Reservoirs at 1% Capacity: Inside the West's Farm-vs-City Water War as the Colorado River Shrinks

The Colorado River basin stretches across seven states — Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming — plus parts of Mexico, delivering water to roughly 40 million people and irrigating millions of acres of cropland. Decades of drought, a record-low winter snowpack, and the hottest March on record have combined to leave key reservoirs at levels federal officials describe as critical, according to Reuters reporting published July 15, 2026 via Insurance Journal.

In response, U.S. Bureau of Reclamation officials are weighing a proposal from the Lower Basin states — Arizona, California, and Nevada — to cut their annual river use by roughly 21% through 2028. Municipal utilities, tribal governments, industrial users (including manufacturing, mining, and data centers), and irrigation districts are all now competing for a shrinking pool of allocated water.

Near Casa Grande, Arizona, Nancy Caywood runs a 250-acre alfalfa and cotton farm that has depended on releases from the San Carlos Reservoir on the Gila River. Reuters reports that the reservoir is now at 1% of capacity, with dead fish on its bed, and that district deliveries to Caywood's farm stopped in March — even as she continues to owe a roughly $21,000 annual district assessment for water she is not receiving.

To keep farming, she has leased a neighbor's aquifer-fed fields. And with each dry year, the phone calls change. "We have hung on for almost 30 years," Caywood told Reuters. "There are people approaching you saying, 'Would you like to sell your land to put solar panels on it?'"

Water scarcity, in other words, is quietly becoming a driver of land-sale offers across the basin — not just a farming hardship.

In Pinal County, farmer Jace Miller is the fifth generation on a 107-year-old family operation south of Phoenix. According to Reuters, Miller lost most of his Colorado River priority in 2022 as senior municipal users took precedence, and more than half of his fields are now fallow. Housing developers and solar companies are actively buying up the agricultural land he leases as suburbs push outward from Phoenix.

Miller is publicly calling for a moratorium on new residential growth in the region and for federal investment in cross-country water-pipeline solutions. "You can't just keep taking water from agriculture," he told Reuters.

Scottsdale, Arizona, a city of roughly 250,000 that draws about 70% of its water from the Colorado River, is publicly hunting for new supplies. Reuters cites city council candidate Michelle Ugenti-Rita floating one option openly: buy groundwater rights directly from area farmers and pipe the water to city taps.

But Colorado State University climate scientist Brad Udall cautions that Arizona's groundwater — vast as it is — is essentially non-renewable on any human timescale. "We kind of created this monster that you've got to continue to feed," Udall told Reuters, describing the risk that municipal growth locks in a dependence on aquifers that will not replenish.

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Reuters reports that the Lower Basin's proposed ~21%/year cut through 2028 has sharpened a long-simmering dispute with the Upper Basin — Colorado, New Mexico, Utah, and Wyoming — over who should absorb the pain of a shrinking river. The disagreement, the piece flags, could end up in federal court.

On Colorado's Western Slope, near Hotchkiss, rancher Robbie LeValley told Reuters she harvested only about a quarter of her normal hay crop this year after snowmelt irrigation ran out two months earlier than usual. Regional hay prices, she said, have roughly tripled. LeValley pushes back on the framing that irrigated agriculture is the basin's problem: "We are benefit. We are not the problem."

Further west, in the Utah town of Emery — population 330 — Mayor Jack Funk told Reuters that the town's sole water source, Muddy Creek, is running at 6% of normal volume. Existing reservoir supply, he said, may last six to nine months. The town has begun testing old wells and springs against the possibility it may need to truck in water to keep taps flowing.

The Bureau of Reclamation's decision on the Lower Basin's proposed cuts is still pending. A ruling that imposes steep reductions could accelerate two things at once: interstate litigation between the Lower and Upper Basin states, and a fresh wave of Western farmers and ranchers fielding land-sale and lease offers from solar developers, homebuilders, and water-rights buyers as irrigation access tightens.

Any landowner facing that squeeze has options beyond a distressed sale to the first buyer who knocks. Understanding the value of the underlying water rights — and shopping the parcel to more than one buyer — is generally the difference between a fair price and a fire-sale price.