As COVID started to spread, farmers and large cities in Southern California were hit with another blindside last March. Fires, drought, and the planting season drove up the price of California’s water market, over 220 percent in just three months. Crops failed and pastures were lost. In September, CME Group Inc vowed to create a new market to help with the risk of these price swings. Last month, the first contract connected to the future price of California’s $1.1 billion water market was inked.
-Written by Will Rinehart, a senior research fellow at the Center for Growth and Opportunity at Utah State University.