The federal government has been providing significant subsidies to the dairy industry since 1933. These subsidies are important to farmers and to the industry as a whole because they keep incomes steady during fluctuations in market prices. However, federal policies can also incentivize dairy production which increases agricultural production which have negative impacts on water resources. Here we explore the impacts of dairy subsidies on groundwater storage in Arizona. On one hand, the dry climate, abundant sunshine, and good soil make Arizona perfect for alfalfa farms, which feed the dairy cow population. However, Arizona also has very limited surface water supplies and irrigated agriculture often relies on groundwater. Groundwater use is unregulated in many parts of the state creating the potential for unsustainable pumping to support water intensive crops like alfalfa. We present a retrospective analysis of alfalfa and dairy expansion across the state using datasets from CropScape and the United States Department of Agriculture (USDA). We also explore how much alfalfa is being irrigated by renewable versus nonrenewable sources using data from the Arizona Department of Water Resources (ADWR). Finally, we explore connections between alfalfa and groundwater levels. Preliminary results show a correlation between increased alfalfa growth and declining water levels in areas where groundwater is alfalfas’ main irrigation source. Future work will explore spatial patterns in alfalfa expansion and groundwater declines relative to different regulatory frameworks across the state.