| With the growing season barely under way, massive farmland
reduction programs already are starting to shuffle markets for
Northwest farmers.
As the region responds to one of the worst droughts on
record, nearly a half-million acres are already scheduled to
lie fallow this summer in Idaho, Washington and Oregon,
drastically changing the dynamics of some industries.
For starters, the Columbia Basin's sugar beet industry has
gone belly-up. And tree fruit leaders are wondering just how
low fruit quality will go without a full season of water.
But Basin potato farmers could reap contracts that Oregon's
dried-up Klamath Basin can't fill. And hay prices appear to be
on the rise in response to potentially large reductions in the
Northwest's 2001 crop.
"We're not sure just what to make of all these
things," said Pat Boss, executive director of the
Washington State Potato Commission. "There are some
strange things developing."
Bonneville Power Administration's program to buy water from
Columbia Basin Project farmers is drying up 90,000 acres.
Another 130,000 acres of the Yakima Basin will get just a
fraction of the normal water supply, reducing yields and
quality.
A power buy-back in the Palouse also is removing acres from
production. Avista Utilities in Spokane said it hasn't
calculated how much irrigated land is involved, but it
believes about half of all eligible growers are participating.
Other power providers are offering similar programs in the
Yakima and Walla Walla valleys.
Oregon's Klamath Basin, another large hay producing area,
has been shut down by the federal government to provide water
for fish protection, closing roughly 170,000 irrigated acres.
And in Idaho, water buybacks by Idaho Power Co. are
expected to take at least 50,000 acres out of production.
Add all that up and the markets could be in for some major
swings this summer. For growers of some commodities, the
effect could be positive. For instance, potato and apple
markets are stifled by oversupply, and a production reduction
may improve the big picture.
Because the Klamath Basin usually grows about 15,000 acres
of fresh potatoes for the Los Angeles market, packers there
already are canvassing the Columbia Basin for spuds to keep
their supply lines moving.
"That's good for us," Boss said.
But farmers worry the benefit may be short-lived.
"We don't like to see this, because ... what happens
in the Klamath Basin sets a precedent for what could happen
(with water supplies) up here in a few years."
For sugar beet growers, the drought has suspended a rocky
three-year struggle to regain profitable production in the
Columbia Basin.
Columbia River Sugar Co. officials said escalating natural
gas prices have forced the $100 million Moses Lake plant not
to operate this year.
"Farmers have had some other opportunities in these
BPA power buy-backs and ... we thought it best to have our
growers sit out a year," said Marvin Price, general
manager of the plant. He expects the beet crop to be back next
year.
Things aren't that bad in the hop industry, but suppliers
have warned breweries that production will be well short of
normal, said Steve George, with Hop Growers of Washington. The
Yakima Valley is the largest hop-producing region in the
nation.
Yakima Valley farmers faced with choices about where to use
their limited water largely will choose to protect highly
profitable wine grapes first, then juice grapes, followed by
tree fruit.
"Hops are going to be last," George said.
"The other commodities are harder to re-establish."
Cattlemen also are watching the drought closely as the
first alfalfa cutting of 2001 nears.
With the hay-rich Klamath Basin shut down, U.S. Department
of Agriculture's hay market experts are expecting higher
prices this summer, though the market could be weakened if the
Japanese currency continues to flounder.
Still, large new dairies being built in Northeastern Oregon
should increase demand substantially by fall.
"There are lots of questions about the hay situation
-- how the drought is going to affect it," said Randy
Mills, cattle expert and Oregon State University extension
agent for Umatilla and Union counties. "There are a lot
of unknowns out there. The hay market could become very
unstable and hay could get very expensive."
That could turn into a short-term gain for hay growers such
as Keith Rupprecht, president of the Washington State Hay
Growers Association. He said one neighbor already is getting
offers of about
5 percent more per ton than last year.
"People are looking for hay right now before the first
crop," said the Warden grower. And, he added,
"Everybody is concerned that if we increase the hay
prices, the livestock industries won't be able to absorb the
increase."
On the bright side, the drought-related energy crunch is
generating renewed interest in animal manure as a source of
energy. The concept has been batted around several times as a
solution to manure pollution problems in the Yakima Valley, so
far without results.
But Washington State University recently was given $800,000
for basic research on energy production in collaboration with
Pacific Northwest National Laboratory in Richland. Already,
Portland General Electric has started building a small power
plant at a diary farm near Salem.
"While the technology has been around for years, costs
to build and operate a biogas facility have been
prohibitive," said Jay Gordon, executive director of the
Washington State Dairy Federation.
"The power crisis has given the discussion a new
urgency. |