What Does Investment in Water Through Almond Groves Mean?

January 9, 2016 1:59 PM

I have read that Michael Burry (the character played by Christian Bale in "The Big Short" ) is investing in water through the purchase of almond groves in California. Can someone explain to me how this is done?"
posted by goalyeehah to Work & Money (4 answers total)

Best answer: He appears to be betting on extended droughts (and accompanying rise in food prices) by focusing on land that contains actual water rather than land that merely has water rights.
(Presumably on the idea that water rights to a shared source may not survive a future water shortage)
posted by madajb at 2:15 PM on January 9, 2016 [3 favorites]

It's also likely tied into almonds using a huge amount of water to grow.
posted by Thorzdad at 3:31 PM on January 9, 2016 [1 favorite]

Almonds get roasted in debate over California water use

California almonds are becoming one of the world's favorite snacks and creating a multibillion-dollar bonanza for agricultural investors. But the crop extracts a staggering price from the land, consuming more water than all the showering, dish-washing and other indoor household water use of California's 39 million people.

There is a lot going on in California these days in terms of water usage. Debate about lining the canals in Southern California to reduce seepage (which would rob Mexican wells across the border of replenishment), farmers in Southern California selling water (for residential/commercial usage) to San Diego County because it is more profitable than using the water they have a right to on crops, and so on.

You could read "Salt Dreams" to get some background on water usage in Southern California.
posted by Michele in California at 3:46 PM on January 9, 2016 [1 favorite]

madajb has it. Going back to 2010, here's an interview with Burry about what he's trying to do: he's looking for water "on site," and directly buying that agricultural land.
posted by mandolin conspiracy at 4:05 PM on January 9, 2016