* MillerCoors partners with farmers to save water

* Non-profits push "water as a crop" program

By Carey Gillam

BLOOMING GROVE, Texas, June 30 (Reuters) - Texas cattle rancher Gary Price knows what it is like to worry about water.

With 2,500 acres of rough range land situated about an hour south of Dallas, Price relies on rain-fed soils to provide the hearty grass forage he needs to fatten his cattle. When the animals are sold at grocery meat counters, every pound of flesh spells potential profit for Price's family.

"Ranching is really mostly about water and grass. So you've got to look at ways to control water," Price said in an interview at his 77 Ranch, where temperatures over 100 degrees drive his cattle into the shade every day and have spurred swarms of hungry grasshoppers.

A recent stretch of devastating drought in Texas and fears of ongoing water scarcity across many parts of the United States are pushing Price and others in ranching and farming into new frontiers of water conservation.

In Price's case, that means teaming up with a corporate partner, water-thirsty MillerCoors Brewing Co. The second-largest U.S. brewer has been helping him build fences for new grazing rotations and plant native prairie grasses that grow thick, retain rainwater and limit runoff.

Corporate America's concerns about water availability are not new, but of late they are growing. More than 40 international corporate leaders met in June in Rio De Janeiro to reaffirm the need for concerted action to address a growing water crisis.

Across the globe, water consumption has tripled in the last 50 years, and at least 36 U.S. states are anticipating some areas of water shortages by 2013, according to the Environmental Protection Agency. Farming alone consumes 70 percent of all fresh water used around the world.

With that in mind, public and private interests working on water conservation have started pushing partnerships with farmers and ranchers to protect water quantity and quality. The work is starting in Texas but is intended to spread nationwide.

INVEST IN FARMING PRACTICES

In May, the U.S. Department of Agriculture said it would fund $2.8 million for improved land and water management practices like those on Price's land, providing incentives to farmers in an area of Texas that targets 152,309 acres.

"It is not going to be one organization or one company or one government that is going to solve this problem. It is going to take all of us collectively," said Kim Marotta, MillerCoors director of sustainability.

MillerCoors acted after an internal assessment showed that three of its eight U.S. breweries, including one in Fort Worth, Texas, faced potential water shortages. The company is working on water conservation at its breweries, but also is identifying large agricultural water users near its breweries and asking to partner with them on conservation.

"We're just starting that work," Marotta said. "You have to start farm-by-farm."

The moves come as water gains stature as an critical asset, a must-have resource that everyone from farmers to investment fund managers need to control. At MillerCoors, for example, it takes about 4 gallons of water to make 1 gallon of beer.

The Texas efforts follow the 2011 drought that cost state agriculture more than $7 billion in losses. Last year was the driest year in state history. While some parts of Texas have since received rain, the drought appears to be spreading to the U.S. Midwest and to parts of the southern Plains again as scorching heat and cloudless skies burn up crops and pasture.

"You have to do more with less," said Ken Klaveness, executive director of Trinity Waters, a non-profit conservation group focused on the 512-mile-long Trinity River, which supports water needs for over 40 percent of Texans.

"If you want your business to be here 15 to 20 years from now, you need to be proactive," Klaveness said.

Projects with farmers can range from planting of grasses with deeper root systems that hold water and reduce erosion to installing high-tech monitoring stations in pastures.

FARMERS, RANCHERS CHANGING TECHNIQUES

Farmers are being asked to change irrigation techniques and equipment and plant a mix of different crops. Ranchers are asked to alter the ways they rotate their cattle grazing.

MillerCoors is also working with 800 barley farmers in Idaho to alter their irrigation practices in ways that use less water. MillerCoors will not disclose how much it is spending, but Marotta said the effort was a high priority.

The company has worked with Trinity Waters and groups like the Sand County Foundation, a Wisconsin-based non-profit that works with landholders to improve natural habitats.

Though he has long worked on ways to preserve water on his ranch, Price says creating a 40-acre wetland and planting more native grasses in recent years with the outside funding has helped make him better prepared for the Texas droughts.

Three of Price's pastures now sport large metal contraptions containing computers that monitor rainfall and runoff through varying types of grass. Though results are not yet in, the hope is that scientists monitoring the results will be able to determine which grasses are most effective and approximately how much water they help prevent from running off.

Price also has new fencing and a showcase variety of the water-trapping native prairie grasses. The grasses grow so thick and lush even with scarce rainfall that his pastures have a marked distinction from those of his nearby neighbors who have cultivated more typical bermuda grasses.

By preventing erosion and runoff when it does rain, and holding more moisture in the soil, Price is improving his ability to feed his cattle without costly supplemental hay. He is also reducing sediment contamination of nearby streams.

Klaveness said many other landowners are moving to make similar improvements on their lands, including more than 100 who have applied for government grants for the work.

"We have over 200,000 acres of landowner interest we are getting ready to mobilize," he said. "The water we have is finite. We can't make more."