The largest dairy company in the Persian Gulf, Co Almarai, based in Saudi Arabia, spent $31.8 mln to buy land in California to provide your business with hay from alfalfa.

1 790 acres of land were purchased through Fondomonte California LLC owned by Almarai and is located in the Blight in the Southeast U.S. state. The purchase was financed with own resources of the company, the company said in a statement to the Saudi stock exchange.

Almarai, which already owns the land in Arizona, reported that the purchase was part of ensuring their companies with high-quality hay from abroad, in accordance with the policy of the Saudi government.

Saudi Arabia is reducing its production of crops and forage due to the lack of water resources in the desert Kingdom. Cultivation of green fodder will end in the country in the next three years, stated in the December statement of the Cabinet of Ministers.

Almarai costs will increase by 200 million riyals ($53 million) this year because of the ban on green fodder, this amount will increase each year until the company begins to import its entire green fodder by 2019.

The purchase of land takes place at a time when California itself suffers from water shortages. In the state of the fourth year is a drought, forcing residents and companies to reduce the use of water.

The drought in California, is projected to cost the state's economy is approximately us $2,74 billion last year, farmers had to be left fallow 542 000 acres due to dry conditions and difficulty obtaining water for irrigation, according to a study by the University of California.

Source: Thomson Reuters