Water Trends in Agriculture:
Implications for Farms, Cooperatives and Communities
13th Annual Farmers Cooperatives Conference
Cooperatives, Agriculture & Water Resource Policies
Broomfield, CO
James Pritchett
Agricultural and Resource Economics
Colorado State University
James.Pritchett@ColoState.edu
Overview Slide

Farm Economics:


What does limited water mean to the
farm business?
Regional Economics:

What does irrigated agriculture mean
to rural communities?
Reductions in Irrigated Ag
• Urbanization
• Declining Aquifers
• Institutions
$ per ac.
Profit and Water:
General Manager Approach
25 inches
Available Water
Reduced Water
Challenges

Scale of Operation


Reduced Water
Opportunities

Opportunistic Farming

Turns (asset efficiency)
Earns (cost efficiency)




Financial Limitations



Cash Flow
Balance Sheet


Operational Risk
System Approaches
“Spreading” Water
Time Specific Management
Transition to Perennials
Technology Adoption
Water as a Crop
Irrigated Ag in Colorado
2007 Colorado Agriculture Receipts: $6.3 billion
2007 Colorado Crop Receipts:
$2.0 billion
2007 Irrigated Crops Receipts:
$1.4 billion (estimated)
Economic Activity per Acre
a
Region
Farm Gate
Receipts
Relative to
Regional Salesa
Economic
Activity
Generated per
Acre of Irrigated
Cropland
Representative
Cropping
Pattern
Arkansas
31 %
$428
Forages
Republican
37 %
$678
Continuous Corn Alfalfa
Rio Grande
48 %
$1,127
Potatoes - Barley
South Platte
2%
$690
Corn – Alfalfa –
Sugar Beets
Includes all production agriculture.
Economic Activity: Irrigated Agriculture

Direct Activity






Arkansas
$428
Fertilizer, Seed, Chemical Sales
(but margins only)
Transportation
Real Estate Services
Ag Consultants
Republican
$678
Rio Grande
$1,127
South Platte
$690
Induced Effects


Economic
Activity ($/ac)
Crop Sales (Gross Revenues)
Indirect Effects

Region
Wages Spent with Local Businesses
When is generated economic activity high?



High value crops sold outside the region.
Revenues spent on locally produced inputs.
Local support industries use local labor and inputs.
35
Western Household Preferences
Short Term Scarcity
30
Relative Importance Ranking (%)
25
20
15
10
5
0
Restrict
Private
Watering
Restrict Public
Watering
Permanent
Transfers
Temporary
Water Lease
Limit Industry
Draining Lakes
Higher Rates
Limit Habitat
Projects
Western Household Preferences
Long Term Needs
25
Relative Importance Ranking (%)
20
15
10
5
0
Limit Growth
of Cities
Buy Water
from Farmers
Build
Reservoirs
Storage
Construct
Piplelines
Reuse on
Private Lawns
Reuse Water
in Homes
Reuse Water
on Public
Landscapes
Require InHome
Conservation
Innovative Approaches

Farm Conservation of CU
• Deficit Irrigation and Dryland Rotation

Innovative Institutions
• Water Cooperative
• ‘Super Ditch’

Shared Infrastructure and Institutions
• ‘One Stop Shopping’ for Projects
• Economic Development Zones
• Water Basin Approaches
Water in Agriculture:
Where to go from here?

Irrigated agriculture is an engine of economic activity.




Water Transfers Might Take Many Forms



Income is largest for exported goods, local input use.
If acres transition, what alternatives exist?
What investments might be created?
Buy Back Leasing, Interruptible Supply
Shared Infrastructure and Institutions
Continued Support for Flexibility

Encouraging ‘Good’ Transfers