Are low-water crops a realistic way to cut back on Colorado water use? 10 southwestern farmers are trying to find out.

In drought-stressed river basins, Colorado farmers are stuck between a push to stop using thirsty crops and unreliable markets for alternative crops that use less water

By Shannon Mullane3:50 AM MDT on Apr 24, 2024

From The Colorado Sun

Landan Wilson, front, and his father, Brian, prepare the soil for the summer’s farming season on their farm, April 17, 2024, near Dolores. The Wilsons received funding through the Colorado Ag Water Alliance's Drought Resiliency Program, to experiment with lower-water crops, like wheat and barley. (Hugh Carey, The Colorado Sun)

MONTEZUMA COUNTY — This summer, 10 farmers in southwestern Colorado are experimenting with low-water-use crops, like wheat and barley, as a way to cut their water use in times of drought. But their hopes aren’t high that the crops will become a dominant part of their business anytime soon. 

“There’s just not a big enough market for it,” said Bob Neely, a farmer in Montezuma County.

Colorado, which supplies water to its residents, 19 states and Mexico, is facing a water-stressed future. Its cities are replacing lawns with drought-resistant landscaping. Its water officials say every drop counts, and are in tense negotiations with other states about how to handle painful water cuts in the future. Farmers are being paid to temporarily reduce their water use, sometimes by switching to crops that need less water or by halting planting altogether.

The farmers in southwestern Colorado cut their use by about 1 acre-foot per acre on fields where they switched crops from alfalfa, which typically needs 2.5 to 3 acre-feet in that region each season. The normal one acre-foot roughly equals the annual water use of two to three households. 

Even with those savings, farmers still face a significant challenge: finding reliable places to sell their lower-water-use crops.

“We’re here, we’re trying other crops to see what we can do,” Neely said, but planning what to plant each year is always a complex puzzle with an eye toward profits. “Sometimes you might have to put in more fertilizer, sometimes you might have to do something else. Then, is it going to net you the same as alfalfa will?”

Climate research has found that, starting in 2000, the southwestern U.S. has experienced its driest 22-year period on record stretching back 1,200 years. 

In 2021, the water supply was so low that farmers in Montezuma and Dolores counties only got 5% to 10% of their normal allocation from McPhee Reservoir, which is managed by the Dolores Water Conservancy District.

“It was a horrible loss,” said Brian Wilson, one of the farmers experimenting with crops that use less water. It was a financial loss that amounted to about $250,000.

McPhee Reservoir near Dolores, stored less than 295,000 acre-feet, or about 77% of its capacity, on April 23, 2024. By the end of the summer, water managers predict the reservoir’s levels will be low and there will be little excess storage to carry over into the 2025 irrigation season. (Hugh Carey, The Colorado Sun)

The looming water crisis and historically low reservoir storage in 2021 and 2022 shook officials in the Colorado River Basin.

In response, the federal government relaunched its System Conservation Pilot Program in 2023 with $125 million in federal funds. The program pays water users, mostly farmers and ranchers, in Colorado, New Mexico, Utah and Wyoming to temporarily cut back on water to save the overstressed Colorado River.

This year, the federal government is spending about $797,000 in Colorado on drought-resistant crop projects as part of the program.

Also in 2023, the Colorado Water Conservation Board granted $900,000 to the Colorado Ag Water Alliance for its drought-resiliency program, which helps farmers experiment with ways to adapt in dry years. In 2023, the alliance paid about $144,000 to farmers to fund alternative crop experiments.

As concerns about the state’s water future increase, pressure has mounted on the state’s agriculture industry. One crop, alfalfa, has become a flashpoint, gathering defenders and opponents who debate its benefits on farms against its high water use and dominance in the Colorado River Basin.

For farmers and ranchers in southwestern Colorado, the focus on agricultural water cuts has been grating. They’re already operating with thin margins, in complex economic markets and with increasing expenses, farmers say.

But program funding has been a helpful way to deal with the financial ups and downs of the industry while farmers experiment with crops, like sorghum, wheat, oats and barley, that use less water than their regionally dominant crop, alfalfa.

The question really is whether they can base their businesses on those crops and others, like kernza, that are still being researched, said Montezuma farmer Landan Wilson, Brian Wilson’s son. He is growing alfalfa on some fields, while dedicating others to alternative hay crops, like spring wheat, oats and beardless wheat and barley, as part of the Colorado and federal water programs.

“If there’s no market for us as farmers to sell it, we aren’t going to jump on the bandwagon,” said Landan Wilson, who is also on the Dolores Water Conservancy District board.

The allure of alfalfa

In Montezuma and Dolores counties, rolling hills are covered with acres of farmland. Mid-April marks the time when farmers prepare their fields to plant wheat, barley, oats and their longstanding go-to, alfalfa.

For decades, it’s been a key part of the state’s agricultural industry, which contributes $47 billion every year to Colorado’s economy and represents 90% of the state’s annual water use. In the Colorado River Basin, which spans seven Western states, including Colorado, and parts of Mexico, alfalfa uses 26% of the river’s water — more water than cities, commercial users and industries across the entire basin.

That water use has become a much-debated issue in recent years because of two decades of prolonged drought and heightened concern about water supplies in the future.

Each year, farmers and ranchers must decide what crops to plant and how many acres should go to each crop. They’re basing those decisions on unpredictable water supplies and changing crop prices, which can be impacted by everything from what their neighbors are planting to a global pandemic, inflation or a sudden war in Ukraine.

They have to take into consideration their equipment — like a hay baler that can cost about $225,000 — because not every crop can be harvested with the same equipment. Their location is also a factor: Some areas have rail lines that help ship crops, but farmers in southwestern Colorado depend on pricey hauling by semitrucks. Those freight costs influence, and limit, where farmers can sell their goods and which crops they choose.

For farmers in southwestern Colorado, alfalfa is a reliable way to stay in business.

Dairy companies serve as consistent buyers that offer high prices. They need a consistent, high-quality crop that meets nutritional standards and does not cause cows’ bellies to bloat. Alfalfa has been that crop for years.

“Market prices are driven by demand,” said Dan Mooney, an assistant professor of agricultural economics at Colorado State University. “Buyers are willing to pay more for alfalfa because it’s a high quality forage and well-suited to the livestock industry. … You know what you’ll get.”

A dairy may offer $320 per ton of alfalfa, while a beef cattle operation may only pay $180, Neely said. The farmer depends on selling crops to cover expenses, like shipping, fertilizer, seed, equipment, water, land and other bills, so the price is a major factor. 

“Almost 100% of the dairy-quality alfalfa in this area goes to Texas,” Neely said.

Alfalfa also helps replace nitrogen in the soil, and it goes dormant in times of drought, growing again when water is available. Ranchers can also grow alfalfa and use it as feed for their livestock, which helps insulate them from changing crop prices, Mooney said. 

“I do think alfalfa will continue to be dominant. That’s driven by the livestock industry,” Mooney said. “I think it’s possible to start to see alternative forages or alternative crops appear, but they’ll remain niche markets for a while until multiple pieces come together, and that could take awhile.”

Others are not so sure about the future of alfalfa in Colorado and the Colorado River Basin, which provides water to 5.5 million acres of agricultural land.

To grow a healthy alfalfa crop, farmers need to use 30 acre-inches of water or more, which equals about 2.5 acre-feet. Other forage crops, like wheat, need about 12 to 18 acre-inches of water.

Water use and alternative crops

Switching to other types of forage comes with challenges, mainly contending with uncertain markets. 

Even if farmers switch to crops like beans or corn, which can compete with alfalfa’s high prices, they would still need to use the same amount of water to maximize their production. Wheat may need slightly less water, but in southwestern Colorado, it requires more fertilizer, and its prices aren’t competitive.

“It’s real tough to compete on wheat, period, because we’ve got to add so much fertilizer, and the input cost there just kills you,” Neely said. “Almost nobody will do that now because all you’re doing is breaking even, and once again, it’s not a water saver.”

Alfalfa may cost around $200 per acre for seed, but a single round of seeds lasts for five to seven growing seasons. Single-season seed for similar crops costs around $50 per acre, the farmers said.

Sid Knuckles, another Montezuma farmer who is participating in the state and federal programs to grow alternative crops, says the startup costs for alfalfa are not always worth it when there’s no guarantee he’ll have five to seven good water years in a row to actually grow and harvest the crop. 

Knuckles has several hundred acres of pastureland and irrigates up to 450 acres depending on his water allocation each year. He only grows alfalfa on 36 acres, and he bases most of his business on other forage crops, like sainfoin and a combined forage, which includes triticale, oats and barley. 

“If the years were good enough that I could have alfalfa again, I’d definitely make more money,” Knuckles said. “But when I don’t have any alfalfa, it makes it a lot easier to make a decision. I’m like, I don’t have a stand of alfalfa to save. I might as well just plant these crops that I know will take less water.”

But the markets for some crops are too unreliable to become a mainstay in some farmers’ businesses. 

In 2023, several farmers lost their alfalfa stands and planted other forage grains, like triticale, wheat, oats or barley, instead. The crops fetch the best prices if sold to local ranchers — to avoid the shipping costs — but soon the local market was glutted and the prices fell. The next alternative was to sell the crops in other states, but then the freight costs chipped into their overall profit.

One suggestion: The government programs should use some of their budgets to invest in research and development that would help establish reliable markets and supply chains, the Wilsons said. 

Mooney agrees. 

“That could be a huge boost,” Mooney said. “Farmers will always be willing to experiment with new crops and new forages, but they’re unlikely to go all in until they see proof that somebody will reliably buy it.”