Time will tell: Economic impact of canal breach is yet to be determined
GERING — The economic impact of a July irrigation tunnel collapse and canal breach is yet to be determined.
The July 17 collapse of a 2,200-foot-long tunnel near Fort Laramie, Wyoming, caused a canal breach, forcing the Bureau of Reclamation to shut down delivery of irrigation water. The situation left approximately 107,000 acres of land in Wyoming and Nebraska served by the Goshen and Gering-Fort Laramie Irrigation Districts and the Wright and Murphy Ditch Company without a water source for nearly six weeks.
U.S. Secretary of Agriculture Sonny Perdue announced in August that the determination was made that the tunnel collapse was caused by unusually high precipitation. Because the collapse can be attributed to a natural cause, it is an insurable event for producers affected by the irrigation disruption.
The long-term impact is as yet unknown, and growers are just starting to see the short-term results of this season’s harvest.
Over the coming year, landowners can expect to see assessments coming from their irrigation districts. Goshen Irrigation District will conduct a public meeting Wednesday at 10 a.m. to allow citizens to comment on GID’s requested $4 million Clean Water State Revolving Loan Fund from the Office of State Land and Investments. The loan would come at 2.5% interest on a 30-year term with a $3 million principal forgiveness component for expenses and emergency repairs to the irrigation system, specifically, the tunnel that collapsed.
The district’s plan is to fund the loan through landowner assessment with a $5 increase per acre for the 2019-2020 fiscal year and beyond. GID Manager Rob Posten said there has not been a determination as yet for a permanent fix for the tunnel. He said the GID and Gering-Fort Laramie Irrigation District boards would be making that determination.
John Thomas, cropping systems extension educator for the University of Nebraska, said that beans, even with irrigation, are producing below normal levels this season. He said beans overall appear to be lagging 10-12 bushels per acre. That may have to do with the cooler, slower start to the spring or the cooler summer with more rain than usual, but Thomas said crops in areas with no irrigation are even more likely to show reduced yield.
“The beans down there didn’t get any water this summer, so it’s very hard to project anything on them,” Thomas said. “For sure, they’re going to take a yield hit, but it’s really going to be variable from grower to grower.”
Differing factors will come into play from maturity issues to harvest challenges from field to field, so the results of the season are yet to be seen, Thomas said.
A study conducted by economists from the University of Nebraska and University of Wyoming had estimated the total economic loss from the event at $89 million. That number will be reduced by the crop insurance relief. Jessica Groskopf, regional extension economist at the University of Nebraska-Lincoln, said the impact is not only the loss on the crops, but the resulting loss on the turnover of those ag-related dollars within the community, whether it be the purchase of equipment, labor costs or other products related to the production of the crop.
This incident shows the vulnerability of the many irrigation canal systems in the region, and many of them were built in the same time frame as the Goshen/Gering-Fort Laramie system. Groskopf reminds that just because it happened to this system this year doesn’t mean that it won’t happen to another system in the future. Response to this failure will have an impact on potential future incidents.
“How this collapse is handled will set the standard for how we handle similar circumstances in the future,” Groskopf said.
A benefit concert dubbed “Farmer Strong” will feature Chancey Williams and the Younger Brothers Band and Ned LeDoux at Five Rocks Amphitheater Oct. 5. Local company, 21st Century Equipment, is underwriting both bands and will donate 100% of the ticket proceeds to the Farmer Strong Disaster Relief Fund to support area producers affected by the canal breach and tunnel collapse. Tickets are $50 for the front reserved seating, $35 for the next level reserved seating, and $25 for general admission. Tickets are available at 21stCenturyEquipment.com, KNEB.com and KGOSKERM.com.
A fund has also been established to help growers impacted by the lost irrigation. Donations may be dropped off at the Oregon Trail Community Foundation office or at any Platte Valley Bank branch in Wyoming and Nebraska. Donations may also be made online at otcf.org or pvbank.com/give.