TORRINGTON – According to estimations by the University of Wyoming’s IMPLAN economic impact simulator, the collapse of an irrigation tunnel along the Fort Laramie Irrigation Canal could have an even larger impact on the local economy than the shutdown of the Western Sugar processing facility earlier this year.
Losses in Goshen County won’t be as daunting as those suffered in the wake of the sugar factory closure, but the impact between Goshen County and Scotts Bluff County, Nebraska, is greater.
The estimation, which was released last week in a joint venture between Brian Lee, University of Wyoming Extension and Jessica Groskopf, University of Nebraska Extension, assumed a total loss of corn, dry beans and sugar beet crops in the 107,325 acres affected by the collapse, as well as a one-third loss of alfalfa. IMPLAN uses historical data to run its simulations.
The total combined economic loss in Goshen County and in Scotts Bluff County will be $89.13 million.
Goshen County alone will lose $24.57 million. An IMPLAN simulation of the Western Sugar shutdown estimated that the Goshen County economy would lose $67.4 million.
“This is a unique challenge, as farmers had made significant investments in crop production at the time of the collapse,” the report said. “This analysis will assume a total loss of corn, dry edible beans and sugar beet in the affected region and 1/3 loss of alfalfa production. Other hay and other crops cannot be estimated by this analysis due to a lack of historical information regarding acreage, yield and price. Production of irrigated crops is critical to these two rural counties. The production and processing of irrigated agriculture goods has both direct and re-spending effects within the local communities.”
The report showed that corn and alfalfa are the biggest crops in the affected area. It estimates that there are 24,729.20 acres of alfalfa affected in Goshen County, and 11,402.75 acres in Scotts Bluff County. Nearly 24,000 acres of corn will be affected in Scotts Bluff County, and 11,825.02 in Goshen County. Dry edible bean crops will suffer too – 13,192.52 acres in Scotts Bluff, and 4,446.05 in Goshen County.
The simulation assumes multipliers for lost labor income, loss of value-added products and in economic output. It also factored in economic spillover between Nebraska, Wyoming and the respective counties.
“Although most economic activity related to irrigated crop production would happen in the affected area, the economic impact of this collapse is not confined by county boundaries,” the report said.
“In addition to the county impacts there are also “spillover” affects between the counties and the rest of each state. This spillover is a function of re-spending across the county line.
“To quantify this interconnection two spillover analysis were conducted.” This is an important measure as lost crop production in Goshen County could impact the Scotts Bluff County economy and vice versa.”
While the simulation was conducted using the best available data, it is just a simulation. The actual measure of the economic impact of the collapse may not be available for years, and the prognosis changes depending on rain or a chance in irrigation availability.
“This economic impact model was produced with the best data available given the variability in agriculture,” the report said.