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How the drought that dried up farmers' finances impacts the county's overall economy

PAT KRUIS/MADRAS PIONEER
 - From his position as manager of Pratum Co-op, Dean Boyle sees how the drought has drained the economy of the entire community, not only the farmers. "We're trying to keep everything as normal as possible through our whole system."

One glance at Google Earth shows farming drives the Jefferson County economy. Madras, Metolius and Culver look like flecks of lint against a lush green quilt of grasses, carrot seed, hay, potatoes and a hint of mint.

The drought sucked the green right out of those fields this year. Those losses ripple through the rest of the economy.

One farmer's story

Twelve hundred of those once green acres belong to Vern Bare of Opal Springs Farms.

"I don't want to see Madras and Culver dry up and blow away," says Bare.

For the first time in five years, Bare had to borrow money against his equity.

"That's my measure of whether I'm ahead of the game or behind," says Bare.

What happened to his orchard grass is a good example of how the drought hit Bare and hundreds of farmers.

PAT KRUIS/MADRAS PIONEER
 - Vern Bare expected $170,000 in income from these fields of orchard grass. When the irrigation board, which Bare sits on, cut water allotments, Bare lost that income plus the $50,000 of fertilizer he put on that land. That's only a portion of his losses this year.Farmers in the district started out the season with an allotment for half the water they usually get, so like other farmers, Bare left about half of his acres fallow.

When the North Unit Irrigation District cut the allotment by 10%, he backed off even more acres.

He did invest $50,000 to fertilize 240 acres to double the yield of his orchard grass, which typically earns $330 a ton. As soon as he applied the fertilizer, the irrigation board cut back the water supply by another 10%.

"Had I known," says Bare, "I'd have kept (the fertilizer) in the bag."

He lost the $50,000 he invested in fertilizer. The crop died, so he won't earn the $170,000 he expected. The grass won't survive long without water, so he'll have to spend money to replant next year.

That doesn't account for the fallow fields and losses he suffered on his other fields.

"Our district survives by having the majority of its growers do well," says Bare, who sits on the board of the North Unit Irrigation District. "If they can't pay their water bill next spring, and they're larger growers, it's a trickle-down effect. The district requires 'x' number of dollars to operate, so those costs get pushed on to the growers that are still in business."

Drought sucks dollars out of the economy

Multiply Bare's losses by the 950 NUID customers, and you get hundreds of millions of dollars in losses or lost income, hundreds of millions of dollars that will not go back into the county economy.

"I think that estimate is just about right," says Dean Boyle, who is about to wrap up his career at Pratum Co-op. What makes the loss even worse, says Boyle, is the source of that money. "I would say 90% of the value that comes into this county via agriculture is from outside the area."

Bare sells his orchard grass around the world. Jefferson County grass seed, carrot seed, alfalfa hay, all sell around the country and around the world.

"This is all new money that flows into our community," says Boyle. "We have to have dollars to replace the dollars we spend outside of our community."

Farmers not producing affects the bottom line for the companies that serve them, like Pratum.

"We're trying to keep everyone employed," says Boyle. "We're trying to keep everything as normal as possible through our whole system."

Oregon State University Extension Agent Jeffrey Reimer recently co-authored an economic analysis of Oregon agriculture. "Every direct job in agriculture supports two jobs elsewhere," says Reimer.

Like the people who work at N&S Tractor.

"If the farmer's going to farm only half his crop, then obviously our part sales have a decline," says Reed Grote, N&S Tractor's manager for Oregon locations. "We have a decline in equipment sales, and a decline in service sales. The only time we're in business is when they're out there breaking something."

Grote says his teams will find different opportunities, but the growers are their top priority.

"They're our bread and butter, and we'll support them 100%, but if we've got to go out and find other customer bases, we'll do that as well."

Fertilizer sales at Wilbur-Ellis follow the farmers' downturn.

"We only do as well as our customers do," says Manager Joe Mendozona. He's been in the business for 25 years. "I've not seen anything this bad as it's currently in Jefferson County between the increased regulations and the water shortage."

Mendozona expects the entire local economy will feel the impact. "Those are all dollars that won't flow through the local economy, and it's unfortunate."

Survival strategies

Some farmers will not survive this season; some have already filed for bankruptcy.

"I know there are a few of them who have made the decision that this is probably the end for them," says Chris Dupont, vice president at Columbia Bank.

"We are working with our farmers to understand their situation and try to plan for an outcome that's suitable for both the bank and them as a customer," says Dupont. "We may defer payments for a period of time or restructure their current loan so we can add some cash back into their operation and help them weather the storm."

Dupont says what hurts the farmer hurts the community.

"Our farmers employ a lot of people in town. If they can't farm, they can't pay the wages," says Dupont. "That boils down to less spendable income in the county to be able to go out to eat or buy their groceries or their goods they buy at any of the stores in town."

The NUID board has sent a letter to state asking for $30 million in disaster relief funds for Jefferson County farmers.

"I would hope the state and the feds would do everything they can to help our farmers," says Mendozona, "because they are the backbone of our society and food supply."

"We need that desperately over the next few years to tide us over until we get the water situation figured out," says Boyle. "I feel confident that give us a few years and we'll be back on our feet again. In the meantime, it's going to be kind of rough."

"We support each other," says Grote, "and that's the great thing about this community is that we do support each other."


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