Alfalfa is a major feed crop widely cultivated in the United States. It is the fourth largest crop in acreage in the US after corn, soybean, and all types of wheat. As of 2003, about 48% of alfalfa was produced in the western US states where alfalfa ranks first, second, or third in crop acreage. Considering that the western US is historically water-scarce and alfalfa is a water-intensive crop, it creates a concern about exacerbating the current water crisis in the US west. Furthermore, the recent increased export of alfalfa from the western US states to China and the United Arab Emirates has fueled the debate over the virtual water content embedded in the crop. In this study, I analyzed changes of cropland systems under the three basic scenarios, using a stylized model with a combination of dynamical, hydrological, and economic elements. The three scenarios are 1) international demands for alfalfa continue to grow (or at least to stay high), 2) deficit irrigation is widely imposed in the dry region, and 3) long-term droughts persist or intensify reducing precipitation. The results of this study sheds light on how distribution of crop areas responds to climatic, economic, and institutional conditions. First, international markets, albeit small compared to domestic markets, provide economic opportunities to increase alfalfa acreage in the dry region. Second, potential water savings from mid-summer deficit irrigation can be used to expand alfalfa production in the dry region. Third, as water becomes scarce, farmers more quickly switch to crops that make more economic use of the limited water.