Unsustainable groundwater extraction has led to serious water supply and land subsidence issues in the US West. Most states have imposed strict groundwater regulations including the 2014 passage of California’s Sustainable Groundwater Management Act (SGMA). What will restricting unsustainable groundwater extraction do to crop production in the US West? In this paper, we couple a hydrology model, crop model, land-use model, and economic model to explore farmers’ optimal adaptive strategy for coping with water stress enhanced by stricter groundwater extraction limits. We find that the optimal adaptive response differs by state and comprises a portfolio of strategies including (a) deficit irrigation; (b) changes in irrigated cropland; (c) the movement of crop production to other states; and (d) a fall in the total production of crops in the US West. This work emphasizes the importance of system feedbacks and how deficit irrigation and interstate trade can help mitigate the full brunt of impacts to crop production.