On the face of it, ranchers make their living selling beef. But in many ways, what they're really selling is water converted by Mother Nature into grass, which is then converted into beef.

For that reason, laws that govern water distribution are often the most important legal issue facing any ranch. That's particularly true in the arid West where available water has been cut by drought and surging population growth is pitting urban centers against agriculture for what's left.

BEEF asked three water law specialists for their views on water law. Here are some issues they raised.

Us It Or Lose It

Water law from the Great Plains to the Pacific Ocean is largely governed by the law of prior appropriation, which fixes water rights on a first-come, first-served basis. This provision often helps ranchers because their water rights predate those held by cities and towns. In a crunch, the rancher gets the water.

But those rights can be forfeited under “use it or lose it” provisions found throughout the West. If a ranch goes too long without using all or part of its water rights — and the statutory period varies from state to state — the ranch can lose the unused rights. This problem tends to show up during drought when ranchers sell off stock and need less water.

“I've seen absolutely tragic circumstances where ranchers have ceased using their water rights and then found they no longer had them,” says Rick Knuth, a Salt Lake City, UT, attorney specializing in water law. The loss of water rights creates two problems. First, the ranch has less water when it needs it. Second, the loss of water rights reduces the value of the property.

“There are a number of ways to prevent this,” he adds. “Use all the water all the time, or use all of it at least once during the statutory period. You can also lease it to somebody else who will use it. Or you can apply to the state engineer for an extension of the statutory period for not using the water.”

If a rancher is lucky, under-use won't be discovered. But there's always the danger a rancher will inadvertently call it to the attention of state officials. For example, if the rancher decides to sell his land, the state may audit past water use.

“At that point, the state will come in and count up the number of irrigated acres and the number of cows,” says Dan Jensen, another Salt Lake City water law attorney. “They will use that as a basis for determining the water to which the land is entitled.”

Over-Appropriation Of Rights

In the West, there isn't as much water as there are water rights. “Paper water rights exceed the supply,” Jensen says. “If everybody got what they were legally entitled to, there would probably be a meltdown. There's not that much water to go around. We have this problem in Utah and it's probably the same throughout the West.”

One problem when water rights exceed the supply is that it gives state officials an incentive to invoke the use-it-or-lose-it provision to try to get water rights more in line with actual supplies.

Temporary Transfer

In a drought, temporary transfer of water rights makes a lot of sense. Ranchers who don't need as much water because they've reduced the herd can earn needed cash by transferring unused rights for a specified period of time. Meanwhile, the water goes to cities and towns struggling to meet demand.

But the laws in many states make this a messy process.

“This is an area where tweaking the water laws could benefit everyone concerned,” says Reed Benson, University of Wyoming associate professor of law. “It can be a procedural nightmare to get these temporary transfers approved.”

This problem varies by location, Bensen says. For instance, transfers are quick and easy in areas served by the Colorado-Big Thompson Water Project along Colorado's Front Range of the Rocky Mountains. In other parts of Colorado and the West, however, it can be time-consuming, burdensome and by no means certain that a temporary transfer will be approved.

“More flexibility in the system can be one of the most effective ways of dealing with drought,” Benson says. The alternative is to try to boost water supplies in a drought, a solution that's probably doomed to fail.

“It takes a long time to build new impoundments,” Benson says. “By the time you get them ready to store water, the drought is over. You want something that works while you're still in the drought.”

Doug McInnis is a freelance writer based in Casper, WY.

A Costly Shift

Selling water rights to cities and towns is one way to shore up ranch finances by generating quick cash that can be used to pare debts. But the sale of water rights also creates long-term problems for the ranch industry.

As rights are sold, more and more ranchlands have no water rights. This creates a problem for neighboring ranchers who may later want to expand their holdings, but don't want to buy land without water rights.

“For the farmers and ranchers who sell rights, it may allow them to retire debt-free,” says Reed Benson, University of Wyoming assistant professor of law. “But it can raise concerns for people staying in agriculture.”

The trend toward selling water rights has been gaining steam in populous parts of the West, such as the Front Range of Colorado's Rocky Mountains, Reno, NV, and large parts of California.

“A lot of cities are finding the most cost-effective approach to obtaining a reliable water supply is to find a grower or rancher with senior water rights in a place where the water can be moved easily to the city,” Benson says.

Thirsty 'Burbs

Suburban growth can strangle a ranch, often by nibbling away at underground water supplies. For instance, a ranch may be adjacent to dozens — even hundreds — of ranchettes. These are suburban home sites on 20+ acres. As ranchettes pump ground water, they lower the aquifer level and raise the rancher's cost to pump water to the surface, says Salt Lake City attorney Rick Knuth.

A surburban drain on the water table also worsens alkalinity.

“Salt water is heavier than fresh water, so salt tends to fall to the bottom of an aquifer,” he says. “As the water level falls, the water you're drawing up is increasingly alkali. Alkali is a consequence of using water faster than the recharge rate and suburban development can accelerate the problem.”

Vigilance Is Needed

Suburban development may inadvertently encroach on a rancher's legal rights to water by disrupting vital irrigation systems. To guard against that, ranchers need to keep tabs on developments that might impact their supply.

“I had a Fortune-500 client building a suburban research campus. We got within a week of closing and discovered there was an underground irrigation pipeline under the footprint of the main building,” says Salt Lake City attorney Rick Knuth. “There was no record of it. It didn't show up on surveys or in the recorder's office.

“We had to reroute the pipeline and deal with the farmer who had rights to the water. If it had been a working ranch, the development could have created a mess. If we hadn't discovered the line, someone could have put a building on top of it,” he says.

Knuth says some home builders see nothing wrong with filling in an irrigation ditch, particularly if it doesn't show up on a title report. “But just because it doesn't show up on the records, doesn't mean the water right isn't good,” he says.

“The rancher could win in the end, but in the short term, he could find himself critically short of water during the irrigation season,” Knuth says. “The secret of being a rancher in periods of encroaching suburbanization is eternal vigilance.”