The lake has dropped to 1,080 feet above sea level this year — down almost the width of a football field from a high of 1,225 feet in 1983.
A projected level of 1,075 feet in January 2016 would trigger cuts in water deliveries to Arizona and Nevada.
At 1,000 feet, drinking water intakes would go dry to Las Vegas, a city of 2 million residents and a destination for 40 million tourists per year that is almost completely dependent on the reservoir.
That has the Southern Nevada Water Authority spending more than $800 million to build a 20-foot-diameter pipe so it can keep getting water.
The region is also stressing water conservation, prohibiting grass lawns for new homes and fountains at businesses. Officials say the overall effort has reduced consumption 33 percent in recent years while the Las Vegas area added 400,000 residents.
But severely restricting water use for swimming pools or lawns in a city like Phoenix wouldn't make much difference, said Kathryn Sorensen, the city's Water Services Department director, because conservation efforts need to be applied across the western U.S.
"The solution can't come just from municipal conservation; there isn't enough water there," she said.
If cuts do come, they'll test the agreements forged in recent years between big, growing cities and farmers.
In California, home to 38 million residents, farmers in the sparsely populated Imperial Valley in southeast California have senior water rights ensuring that they get water regardless of the condition.
Kevin Kelley, general manager of the Imperial Irrigation District, defends his agency's position at the head of the line and dismisses the idea that water should go to those who can pay the most or make the most compelling economic argument.
Imperial Valley farmers grow some 200 crops, Kelley said, from alfalfa to cotton and celery to zucchini. "There has to be a place in a diverse economy and a diverse Southwest for a place like this that grows food and fiber year-round," he said.
In Arizona, reduced deliveries of Colorado River water would largely affect the Central Arizona Project, which manages canals supplying 80 percent of the state's population. A tiered system means farmers would face cuts first, shielding Native American tribes and big cities.
Bagnall, who owns Morningstar Farms in Coolidge, Arizona, worries about the future of farming in the region. Tighter supplies mean there will be less farming and fewer dollars going to agricultural services like fertilizer suppliers.
"Eventually," he said, "the prices are going to hit the consumer. Sooner or later, it's got to go up. So it's just a domino effect."
Associated Press writers Brian Skoloff in Coolidge, Arizona, and Felicia Fonseca in Flagstaff, Arizona, contributed to this report.