Groundwater Management and Agricultural Crop Choice in the Eastern High Plains of New Mexico

This research report covers two studies, related but focused on two different aspects concerning agricultural crop choice and groundwater management in the New Mexico Eastern High Plains. The first study examines the potential impact of intensive livestock operations (mainly dairy) on the neighboring cropland use and irrigation water demand in the New Mexico High Plains, one of the agricultural hotspots in the US Southwest. Field-level crop choice data computed from high-resolution remotely sensed imageries were matched with nearby livestock farm characteristics. The analysis deploys a fixed-effects multinomial logistic framework to control for unobserved spatial heterogeneities and temporal trends. The results show that neighboring dairy and cattle operations reduce the probabilities of growing hay, corn, and winter wheat, but increase that of growing sorghum. The findings are robust with respect to the choice of neighborhood size and climatic factors. Based on the estimated crop choice responses, the induced impact on irrigation water demand was derived. The results suggest that for a one-standard-deviation increase of dairy and cattle farms within 10 km, the total crop irrigation water demand increases by 5.3% (95% confidence interval, [4.6%, 6.1%]), which is a significant impact on groundwater aquifers. The second study aims at understanding how groundwater aquifer decline affects the likelihood of cropland switching back to grassland in a crop agriculture setting with little livestock production. Taking Union County of New Mexico as a case study, field-level observations and high-resolution remote sensing data are integrated to explore the impact of groundwater decline in a regression analysis framework. The results show that cropland has been slowly but permanently switching back to grassland as the groundwater level in the Ogallala Aquifer continues to decline in the area. Specifically, for a one-standard-deviation decline of groundwater level (36.95 feet or 11.26 m), the average probability of switching back to grassland increases by 1.85% (the 95% confidence interval is [0.07%, 3.58%]). The findings account for the fact that farmers usually explore other options (such as more drought-tolerant crops and land idling and rotation) before switching back to grassland permanently. The report concludes by exploring relevant policy implications for land (soil) and water conservation and regional economic development in the long run.