San Joaquin Valley Water Supply Forecast Upgraded to Above Normal

Nasdaq Veles California Water Index

(NQH2O) $408.67 -2.41 {-0.59%} as of April 16, 2025

Water Market Prices and Trading 4/7/2025 – 4/11/2025

Last week, the Department of Water Resources (“DWR”) released updated water supply indices for the Sacramento Valley and the San Joaquin Valley. The Sacramento Valley Index increased from above normal to wet. This water year flows and precipitation in the Sacramento Valley have been higher than average, while snowpack has remained near average. The San Joaquin Valley Index increased from dry to below normal. This water year flows and precipitation in the San Joaquin Valley have remained below average despite an above average February and a near average March. Snowpack in the region remains below average at 73% in the San Joaquin River region and 78% of average in the Tulare Lake region.

Project allocations were last updated at the end of March to 40% for South of Delta (“SOD”) contractors. These updates accounted for the higher-than-average rainfall that occurred in February and March. SOD contractors are expecting a final increase to allocations. Above normal conditions last occurred in the San Joaquin Valley in 2024 and 2010. In 2024 SOD allocations were 40% to 50% for the State and Central Valley Projects and in 2010 allocations were 45% to 50%.

Market participants are holding out for a final increase in allocations before confirming spot market transfers. If allocations are increased, it will likely occur at the end of April. Market participants are waiting to confirm transfer prices and volumes until early to mid-May, after the date that final allocations are typically announced.

In April of 2024 spot market prices for SOD transfers ranged from $150/AF to $375/AF for 5,500 AF of transfers. The lower valued transactions were for carryover supplies from 2023, while the higher valued transactions were for 2024 supplies. Spot market transactions so far in 2025 have been priced similarly, although all transactions so far have been of 2024 carryover supplies.

If the San Joaquin Valley’s water conditions remain above normal, market activity SOD may look similar to last year. In 2024, prices during the peak season ranged from $185/AF to $550/AF, with over 86,100 AF transferred. Comparatively, in 2023 (Wet) prices were lower, ranging from $5/AF to $150/AF for a total volume over 139,400 AF, and in 2022 (Critical) prices were highe,r ranging from $630/AF to $2,000/AF for a total volume over 60,800 AF.

Current Trading Trends – Surface Water

Volume Traded:

13,935 AF Traded YTD

16% of Average Historical Volume Traded YTD

Number of Transactions:

7 Transfers Completed YTD

Latest Transfer Prices South-of-Delta (SOD):

$185/AF

South-of-Delta (SOD) Market Outlook: Spot market prices in 2025 have ranged from $185/AF to $375/AF. These prices reflect the value of carryover supplies. Prices for transfers of 2025 are currently in discussion as participants are entering negotiations for transfers to occur in May.

North-of-Delta Market (NOD) Outlook: Water transfer activity is expected to be minimal as the NOD region has high capacity and allocations. A couple of transfers are in negotiation for later in the year.

NOD-SOD Transfers Limited: Market participants are initiating discussions about potential transfers for 2025, including crop idling, reservoir release, and groundwater substitution transfers. Water transfer activity may increase in the summer when the through-Delta transfer window opens. Prices and trading volumes will depend on Delta conditions, reservoirs storage and project water allocations.

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