Rural Colorado Economic Status - Mid 2009 (Colorado Springs: spring break, buying, to live in)

[jazzlover]

Originally Posted by CosmicWizard

jazz....You just might be in the wrong profession. Assuming that you are not already in the fortune telling businees, perhaps it's time to put out a shingle that says:

Your future revealed with 100% accurracy!

If I could be 100% accurate in my predictions, I wouldn't be wasting my time posting on this forum, or working either. I could take my assets and make the perfect speculative play--with high-leverage, of course--to make myself into a multi-millionaire. I haven't done that, of course, because a) I have been known to be wrong before, b) my timing has not always been perfect--and we know in leveraged speculation timing is EVERYTHING, and c) because I just can't get past my fiscally conservative philisophy that tells me in part that the world is just not that simple.

There are some things I believe to be true--even if they are not known or accepted by the great majority of Americans. Primary is that "peak oil" is real and we have reached it. From now on, we are on a declining curve. How that plays out is going to be very interesting, but the one prediction I can make with certainty is that our living arrangement as we have known it for the last half-century is going to end. Since Colorado is married to that living arrangement as much or more than any other place in the country, the results here are going to be traumatic--and will lay waste to some long and widely held assumptions about what this place is, should be, or will be.

In the shorter term, I think the biggest financial survival question is what evil financial demon we will face: hyperinflation, massive deflation, or a combination of both. We have so distorted our economy--so muddled it with subsidies, bailouts, and other mixed signals--that I don't think anyone really knows what's coming, not even all those high-fallutin' "expert" economists. My personal prediction (we'll see if I'm right on this one) is that we will probably see a combination of both hyperinflation and deflation simultaneously. This would be the economic "perfect storm" that few Americans (me included) will weather very well. I say both because I think we may see massive deflation in the value of things most Amercans own the most of--houses, cars, and play toys (RV's, boats, second homes, etc.), while the cost of basic commodities to survive--food, electricity, fuel, etc.--will explode. If so, in rural Colorado, farmland may suddenly be more valuable than a ****box condo at Vail. Rural Colorado also has both a blessing and a curse in having substantial fossil fuel reserves. Those may become very valuable again, but one has to wonder what kind of roughshod trampling of what's left of Colorado's natural environment will ensue to extract them. That could boost the rural Colorado economy, but the side effect could be like the old Vietnam-era saw from a General who said, "We had to bomb the village to save it."

The sad fact is that every day that we continue to press on down our current unsustainable economic and environmental course, we paint ourselves more tightly into a corner from which there will be no way to extract ourselves without a lot severe pain and suffering.

[brightdoglover]

It might not take a realization of Peak Oil to throw the monkey wrench in.
Five thousand Dark Ages monarchs own the largest reserves in the world (Saudi Arabia) and Al Qaeda would love to own the thing and the holy cities and would then basically rule the developed world.
Not to mention the second-highest reserves. Iraq.
Oh, and Iran. Some real trouble there, eh?
Venezuela might turn out to be our new best friend. Now *there's* a thought.

[Mike from back east]

Meanwhile, wheat farmers in Colorado have not slit their wrists in response to all the gloom and doom. In fact, the 2009 Colorado winter wheat harvest is up 72% from last year, is second largest in the nation behind Kansas, and the number two ranking is the highest ever achieved by Colorado farmers. At least we'll have yummy sandwiches to eat as the world comes to an end. Source.

[CosmicWizard]

Mike from back east wrote:

At least we'll have yummy sandwiches to eat as the world comes to an end.

And pizza crust too. If we're lucky maybe even the whole pizza.

[Bideshi]

Originally Posted by CosmicWizard

Mike from back east wrote:

At least we'll have yummy sandwiches to eat as the world comes to an end.

And pizza crust too. If we're lucky maybe even the whole pizza.

Remember the dumpsters behind Pizza places have the best diving...

[jazzlover]

Originally Posted by Mike from back east

Meanwhile, wheat farmers in Colorado have not slit their wrists in response to all the gloom and doom. In fact, the 2009 Colorado winter wheat harvest is up 72% from last year, is second largest in the nation behind Kansas, and the number two ranking is the highest ever achieved by Colorado farmers. At least we'll have yummy sandwiches to eat as the world comes to an end. Source.

With all due respect to Mike, this is an example of the “headline naiveté” so common these days—that is, looking only at the swarmy headline without examining the underlying data or conclusions. As a long-time supporter of agriculture and a former agriculturalist myself, I’m happy that Colorado wheat farmers appear to have had a decent crop, though the low wheat price probably won’t translate that big crop into a big improvement in most farmers’ bottom line. Beyond that, though, “the rest of the story” is not so sanguine, for several reasons.

One has to understand that wheat is actually a fairly marginal long-term crop on much of the land used to grow it in Colorado. That makes a good harvest like this a headline in itself. To understand this, some historical perspective is necessary when reading the figures quoted in the article. During the late 1980’s and early 1990’s, a lot of marginal Colorado wheat land was enrolled in the Conservation Reserve Program and was returned essentially to native vegetation. Having that marginal land removed from production actually improved the average bushel per acre production figures, as that poorer land was no longer counted when computing the averages. That a lot of land was in the CRP was a blessing when drought struck most of the Eastern Plains in Colorado during the early part of this decade. A friend who farms in SE Colorado noted that in his area, that period was actually drier than the Dust Bowl years of the 1930's, but there was little erosion or blowing dust in this latest drought because a lot of marginal land was in the CRP at the time.

Unfortunately, in the last few years, a lot of land in the CRP has been sold to speculators who are now “busting out” that land and putting it back in wheat production. Like the early sodbusters found, land taken out of native vegetation initially is pretty fertile and productive, particularly if there is timely and adequate precipitation—which is likely the case this year. Unfortunately, cultivation and grain production itself tends to deplete those natural nutrients pretty fast, and production on “busted-out” land tends to peak fairly quickly and then decline.

Another factor that may be skewing wheat production in the state is that wheat is a largely a dryland crop. From both a cost perspective and because of water rights sales, a lot of formerly irrigated cropland in eastern Colorado has begun to return to dryland farming. Wheat production is a logical crop for much of that land. So, wheat production may show an increase, but other crops that require irrigation—such as corn, milo, etc.—may be concurrently declining.

The other problem is that the cultivation and growing of an annual grain crop—meaning that the land must be cultivated and replanted annually—is a very energy-intensive proposition. It takes a lot of diesel fuel to plow, plant, cultivate, and harvest a wheat crop. Moreover, Colorado’s soils deplete themselves of nutrients quickly when taken from native vegetation to wheat production. So, a lot of fertilizer input is necessary to maintain high production. Much of that fertilizer is produced using a chemical process to fix nitrogen out of the atmosphere—a process that requires the burning of copious quantities of natural gas. How long growing wheat in Colorado will be economically feasible in an era of increasing fossil fuel scarcity is a good question. My personal prediction is something less than 25 years—potentially far less if the country suffers a serious “energy shock.”

Finally, as I noted earlier, eastern Colorado’s climate—along with most of the western Great Plains west of the 100th Meridian (that line is significant because soil transevaporation of water exceeds annual precipitation in a typical year west of that line) is actually marginal for wheat production. That combination of climate marginality along with the changing economic conditions will probably mean that most of that region, including much of eastern Colorado, will eventually return to dryland native rangeland in the next couple of decades. That will have profound effects on the economy and demographics of the whole western Great Plains region.

Now, there are people working on some solutions. People like Wes Jackson, who I know personally, at the Land Institute ( The Land Institute ) are working to develop perennial (meaning they do not have to be planted annually) feed grains, but they freely admit that is still a ways off. Incremental solutions like minimum tillage, etc. have been explored for years, but need additional improvement, as well.

The bottom line, though, is that Colorado Eastern Plains agriculture is going to have to change significantly in the years ahead. This year’s good wheat harvest is some temporary good news, but it should not be taken a harbinger that all is well out there on the Plains—the long-term challenges are still daunting. Truth is, the future may also see us changing out eating habits—relying on the Eastern Plains of Colorado to do what it did in its pre-cultivated farming days—producing grass-fed cattle (not like today’s grain fed cattle—that era is about over) for us to eat.

As an aside, the National Agricultural Statistics Service final report on crop production for Colorado can be interesting reading. Unfortunately, it will be about a year before the final 2009 production figures are released in that report.

NASS - Colorado Reports and Statistics

[heaven_scent_horses]

Wow that was a lot of good info. my name is Kay and I am the founder of Heaven Scent Equine and Animal Rescue Org. we have submitted our 501c3 application and of course they have already cashed the check. But due to the economy as you well know and spoke of, we need to lease with option to buy horse facility large enough to grow hay also that we need for our rescues. since we will be doing therapeutic work there as the equine and animal connection in many forms, we need a place that can house my family members who will be coming as part of Heaven Scent Rescue. My best friend Cindi and I took a road trip this past June to look at a hay farm and a 596+acre horse facility. So far we are not able to purchase property but hope there is someone we can help by leasing with option to buy to help them out of a finance situation to where this could be a win win. Once we have a place to open our programs at, we will be helping the communities that we open facilities in. Our long term plan is to have facilities all over to help in the rescue of animals that will be given a nd chance by helping all the people that can and will benefit from the programs. If you know of a property management company who handles these types of deals or someone you have heard of or from that may like to talk to Cindi and me who is co-founder, here is our email: heaven_scent_horses@yahoo.com. I hope we can make this move before the real winter problems start, we will be bringing our present rescues with us from VA. I lived in Colorado from 1978 to 1995 at which time I had to move reluctantly of course but I had to due to family issues. I Moved to VA. because my family was hear and my kids wanted to get out of CA. I should have made a beeline back to Colorado when I had that chance, but I guess I was destined to meet my hubby Bruce, and Cindi, my bestest friend. my sons and daughters, along with grand kids will be making this move as well. so if any of you that is reading this please let me know if there is someone that would work with us on the lease option. Thanks

[CosmicWizard]

jazzlover wrote:

With all due respect to Mike, this is an example of the “headline naiveté” so common these days—that is, looking only at the swarmy headline without examining the underlying data or conclusions.

To me it's not naivete, but rather Mikes spirit of hope that he expressed. Not all of us feel the need to dig beneath the headlines all of the time. Sometimes I'm inclined to simply celebrate the hope it bestows, even if it is somewhat of a little white lie. IMO, you read too much of Kunstler and others like him to the point you've become one of them guys. You guys get so OVER focused on understanding problems that you get hopelessly lost in the problem, and all you can see is the problem getting worse. That is a recipe for despair and a further loss of hope. I have no argument with the insights you provided. You seem like a very knowledgeable guy. You know alot about all these things, and you can readily see the little white lie in the headlines. I just wish you would find a way to share your insights without diminishing the hope expressed by others who are not as concerned about all the details as you are.

[Mike from back east]

Exactly. There have been problems in Ag for a long time. The current credit crunch and recession didn't cause those ills, dislocations, soil conditions or other detriments. Recessions blow through rural Colorado every so often, just as they do the rest of the nation, and this one will pass just as they all do. Peak oil is probably real, but it WILL be dealt with and the world will go on. No need to shrink from the task. Lets get OUR people back to work by building wind and solar plants HERE in rural Colorado.

FWIW: Big money like Goldman Sachs is buying up HUGE tracts of land in rural areas of CA, NV, UT, NM, etc for the eventual solar and wind plants THEY know are coming and for which they want to corner the action for themselves. The same dynamic can work for Colorado's rural areas if big farmers and ranchers get their heads together and not let themselves be picked off one by one as the secret land buyers for big money dudes come through making fat offers like Disney's buyers did in the Orlando area BEFORE announcing DisneyWorld.

[Josseppie]

Exactly. Look at this map that shows the best places for solar plants. The San Louis Valley has one and Pueblo is going to get one that is 2,000 acers. There is plenty of room for more in south eastern Colorado.