Tuesday, December 3, 2013

Small dairies article fails to mention impact of renewable energy costs and SB13-252

We read with interest the article titled “Weld County’s small dairies struggle to survive[i]” wondering if the Tribune would mention the cost of SB13-252 and renewable energy mandates. 
The article mentions these as factors causing narrow profit margins - “But that increased competition for water, land, feed and workers has made it more expensive for all dairies to operate, and the narrow profit margins are especially tough on small producers.”

The next paragraph states -“In the dairy business, you have so many inputs ... labor, a lot of water, a lot of feed, a lot of electricity, which is all getting more expensive ... while you have so little control over the price you get for the milk you produce,’ said Ellzey, whose 200-milking cow dairy had been operating near Galeton for decades. “Those dynamics have pushed a lot of smaller producers out of business. And it’s not getting any better.”

In spite of the fact that Ms. Ellzey mentioned “a lot of electricity” as part of their dairy’s input costs the author failed to mention energy costs as part of the factors that are causing these small dairies to be forced to close. 

Farmers and ranchers throughout Colorado produce commodities that compete across the region and, therefore, cannot pass along increased costs.  The net effect is lower profit margins which can lead to these small dairies to go out of business.  Although energy costs are just one reason among many that costs have risen, it is a key cost that has been negatively impacted by state legislation.  In 2003, the citizens of Colorado passed a constitutional amendment to mandate the use of higher cost renewable sources for Investor Owned Utilities (10% of input sources).  However, if you look at that vote in rural parts of the state, it would have failed. 

In 2007, the standards were imposed on REAs and increased for Investor Owned Utilities.  Unfortunately, even rural Republican legislators such as Cory Gardner, Jerry Sonnenberg, and Greg Brophy betrayed rural farmers and ranchers by voting for HB07-1281 proving that rural folks can’t even count on their Republican legislators to protect their liberties and way of life.  The renewable energy requirements were increased again in 2010, and finally in 2013 in the infamous SB13-252 bill.

We are slowly eliminating the ability of small family ranchers and farmers to make a living because of seemingly well-intentioned legislation.  However, it is really the role of government to put smaller farmers and ranchers out of business only to subsidize the renewable energy industry and the profits of large utilities such as Xcel Energy?  Renewable mandates such as what has been adopted by voters and legislators for the past ten years is having the impact of forcing smaller farmers and ranchers out of business.

If we want to save locally owned and small business farmers and ranchers, let’s have the discussion about what is driving them out of business and acknowledge ALL of the factors, including the subsidies being provided to large utilities and the renewable energy industry on the back of families that frankly just want to be left alone without the heavy-handed (and sometimes bipartisan) restrictions coming from the state capital.  The question that remains to be answered is how many more small farmers and ranchers will be put out of business as electricity costs sky rocket from SB13-252 and the 30% renewable energy mandate on Investor Owned Utilities that have yet to hit their pocketbooks…