$367.8 Million is no Small Potatoes

A recent study by Oregon State University states that the Klamath Basin agricultural production value, with full water deliveries, is $367.8 million as well as over 3.000 jobs. (Image: Chelsea Shearer)

The following is from the Klamath Water Users Association.

OSU Study shows local agricultural economy impacts over 3,000 jobs and hundreds of millions of dollars.

KLAMATH BASIN, Ore. and Calif. – A recent economic impact study, conducted by Highland Economics and commissioned by the Klamath Basin Research and Extension Center (KBREC) with funding from Oregon State University Extension and Klamath County, Oregon, reveals the Klamath Project’s substantial contribution to the region’s economic stability, numbering in the hundreds of millions of dollars.

The study, currently under peer review, has shed light on the immense contribution of the agricultural economy of the Upper Klamath Basin and the importance of a reliable water supply.

Annual agricultural production value extends far beyond the farm

According to the study, the Klamath Project and off-project areas such as the Sprague and Wood River Valleys generate $367.8 million in annual agricultural production value during a full water year, as well as over 3,000 jobs.

This includes $261.7 million in crop production and $106 million in livestock production, highlighting the region’s strong dependence on irrigated agriculture.

“Agriculture in the Upper Klamath Basin is the backbone of the region,” said Tracey Liskey, Klamath Water Users Association (KWUA) Board President. “Without a full supply of water, the entire basin is affected, not just the farmers. The lack of water impacts everyone from local businesses that rely on agricultural trade to consumers who depend on the food products we produce.”

High-value crops and irrigated acreage comparison

The study found that high-value crops like vegetables and fruits, despite occupying only 12% of the irrigated acreage, contribute 45% of the total agricultural revenues, with an average value of $4,960 per acre.

Alfalfa and other hay, which support the livestock industry and indirectly contribute to food production, occupy the largest percentage of irrigated acreage at 33% and generate an average revenue of $1,357 per acre.

The Klamath Project and off-project irrigated agricultural production support an estimated 3,180 jobs and $176.5 million in annual labor income across the region, demonstrating the critical importance of agriculture in creating jobs and economic benefits far beyond the farm gate.

Water reduction = community destruction

The study also highlights the significant risks posed by reduced water supplies to the region’s agricultural economy.

As every irrigator is already well aware, a reduction in project water supply leads to significant losses, and a 34% reduction in water supply could lead to a $75.6 million loss in agricultural output, jeopardizing 880 jobs and $48.2 million in labor income.

More severe reductions of 47-66% could cause losses of up to $142.5 million in agricultural output, risking 1,560 jobs and $75.3 million in labor income. A 38.7% hit to the already struggling local economy.

“The community’s economic stability hinges on a dependable water supply for agriculture,” said Jeff Boyd, KWUA Vice President.

Reduced irrigation water supplies also negatively impact local tax revenues, with estimates suggesting that a one-third reduction in agricultural output could lower sales and use tax revenues in Modoc and Siskiyou counties by $265,000 annually. Klamath County has already experienced a $1 million annual reduction in agricultural property tax revenues due to reduced irrigation assessments in recent drought years.

Water uncertainty threatens more than this year’s crop

The impacts of uncertain water supplies extend beyond the direct economic losses, as evidenced by the decline in acreage of high-value crops like onions and garlic.

The study shows that garlic production reached 1,600 acres in the last full water year (2017) but has fallen to just 133 acres more recently.

Food processors report that the lack of reliable water makes growers reluctant to enter contracts for these crops.

If water shortages and federal water mismanagement continue, processors may seek to relocate production to regions with more stable supplies, potentially leading to long-term losses for the Klamath Basin agricultural economy.

“To address the challenges faced by the Klamath Basin’s agricultural community, it is essential that legislative efforts, like those led by our congressional delegation, continue to prioritize the development of long-term solutions to ensure a reliable water supply for the region,” said Paul Simmons, KWUA Executive Director. “Collaboration with key stakeholders, such as the KWUA, is crucial in advocating for the needs of farmers and ranchers while balancing environmental and other water user requirements.”

Reliable water supply is the backbone of our Agricultural Economy

The economic impact study highlights what farmers and ranchers in the Klamath Basin know all too well: a reliable water supply is the backbone of our agricultural economy.

Organizations like the KWUA are working tirelessly to find sustainable solutions to the water challenges we face. It’s crucial that policymakers, stakeholders, and the agricultural community come together to tackle these issues head-on.

Long-term strategies are needed that ensure a stable water supply. Reliable water is the only way to maintain the economic viability and resilience of the farms, ranches, and communities in the Upper Klamath Basin.

Without it, our communities’ way of life and the future of our agricultural heritage are at risk.

Legislative efforts, led by U.S. Senators Jeff Merkley and Ron Wyden and U.S. Representative Cliff Bentz, among other elected officials, must continue to prioritize the development of long-term solutions to ensure a reliable water supply for the region.

Collaboration with key stakeholders, such as the KWUA, is crucial in advocating for the needs of farmers and ranchers while balancing environmental and other water user requirements.

Water security is national security

Reliable irrigation water for the Klamath Project is essential for maintaining the economic viability and food production capacity of the region’s agricultural sector.

Efforts to address water shortages in the Klamath Basin must consider the far-reaching impacts on jobs, income, tax revenues, and the stability of local communities.

As our region addresses the challenges of water shortages and their impacts on agriculture, all stakeholders must recognize the contribution of farming and ranching. The economic impact study highlights what farmers and ranchers in the Upper Klamath Basin know all too well: without water, there is no agricultural economy.

The economic impact study provides a clear and compelling case for the importance of reliable water supplies, and farmers and ranchers, in maintaining a thriving economy in the Upper Klamath Basin.

Organizations like KWUA are working tirelessly to find sustainable solutions to our water challenges. Policymakers, stakeholders, and the agricultural community must come together to tackle these issues head-on. Long-term strategies are needed to ensure a stable water supply.

Dependable water is the only way to maintain the economic viability and resilience of the farms, ranches, and communities in the Upper Klamath Basin. Without it, our communities’ way of life and the future of our agricultural heritage continue to be in jeopardy.