ‘who’ exactly? americants always bleated incessantly during the cold war they started, that in the old Russian system, money was more or less printed ration cards that had no ‘value’. Sure, but how could you characterize petro-dollars from air any differently? Of course, the ‘debt’, is ‘owed’ and held, by and to zionist banksters. Maybe that is the key difference. But if the banksters stopped issuing more ‘debt’ that can never realistically be repaid, then just what is it that the ‘free-enterprise’ system is actually doing?
Further, if all that ‘debt’ were repaid in full tomorrow, wouldn’t that make someone, or someones, stupidly wealthy? And likely, the payees, very very poor. Not saying it will ever happen, but as a thought experiment. Id like to know ‘who’ precisely would cash that cheque.
onlooker on Fri, 8th Apr 2016 6:13 pm
All the people on this planet have lost touch with reality. In this Americans are no worse than others. Every country going down a unsustainable path. Barring something unforeseen reality is much too grim for people to want to face it.
makati1 on Fri, 8th Apr 2016 6:39 pm
onlooker, Americans are the most deluded people on this planet. Most other people have a clear view of reality. They are not indoctrinated, brainwashed by the MSM from birth. Reality is not the price of oil nor the barrels still to be burned. Reality is how to live another day. If the whole financial system collapses today, most of the 7+ billion of us NOT in the 1st world, would not even notice. Think about it.
onlooker on Fri, 8th Apr 2016 6:44 pm
Mak, that was true for awhile but then the Indians and Chinese bought into this “American dream” nonsense and that was the final nail in the coffin of this planet. You are so right in many ways about Americans but the problem is some have envied the standard of living of Americans. So now 1/3 or so of the world population wants to live like that. That is not facing reality.
Kenz300 on Sat, 9th Apr 2016 8:24 am
If you can not provide for yourself you can not provide for a child.
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Kenz300 on Sun, 10th Apr 2016 9:18 am
Yet the world population continues to grow by 80 million more people every year…………..
onlooker on Sun, 10th Apr 2016 9:22 am
The webbot Kenz is working overtime.
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