COLUMBIA COUNTY — Decades ago, John Andrews’ late father went broke farming potatoes. He lost the family farm, and never wanted his son in the same business.
And yet, there Andrews stood this spring on a scrabbly hill near Starbuck, Wash., looking over his family’s dominion — a 9,700-acre farm and ranch at the edge of the Palouse prairie.
Andrews and his wife, Sandy Conklin, pointed with pride to the meandering Tucannon River at the valley bottom, the towering bales of straw the local pulp company had arranged on their land and their grain silo, the tallest structure in sight.
“I’m 71. We enjoy it here so much,” Andrews said, through a thick salt-and-pepper mustache. “Right now, we’re a little on edge. We need the rain.”
More than ever, the couple relies on it. This spring, Andrews and other members of their farm partnership sold their water rights for more than $2 million to the Crown Columbia Water Resources company, a private-equity backed firm investing in Washington water and aiming to build a huge private water market for the Columbia River basin.
For investors like Crown, water rights are seen as an increasingly scarce and valuable commodity.
But critics worry investment by private interests could promote speculation and consolidation of a public resource as the climate warms and the state’s population booms.
Crown’s interest in water comes as many of Washington’s farmers approach retirement age, their industry consolidates and development threatens rural landscapes.
For farmers, water rights are valuable assets as they grapple with an agricultural economy shifting beneath their feet. Andrews and Conklin say the sale to Crown will allow them to live out their years on the land they love.
Space in the hills above the Tucannon
On a spring morning on the farm, three cowboys trotted horses around a corral, organizing about 500 Angus cows for transport from their Tucannon lease to summer grazing land elsewhere.
Chatty, Andrews delighted in having the cowboys around.
“This is a lonely ranch. Most of the time you’ll never see anyone on this ranch,” he said.
That hadn’t been the intention.
Years ago, Gary Grendahl, Andrews’ stepbrother, convinced him to leave his suburban home in Bonney Lake and head east to Starbuck, Wash., population of 130, to farm together.
The two men formed the Tucannon Ag Partnership, LLC., with a third partner, Steve Truesdale, and in March 2015 spent nearly $4 million on the 9,700-acre property, purchasing the land from the scion of the Pendleton Woolen Mills Company.
Six months later, Grendahl suffered a heart attack while driving his tractor, Andrews said.
“Most people who were in this situation, if their stepbrother passed away, they’d give up,” Conklin said.
But the pair have fallen in love with farm living, the solitude of their treeless landscape, friendly Starbuck and the rhythm of four distinct seasons.
“People say money can’t buy happiness. There is something money can buy: space,” she said.
Washington’s aging farmers
The faces behind Washington’s farms are wrinkling.
The average age of a Washington farmer is 58.1 years, up from 56.8 in 2012, according to the Census of Agriculture. Meanwhile, farmers under age 44 make up less than 18 percent of those in the business.
The years ahead will be defined by “high transition,” said Marcia Ostrom, an associate professor in the School of the Environment at Washington State University.
That represents an opportunity for investors in farms, land and water.
Older farmers often don’t have relatives interested in farming, Ostrom said. Their retirements are often tied to farm assets. Younger farmers often find it difficult to build capital to enter a high-cost industry.
“When we have farmers transitioning, they need someone to buy their farm or they need to sell their land for development,” Ostrom said, adding that some also lease land, donate it or sell to other farmers. “The big question is whether the land will be kept in farming.”
Meanwhile, developers are hungry for land, farms are consolidating and conservation programs aiming to retain the state’s farmland only do so much.
Water rights offer farmers another option.
“It’s a way to generate some revenue without selling their land outright,” said Alan Kottwitz, chair of the Walla Walla County Water Conservancy Board, which approved the Tucannon water transfer. “Water is a finite commodity, just like land. God’s not making any more of it.”
Selling water downstream
After Grendahl’s death, Andrews scrambled to plan for the agricultural partnership’s future.
Maintenance on the partnership’s irrigation system was expensive and time consuming. Growing irrigated corn or vegetables didn’t make economic sense. To better control costs, the partnership committed to wheat, which doesn’t require irrigation.
The farm is just miles from a grain terminal on the Snake River, where barges haul bushels of soft, white wheat for export to Asia, where it’s made into noodles.
Farming dryland wheat wouldn’t produce record yields, but it would put the ranch on firm financial standing, Andrews reasoned. He could pull in additional revenue by leasing land for grazing and storage for the nearby pulp company.
The partnership owned a pump house for groundwater and had a claim to Tucannon River flows and those of a tributary creek. They decided to advertise the water rights in an agricultural publication.
“The phone rang off the hook,” Andrews said.
Farmers inquired about buying portions of the water rights. But Andrews knew each complicated transfer would cost thousands in consultancy and legal fees.
Crown Columbia company had an experienced water lawyer, Mark Peterson, and the company was willing to write big checks for the entirety of the farm’s water rights.
“It was a pretty easy solution,” Andrews said.
In July 2018, Crown Columbia paid nearly $353,000 for the water right on Kellogg Creek, according to real-estate excise tax documents.
This March, the company paid nearly $1.69 million more for groundwater and flows in the Tucannon River.
Crown Columbia envisions the water could aid fish habitat projects on the river and could be sold or leased downstream in the Snake and Columbia rivers for a profit, Peterson said.
The firm’s attempts to accumulate water have drawn concern elsewhere. Methow Valley residents and farmers objected to a similar deal from which Crown ultimately withdrew. They worried water sold would never return to their community because it’s more valuable elsewhere. Some were skeptical of Crown Columbia’s investment backing and questioned whether private companies should be able to take large stakes in water, a public resource.
Andrews acknowledged that Crown stands to profit. “Twenty years from now, water’s going to be worth a lot more,” he said.
But he describes the deal as a win for everyone.
Water left in the Tucannon River could help local fish. The flows will meet economic needs downstream, which is good for the state’s economy, he said.
And the partnership would likely have sold off some of its land if not for the water deal, which paid down much of its mortgage. This helps preserve their rural way of life.
“This takes the pressure off,” Conklin said.