5:00am

Wed July 18, 2012
Business

Amid Severe Drought, Colorado Farmers Brace for Losses

For more than a hundred years, northeast Colorado’s farming-dependent economy has boomed thanks to a mostly reliable supply of snow melt and runoff from the Rocky Mountains that’s channeled to a complex web of irrigation ditches and reservoirs.

But this year, historically low snow pack coupled with a searing heat wave extending from Colorado to the Midwest has left many farmers bracing for huge losses. 

‘Planning a Funeral’

A giant shiny green John Deer combine rumbles to a stop in a parched wheat field halfway between Denver and Greeley.

Out pops fourth generation farmer Dave Eckhart, who, in sunglasses and a baseball cap, is matter of fact and straight-talking, like a lot of farmers, especially when it comes to how to close this huge beast of a machine’s bulky door.

“Slam that sucker shut,” he says, eager to get back to his work.

High up in the air-conditioned cab, the wheat, onion and corn fields of sprawling Weld County unfold.  This region is one of the country’s top agriculture powerhouses; buoyed by irrigation, but not immune to a stubborn drought and an unforgiving heat wave that’s extended across the nation’s midsection this summer.

“You’ve got great prices, it could have been a really good year,” Eckhart says. “But the drought’s affected a large portion of the production areas in the US and Colorado’s no different.”

As a farmer, Eckhart doesn’t have the luxury of making snap business decisions. At the start of the year, before the drought took full hold, he had to decide how much wheat to plant, along with onions, sugar beats, and one of the most lucrative commodities, corn. 

Today, with water in short supply, he’s deciding what to keep alive.

“It’s kind of like planning a funeral,” Eckhart says. “You’ve invested the money that you needed to raise the crop, you’ve gotten to a point where you’ve got a crop established, but now you’re pulling life support, which would be the water away from it, to keep another crop or another field alive.”

In Eckhart’s case, he’s decided to pull water away from more than a third of the corn he’s planted, in favor of keeping more of his onions alive so that he can continue to supply a nearby processing plant.

Drought Takes Hold

It’s a predicament not unique to Eckhart, as farmers from Colorado to Texas grapple with one of the worst droughts since the Dust Bowl era

The lack of rain and green foliage has forced ranchers to downsize their cattle herds.  The federal government has predicted more than a third of the nation’s corn crop is now damaged, causing prices to soar.

Record heat has stressed corn crops in Colorado and across the Midwest.
Credit Kirk Siegler

That’s of particular concern to a region like northeast Colorado; where large feedlots and dairies have thrived in recent years due to stable feed prices.

“That’s sort of the tight economic web that’s drawn together,” says James Pritchett, an extension specialist at Colorado State University.

Pritchett says things could be worse, but if the drought persists into next year, hard times are ahead. 

“We’ve had some good years,” he says. “For the most part, farmers have built up good cash reserves so that they can self-insure themselves in a time when they experience a drought like this and their revenues are down.”

Trickle Down

The 2002 drought caused more than a billion dollars in losses to the industry here, according to some estimates

Nobody knows exactly how much will be lost this year.

But agriculture has been one bright spot for Colorado’s economy during the current economic downturn. Everyone from politicians to farm lobbyists say its continued health is key to the state’s economic recovery.

“If a farmer loses money on a crop then that translates into what he’s able to spend in the local economy,” says Mark Sponsler, executive director of the Colorado Corn Growers Association. “And that has a big impact in terms of economic multipliers about how the state does in terms of revenue and overall economic health.” 

Climate scientists have been predicting that droughts will be the norm, not the exception, for this region in the years ahead, as the earth warms.  But Sponsler cautions against making what he says would be rash decisions about what to plant in the future based on just one year of severe drought.

“This isn’t the first year that drought has been experienced in Colorado or across the US, and it no doubt won’t be the last,” he says.

Mother Nature’s Wrath

Back in the cab of his combine, Dave Eckhart uses a joystick to dump wheat into a semi truck that’s pulled up alongside. 

While recent rains have been a ‘godsend,” he says it’s a critical time for many of his crops, especially his corn. 

And the long term forecast isn’t that promising. 

“We’re used to hailstorms being Mother Nature’s wrath on us, where you go to bed and you have a perfect crop and you maybe don’t have anything,” Eckhart says. “The drought has been painful, it’s something that you watch over weeks, not just days, and you watch your crop, your investment disappear.”

But Eckhart knows he’s not alone.  Almost three-quarters of the country’s farm land is now under severe drought conditions.  The federal government recently freed up emergency loan money to help some eligible farmers cope. 

But farm groups say it’s still too early to tell how many people will apply, let alone qualify.