This article was published on: 02/10/20 12:00 AM
Farmers and agricultural product suppliers hit by downturn
By Michael Kohn
Inside a low-slung building at the Jefferson County Fairgrounds it was standing room only for presentations that would give insight into how much water would be available to farmers in 2020.
Mike Britton, general manager for the North Unit Irrigation District, explained a diagram that showed the water levels in the area’s reservoirs.
“We’d like to see them all a little fuller,” Britton told the crowd of mostly farmers and agricultural equipment suppliers at the Central Oregon Farm Fair. “But we haven’t seen seasons where we had wet season after wet season after wet season. We have a good snow and wet and then we’ll be dry for three or four years.”
This winter, a weak snowpack in the Cascades and extremely low water levels at Wickiup Reservoir will result in lower water allotments to North Unit patrons, said Britton. That’s a bitter pill to swallow following last year’s reduced allotment, which forced farmers to fallow 20% to 30% of their acres, lowering revenue for both farmers and others in the agriculture equipment supply chain.
Mike Kirsch, a farmer who produces grass carrot and potato seeds, is among those preparing for another season of water rations. Pump backs, center point irrigation systems, highly-efficient nozzles and other on-farm improvements have been installed on his 2,000-acre farm to make the most out of every drop of water. But the water shortage will still affect his bottom line.
“If you have to leave a quarter of your income fallow, there’s that much less revenue,” said Kirsch, who runs Madras Farms Co. with his father, Tim Kirsch. “I don’t care what business you’re in, it’s a tough situation and we have to focus on higher-value crops and be more efficient with water.”
North Unit, a junior water rights holder in Central Oregon, will suffer another water shortage this year because Wickiup Reservoir, which supplies water to the district, is expected to start the year three-quarters full. When Wickiup starts the irrigation season less than full, the irrigation district must lower the amount of water it delivers to each farm.
The water shortage is rippling across Jefferson County, affecting tractor dealers, fertilizer sellers and other local businesses, said Kirsch.
“Everyone is tightening their belts and making tough decisions on how to spend their money,” said Kirsch, who grew up in Madras and plans to pass on the family farm to his children.
At Ag West Supply in downtown Madras, equipment seller Terry McWilliams says the downturn in farming activity has cut his equipment sales in half over the past three years.
“Farmers are making big cuts, and they have to carefully consider what they are doing and they have to make choices about buying equipment,” said McWilliams, an Ag West employee for 25 years.
Ag West has tried diversifying its local product line to give farmers more low-cost options, McWilliams said.
“We brought compact tractors, but compared to a combine, you are still not making money,” said McWilliams. “As a salesman, it’s really hard to bring anything else that can offset the losses.”
The farming supply chain includes seed, irrigation equipment, electric power, fertilizers, chemicals, truck transport, farm machinery and other businesses, said Roger Lee, chief economic officer for the Economic Development for Central Oregon, a Bend-based nonprofit that promotes diversification in the local economy.
“That supply chain is disrupted when there are shocks to the system,” said Lee. “Because Jefferson County farmers produce more than half of the entire U.S. supply of carrot seed as well as other seed crops, Americans should be concerned about the impact of water allocation here.”
The water shortage is impacting a county that is challenged by high poverty rates. Even though GDP has been on an upward trajectory since 2013, Jefferson County’s poverty rate is the highest in Central Oregon — 20.9% compared to a poverty rate of 15.3% in Crook County and 12.1% in Deschutes County.
For Tim Carpenter, a sales rep for seed treatment specialist Helena Agri-Enterprises, the downturn in Jefferson County has caused a 10% to 12% drop in his revenue and is forcing him to refocus his marketing to other areas of Oregon, including Christmas Valley and Burns.
“But that comes at a cost. All of a sudden you have to go 150 miles for that extra work,” said Carpenter, speaking on the sidelines of the farm fair.
The long drives and lower revenue are tough on Carpenter, but he feels for the area’s farmers, too.
“You are working with these growers long-term, and it’s tough to sit down with them knowing that their revenue is going to be off by 20, 30 or 40%. It’s difficult (to work with them) when you know what tough cuts they have to make,” said Carpenter, who has been selling Helena products in Central Oregon for 25 years.
Until conditions improve at Wickiup, farmers in Jefferson County will continue to make sacrifices, such as fallowing fields. But leaving a field empty due to low water supply puts financial strain on farmers, who still need to pay for land even if it’s not in use.
Over a lunch of beef sandwiches, chips and soda pop at the farm fair, Kirsch said it costs $175 to maintain each fallow acre per season, as the land still needs to be treated to protect against topsoil loss.
Those maintenance costs can add up if you have scores or hundreds of acres fallow. It’s like investing in a rental property but then not being able to get the unit filled because of a code violation.
“You can take every water-saving measure,” said Kirsch. “But at the end of the day, it’s still tough to sustain profitability.”
Reporter: 541-617-7818,
mkohn@bendbulletin.com