For years, the water table has been dropping beneath thousands of acres of desert farmland in western Arizona, where a Saudi-owned dairy company has been allowed to pump unlimited amounts of groundwater to grow hay for its cows.
But the company and other landowners in the area will now face limits under a decision by state officials to impose regulation.
Arizona Gov. Katie Hobbs said Monday that her administration is acting to “crack down on the out-of-state special interests that are pumping our state dry while Arizona families and farmers suffer.”
Fondomonte, part of the Saudi dairy giant Almarai, is by far the largest water user in the area, using dozens of wells to to irrigate alfalfa that it ships overseas to the Middle East.
After conducting a review, the state Department of Water Resources designated the Ranegras Plain area, located 100 miles west of Phoenix, as a new “active management area” to preserve the groundwater.
This isn’t the first time the Democratic governor and her administration have used this approach to curb excessive pumping in a rural areas. In January 2025, her administration similarly established a new regulated area to limit agricultural pumping around the city of Willcox in southeastern Arizona.
Hobbs pointed out that some residents’ wells have gone dry as water levels have plummeted in the Ranegras Plain, and that the land has been sinking as the aquifer is depleted.
“Unlike politicians of the past, I refuse to bury my head in the sand. I refuse to ignore the problems we face,” Hobbs said Monday in her state of the state address. “We can no longer sit idly by while our rural communities go without help. They deserve solutions and security, not another decade of inaction and uncertainty.”
The state’s action will prohibit landowners from irrigating any additional farmland in this part of La Paz County and require those with high-capacity wells to start reporting how much water they use. It also will bring other changes, forming a local advisory council and requiring a plan to reduce water use.
State officials reached the decision after receiving more than 400 comments from the public on the proposal, the vast majority in support. Tom Buschatzke, director of the Arizona Department of Water Resources, issued the decision, saying the future of residents and local businesses “depends upon protecting the finite groundwater resources.”
According to state data, water levels in wells in parts of the area have dropped more than 200 feet over the last 40 years, and pumping has increased over the last decade.
Some residents who spoke at a hearing last month said it’s wrong that Fondomonte gets to use the water to grow hay and export it across the world. Others said they don’t see any problem with having a foreign company as their neighbor but believe farms must switch to less water-intensive crops.
Following the state’s announcement, Fondomonte said in a written statement that it is “committed to progressive, efficient agricultural practices,” supports the farming community, and “has invested significantly to bring the latest technology to conserve water” on its farms. The company also said it would comply with state and local regulations.
The company currently faces a lawsuit filed by Arizona Atty. Gen. Kris Mayes alleging that its excessive pumping violates the law by causing declines in groundwater, land subsidence and worsening water quality. That lawsuit is set to continue while the state also imposes its new regulatory limits.
Holly Irwin, a La Paz County supervisor who for years has pushed to protect the area’s water, said she’s pleased the state finally acted “to stop the bleeding that threatens the vitality of our community.”
“It’s a big win,” said Irwin, a Republican. “It’s going to prevent other megafarms from being able to move into the area and set up the same type of operation that Fondamonte has going on right now. And it’ll prevent them from expanding.”
Fondomonte started its Arizona farming operation in 2014. Saudi Arabia has banned the domestic farming of alfalfa and other forage crops because the country’s groundwater has been depleted. As a result, Saudi companies have been buying farmland overseas.
A lawyer for the company has said it owns 3,600 acres in this part of Arizona. The company also rents 3,088 acres of farmland and 3,163 acres of grazing land in the state.
In addition, it owns 3,375 acres of California farmland near Blythe, where it uses Colorado River water to irrigate alfalfa fields.
Efforts to address the depletion of groundwater present complex challenges for communities and government agencies in Arizona, California and other Western states, where climate change is exacerbating strains on water supplies.
Arizona’s current groundwater law, adopted in 1980, limits pumping in Phoenix, Tucson and other urban areas. But those rules do not apply to about 80% of the state, which has allowed large farming companies and investors to drill wells and pump as much as they want.
Since Hobbs took office in 2023, she has supported efforts to address overpumping. In one step intended to rein in water use, she terminated Fondomonte’s leases of 3,520 acres of state-owned farmland in Butler Valley in western Arizona. That decision followed an Arizona Republic investigation that revealed the state had given Fondomonte discounted, below-market lease rates.
When she ended those leases, Hobbs said Fondomonte “was recklessly pumping our groundwater to boost their corporate profits.”
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