The last time Regina Cobb traveled east of the Kingman airport toward the Peacock Mountains, the area was mostly unspoiled desert where cattle grazed on the sparse Mojave Desert vegetation.

She had driven up the dusty rural road to store a bighorn sheep she killed on a hunt.

Returning to the area 10 months later, she was shocked that the high desert landscape of creosote and cholla was now a 850-acre pistachio farm where more than 125,000 saplings had been planted.

Along each row of waist-high saplings, long black irrigation tubes stretched out to connect the seemingly endless trees and nourish them with water.

“If you look straight down these rows it goes back as far as the eye can see,” Cobb said. “It boggles the mind how many trees are out here.”

Peacock Nuts, a consortium that includes the largest permanent crop nursery in the United States, has even bigger plans: 4,500 acres and as many as 650,000 pistachio trees.

“There’s no way we have enough water to be able to handle that,” Cobb said.

In Kingman, as in most of rural Arizona, there are no rules on groundwater pumping. As long as you get a permit, you can drill a well of any size for any purpose as long as it’s for a beneficial use. Agriculture easily qualifies, even if the crops are shipped out of state for profit.

A worker plugs holes in an irrigation line in a field of young pistachio trees at Peacock Nuts Co.'s farm in Kingman. Mark Henle/The Republic

Peacock Nuts is one of seven corporate farms identified by The Arizona Republic as major agricultural groundwater users in Arizona. They include private-equity firms, investment funds focused on agriculture, and foreign food companies, mirroring the nationwide trend of big capital driving the ag industry and leading to larger farms.

There’s no cost for the groundwater other than the cost of drilling the well and the electricity to bring the water to the surface. That’s brought companies from California, Las Vegas, Minnesota, Saudi Arabia and the United Arab Emirates to rural areas throughout the state seeking to exploit Arizona’s underground resource.

Companies use Arizona’s groundwater to grow alfalfa, pistachios, pecans or other crops and then export some of the products to other states or countries.

Cobb, a Republican representative from Kingman, said the Peacock Nuts operation is "mining our water." She said this is why she is “obsessed” with doing something about out-of-state agribusiness using up Arizona’s precious resources to profit.

“The term I heard a lot of years ago was virtual water,” said Marvin Glotfelty, a groundwater expert and consultant. “It’s not legal to export groundwater or surface water out of the state. That's by law. But you can export virtual water.”

Farms from Saudi Arabia and the United Arab Emirates doing just that have angered residents in the La Paz County communities of Vicksburg, Salome and Wenden.

“You can do that with what you generate as a product of the water,” Glotfelty said. “We don’t have the rules in place to prevent that from happening.”

Cobb wants to change that and have the state approve an emergency “irrigation non expansion” area for Kingman to limit any new agricultural wells from being drilled. It would be the fourth INA created under the state's groundwater management act.

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The state Department of Water Resources has already rejected this, effectively saying pumping hasn't drained enough water out of the aquifer to meet the standards to create a new INA.

Bruce Babbitt, the former Arizona governor who signed the landmark groundwater management act in 1980, called the state's letter to Mohave County rejecting the INA "mumbo jumbo."

"The bottom line was just, sorry, we don't have jurisdiction to help you," Babbitt said.

Tom Buschatzke, director of the state's Department of Water Resources, said the law prevents him from acting. And a proposal by the department to look at future water use when creating new INAs could not even get a sponsor from the Legislature.

"I can only look at the current rates of use," Buschatzke said. "I can't look out into the future. That's what the law says. And so I don't have the ability to project out what might happen 50, 100 years from now."

Cobb said she wants the Legislature to create new rural management districts, which could enact new regulations to limit well drilling and groundwater extraction, tailored for the unique characteristics of each rural area.

Cobb has been trying to pass water legislation for five years. All she has managed to get is a study of groundwater conditions in Mohave and La Paz counties.

As elected officials fail to act, large farms continue to flee regulation elsewhere and find land and free groundwater in rural Arizona.

“You almost feel helpless because we can’t get anything passed legislatively,” Cobb said, because legislators are scared regulation in one area will spread to other areas.

The Arizona Republic identified major agricultural water users through interviews with residents, growers and public officials across the state, through property records and well data. By analyzing more than 250,000 well-drilling records, more than 30,000 well-depth records and property records in 10 Arizona counties, The Republic compiled a list of large out-of-state companies that could be — or have been — some of the largest water takers in the state.

They are just projections. It is impossible to know how much water large farms are taking. The state doesn't require meters on wells in rural Arizona, so nobody is tracking how many gallons are pumped out. Well monitoring data is limited by voluntary participation and infrequent readings. And the large corporate farms are all new arrivals, coming to Arizona since 2012.

But well drilling records show these farms own more than 700 wells and collectively have drilled more than 200 wells deeper than 1,000 feet, allowing them to draw down aquifers more quickly and dry up shallower wells.

Combined, the seven companies own, farm or control more than 130,000 acres across the state. Though not all of that land is irrigated, if it were, it would equal nearly 15 percent of the harvested cropland in Arizona, as tallied by the U.S. Department of Agriculture.

Some grow nuts. Some grow hay. Some can draw water from nearly half a mile below ground. All have at least one thing in common: They take as much water as they want, with no limits.

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The newcomers: Peacock Nuts

Peacock Nuts LLC is a huge consortium of interests that includes Duarte Farms, which calls itself the largest permanent crops nursery in the United States, a farmer from Las Vegas and several U.S. investors who live abroad.

The operation was set up quickly. After coming together in December 2018, the group bought nearly 7,500 acres east of the Kingman Airport. The pistachio trees will eventually extend to the base of the Peacock Mountains.

Kathleen Tackett-Hicks, spokeswoman for the group, said Peacock Nuts plans to farm a maximum of 4,500 acres. Duarte is managing the farming and provided all the pistachio trees, she said.

She said concerns about water use are overblown because the property had already been approved by Mohave County for a housing project and was given a 100-year assured water supply of 13,000 acre-feet annually by the state.

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"We were taking an already approved project that had failed and we're using the water for ag purposes now," Tackett-Hicks said. "We're using what was already allocated."

Peacock was more open than other farms in sharing information. Its representative took Republic reporters and photographers on tours of the property and provided information about the farm’s water use for a legislative study on the Mohave County basins.

Tackett-Hicks touted the water-saving technology on the property, including double drip line irrigation with emitter clips to save water, along with moisture sensors throughout the property to determine the best times to water.

Peacock Nuts also didn’t bulldoze a natural wash on the property, instead electing to allow it to flow through the property and serve as a wildlife corridor, which Tackett-Hicks called unique for an agriculture project.

“From the get-go they wanted to do things right,” Tackett-Hicks said.

Kingman Mayor Jen Miles said orchard crops like pistachios also use much less water than alfalfa, which was planted on other farms north of Kingman.

Miles said she appreciated that Peacock is trying to use conservation measures like drip irrigation, but she said she’s still concerned that the expansion of agriculture in Kingman could deplete water the town relies on.

“It’s still water extraction for farming,” she said. “We must look at ways to make sure the expansion of agriculture is not going to be so fast it just depletes our aquifers.”

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The giant dairy: Riverview near Willcox

With more than 37,000 acres in the Willcox area, Riverview LLP, a Minnesota dairy, may be the largest corporate farmer in the state and the farm with the most wells.

Started in 2014 with the purchase of the Faria Dairy on Kansas Settlement Road south of Willcox, it is building a huge expansion to the southeast called Turkey Creek Dairy.

Together the company plans to manage 150,000 cattle on both properties, said spokesman Kevin Wulf.

The new Turkey Creek farm has 14,000 “calf-huts” that look like large dog houses and are used to house calves that are immediately taken from their mothers after birth. The huts are arranged in rows that are longer than football fields.

Riverview produces the majority of the food for its cattle on its properties, growing wheat, silage corn and alfalfa. Records show the company has 420 wells. More than 90 of these wells are drilled to depths of more than 1,000 feet. Its deepest well is nearly 2,500 feet deep.

The round circles of bright green crops created by Riverview's 200 center-pivot irrigation systems fall away from the road as Kansas Settlement slices north and south through the area. These emerald green circles can easily be seen from above or in satellite images.

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Wulf declined to say how much water is used annually. He said the company has reduced water usage by 25 percent since it purchased the land.

Wulf said the dairy would like to be a part of the water solution in Willcox and is supportive of water regulation in Arizona, though he couldn't say the exact rules he wants enacted.

"It has been pretty much a free-for-all," Wulf said. "There could be some things to be gained by having water regulated across the state."

Peggy Judd, a Cochise County supervisor, is a huge proponent of farming in the Willcox area, particularly the Riverview dairy. She said the companies didn’t invest millions of dollars into the area “in order to fail.”

“They don’t intend to ever leave,” Judd said. “They know there’s enough water.”

But the water pumped by commercial farms has helped dry up wells owned by residents, who worry for their future. Riverview offered to contribute money toward a new water system being proposed for the residents close to its farm, Wulf said. But that won’t stop the pumping of the aquifer.

“This is a major, major deal for this county," said Claire Miller, who lives near several farms. With tens of thousands of cattle and the company insisting on growing all of the food on its land, "you are talking a lot of water,” she said.

As a former business owner, Miller said she can see both sides of the issue. But she said she is scared by the sheer amount of water being pumped out.

“If the damn state, pardon my French, and the county do not stop handing out commercial well permits like your Christmas candy, us homeowners are going to be screwed,” she said. “I told my husband I want to move. I want to sell, that’s it.”

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The Saudi hay farmers: Fondomonte

Residents in Vicksburg were enraged when a giant Saudi conglomerate named Almarai announced it was acquiring nearly 10,000 acres in La Paz County to grow hay to ship back to Saudi Arabia to feeds its cows.

A release by the Arab News added the kicker: “This transaction forms part of Almarai’s continuous effort to supply the highest quality alfalfa hay from outside the Kingdom to support its dairy business. It is also in line with the Saudi government direction toward conserving local resources.”

La Paz County residents read that as: They want to conserve their resources by using ours.

Almarai’s subsidiary, Fondomonte, owns much of the land east of Vicksburg Road to the mountains separating Vicksburg from Salome. Large open-sided metal structures house thousands of stacks of hay and there are more structures than one can count. Access to the farm is strictly limited, with visitors required to go through security.

Fondomonte would only respond to questions in writing, but its representative, Jordan Rose, said the company owns 3,600 acres in Vicksburg and leases another 6,200. The company also leases property in Butler Valley, she said.

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Rose said the company has spent $152 million in Arizona and employs 178 people. The company is the fifth largest employer in La Paz County, Rose said, and 102 of its employees live in company housing.

Fondomonte has spent $50 million to upgrade the irrigation infrastructure and technology to significantly reduce the water usage on the farm, Rose said, adding the company wants to be in Arizona forever and be "one of the most efficient farming operations possible."

The company declined to disclose how much water it uses annually, saying use is consistent with other farming operations.

Nearby residents are calling for the state to stop issuing well permits because their wells are going dry.

“Fondomonte being a foreign company that is here taking our water, that doesn't rub well … with the residents that are out here,” said Holly Irwin, the La Paz County supervisor who represents the area. “They look at it as, you know, how come we're not doing anything here to prevent the foreign companies that are coming in here and utilizing our water shipping their products back to foreign countries.”

Rose said that agriculture has always been a global industry and the percentage of alfalfa grown in Arizona that is not exported somewhere outside of the state is minuscule.

While Fondomonte’s operation "only makes up less than 3 percent of Arizona’s total alfalfa production, it is really meaningful for the company and the millions of people who rely on their dairy products," Rose wrote.

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The middlemen: IFC and Integrated Ag

It’s not only the corporate farms that are profiting from Arizona’s underground water. The rush to drill has also brought in investment firms that prepare the land for farming, drill wells and either rent out the land or sell it.

Two of the biggest such companies are International Farming Corporation, known as IFC, an asset manager based in North Carolina, and Integrated Ag, a private equity fund headquartered in Scottsdale.

Larry Hancock, the owner of LKH Farming, rents about 2,500 acres of farmland in the Wenden area from IFC. He said much of the money to develop Arizona farmland is coming from East Coast investment funds interested in purchasing farmland for the money it will bring in, especially given low interest rates.

“These funds are buying up farm ground,” Hancock said, adding that farm real estate is seen as a good investment.

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He said the companies buy the farms with investors' money and rent it out, with the hope of keeping 5% for the company and returning about 5% to investors. If the property value appreciates, both parties can make even more, he said.

IFC came into La Paz County in 2012 when it outbid several other firms to buy nearly 13,000 acres from the city of Phoenix for $30 million during the last economic downturn. After the sale, the amount of irrigated farmland in Wenden and Salome expanded.

IFC announced last year that it was seeking to raise $1.5 billion in capital to buy large farm properties and lease them out to tenants. In February, the firm said in an SEC filing that it had raised $404 million so far. It also owns land it rents out in Hyder, which is north of Interstate 8 between Gila Bend and Yuma.

IFC declined to comment, citing a policy of not disclosing non-public information.

Integrated Ag was created in 2012 and is headquartered in Scottsdale. In 2015, Agri Investor reported that the company had a pipeline of about $200 million of investments and was planning to create a new $250 million fund to invest in distressed real estate in Arizona and Nevada.

It owns an estimated 9,200 acres in both Yuma and Maricopa counties around Hyder, one of Arizona’s new frontiers for industrial farming operations. The company also owns land in Pinal County. The company has at least 81 wells, and 34 of those are deeper than 1,000 feet.

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Michael Timony, a partner in Integrated Ag, said the company has invested $90 million in farmland and irrigation improvements in Arizona. The company turns inefficient flood-irrigated farmland into highly productive farmland with highly efficient irrigation systems that use 20 percent to 50 percent less water, he said.

He said drip irrigation is also good for organic farming and the company tries to keep its farming organic whenever possible.

"The Hyder area can support row crops, produce and permanent crops," he said. "We chose this area because of its great growing conditions and abundant sustainable water."

Mark Skousen bales Bermuda straw while working on his farm in Hidden Valley. Mark Henle/The Republic

Mark Skousen, who runs a second-generation family farm in Hyder, is concerned about the surge of well-drilling since Integrated Ag and IFC arrived in the valley.

Skousen estimated more than 30 wells have been drilled recently, adding, “nothing is protecting our water.”

“I think if they turned all those 30 wells on, our water table would drop, and our water would be expensive, and we would have less water. And we could farm less,” he said. “If they pump them all, it's whoever has the biggest straw is going to get the last drop, I guess.”

His wife, Trixie Skousen, said she fully expects their corporate neighbors will squeeze what they can out of their investments and then leave once there is no more money to be made. She said the farms don’t care about Arizona or the Hyder community.

Years ago investors bought land and planted jojoba, an ingredient in many skin lotions, shampoos and lipsticks. They struggled to make money and eventually left. Then the big date farms came in and then also left. Now she sees some of the alfalfa farms struggling.

“They come in with a big idea and sell to their investors, the investors put money in it, then they lose everything and they move on,” she said. “In the 40 years we’ve been out here there’s been a cycle of that.”

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In three hotspots: Al Dahra ACX

Al Dahra ACX is part of Al Dahra Holding, which is based in the United Arab Emirates, and the company says it is “the No. 1 forage exporter in the United States.”

It produces alfalfa, Sudan grass, and other types of hay on about 30,000 acres in the U.S., including farmlands in Arizona as well as California’s Palo Verde and Imperial valleys. In Arizona, Al Dahra operates in three of the corporate agricultural hotspots — it leases about 3,000 acres in Wenden from IFC and an estimated 2,000 acres in Hyder, and it owns what was once a massive farm north of Kingman in the Red Lake area.

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Through a company called Red Lake Ventures, the company owns 16,000 acres, though it is now farming only a fraction of that. Once, it farmed thousands of acres of alfalfa and other crops by using towering center-pivot irrigation systems that created circular green islands in the brown desert on the way out to Red Lake.

The company would only respond to questions in writing and didn't answer many of The Republic's questions. But Al Dahra said its Hualapai Valley Farm no longer grows alfalfa.

"New crops that are less water-intensive and higher value such as hemp and baby potatoes are being produced," the company said in an emailed statement. Al Dahra said some of its crops are sold in the United States and others are exported.

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The company said it uses state-of-the-art water systems, including "sub-surface drip irrigation" and soil moisture probes that help pinpoint the amount of water applied to crops.

Al Dahra said it has about 170 employees in Arizona. The company did not answer other detailed questions about its wells and how much water it uses.

"Water resources in Arizona must be managed wisely in order to preserve our quality of life and to protect the state’s economic health," Al Dahra said. "The company is fully committed to Arizona and plans to remain here for the long-term."

On its website, the company says it “continues to invest in growing its farming lands portfolio.”

Al Dahra sells hay in the U.S. and exports to countries across Asia and the Middle East. It owns and leases enough land to cultivate as much as 44,000 tons of hay per year. The company also runs three hay pressing facilities in Arizona, California and Washington.

Mary Goodman waters trees on her property in Salome. Mark Henle/The Republic

Mary Goodman lives to the southwest of Al Dahra’s fields in Wenden that are rented from IFC.

She said fields have appeared in the desert to the east and north of their home during the past three or four years. She’s seen new industrial wells appear off of Highway 60, along with two large irrigation ponds, which they’ve heard can hold 25 million gallons each.

She already had to replace one well on her property. One well is about to give out, and she’s not sure how long their remaining well will last.

“There’s no protection for this valley for water,” Goodman said. “Anybody can come out here and literally rape the valley of its water. So it’s just scary. You think you’re set here for life. This was our dream retirement home, and all of a sudden, it’s more of a nightmare.”

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Ghost pivots: Kingman Farms

Driving Stockton Hill Road north out of Kingman, the road drops down to the desert floor. On the way out to the dry Red Lake, where the dirt is so red it once stood in for the surface of Mars in a Hollywood movie, there is a peculiar sight.

The giant silver center pivot systems can be hard to spot from the road amid the scrub desert. Look hard and you can see the pivots marooned in the desert like a shipwreck.

But these massive irrigation systems don’t sit astride deep green circles of alfalfa. Instead these ghost pivots sit on weeds and land that the desert has reclaimed. The pivots look as out of place as the green alfalfa once did next to the red dirt from the dry saline lake.

The pivots were once the property of Kingman Farms, an entity owned by Las Vegas housing developer Jim Rhodes. His arrival in 2012 triggered Mohave County’s concerns about its dwindling groundwater. Before the farms came in, Mohave County had virtually no large-scale agriculture.

Rhodes, who once hoped to build tens of thousands of new homes in parts of Mohave County, began blading desert, drilling wells and installing center pivots to farm hay and other crops for export. At the peak, Rhodes owned about 34,000 acres and had shocked the community into creating plans to try to conserve its water.

Rhodes declined to comment when reached by phone.

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Groundwater studies by state and federal scientists have shown a dramatic increase in pumping since the agricultural businesses arrived. That pumping draws on groundwater that has built up over thousands of years. As it's pumped out, the scant rain that falls on the desert isn't enough to recoup the losses.

A federal study showed that in 2011 groundwater pumping in the Hualapai Basin surrounding Kingman exceeded the rate of recharge by 5,600 acre-feet annually. A state study found that in 2016, that deficit had increased to 37,600 acre-feet — enough water to supply about 113,000 average single-family households in Phoenix for a year.

Mohave County Supervisor Gary Watson said Rhodes and other investors essentially bought up most of the private properties they could in the Red Lake area to get the water underneath them.

“It hit just all of sudden, just like less than a year,” Watson said. “The farms started leveling all the land, and it was very alarming to a huge number of us who were really appalled at the size of these projects.”

Hay prices were high when Rhodes started his project but five years later the prices had dropped. The farms scaled back operations because of the expense of getting the water out, Watson said. With no power lines to the area, the company had to use diesel generators.

“They really couldn’t make any money growing alfalfa,” he said.

Several companies behind the project went bankrupt and the pivots were left in the desert to rust. But the groundwater the company pumped out is gone and won’t be coming back. And the wells drilled could always be used by the next owner.

“The threat is constantly going to be there,” Watson said.

Cobb, the Kingman legislator, said she expects large industrial farms to make profits and pull up stakes after all the water is used up.

“These aren’t local farmers. These are farmers from outside our area coming in and utilizing our resources,” Cobb said. “They are just going to suck it dry and then be gone.”

Environmental coverage on azcentral.com and in The Arizona Republic is supported by a grant from the Nina Mason Pulliam Charitable Trust. Follow The Republic environmental reporting team at environment.azcentral.com and @azcenvironment on Facebook, Twitter and Instagram.