(Klamath Falls) Herald and News via Associated Press

DAIRY, Ore. (AP) -- Rain and snow fell outside Monday, but inside Rice Feed & Supply Store, the conversation, ironically, was about this year's drought.

"I wish it would rain more, like everyone else," said Ray Hamel, one of several Yonna Valley farmers huddled around the store's big potbelly stove. It was loaded with firewood and putting out heat as the rain fell. Sharing the fire, and wishes for more water, were Steve Gorden, another area farmer, Dick Walker, a former farmer, and Vern Newlun, who decades ago ended a family farming tradition by working for the railroad.

Store owner Richard Rice mostly listened and let the others talk while Jack, his chocolate lab, slumbered on the floor. There was much to talk about, but Jack, who's heard it all before, dozed.

Hamel, 80, is a lifetime farmer who has grown hay and grain near Dairy since moving to the Klamath Basin in 1977. But this year, like others in the Yonna Valley, Hamel is leasing out 50 acres to potato growers from the Merrill-Malin area who rely on irrigation water through the federal Klamath Reclamation Project.

Hamel had planned to grow alfalfa, which he irrigates with well water, but changed his mind.

"The potatoes pay better than the grain," he said.

That's not necessarily good news for Rice, who won't be selling seed to Hamel and his other usual customers. Several Basin growers, under contract to supply potato chip manufacturers, are moving operations to Yonna Valley land with wells. Rice estimates 2,000 acres normally in hay and grain will be used instead for potatoes.

"If there's 2,000 acres of potatoes on this side of the hill, that's 2,000 acres that's not going to be in something else," he said, quickly adding, "There's noting against the people coming out here" or those leasing lands. "A lot of people, it bailed them out for another year."

On a normal year, Rice handles 50 tons of seed orders. This year he's looking at four tons. Hamel, for example, figures on 150 pounds of seed per acre, seed he isn't buying this year.

Normally, Rice also sells 20 pallets of twine for baling, "but with the price of hay in the toilet and people quitting, I don't have any twine orders."

Gorden, 39, who's grown hay and raised cattle for 21 years, thought about leasing some of his 350 acres.

"I talked to some potato growers, but I didn't (lease his land). Business as usual this year," said Gorden, who uses well water on most of his and lease land and irrigates other acres through the Horsefly Irrigation District. "It's going to be tight for water."

Walker, 67, who is not related to the Walker family with large agriculture operations in the Merrill, Malin and Tulelake areas, is watching this season from the sidelines. He retired in 2007 following a massive heart attack. Until then, he had raised alfalfa and potatoes for more than 40 years.

"I wanted to get out anyway. I was old enough," he said. "I was tired."

Walker, Gorden, Hamel and Newlun were sharply critical of government policies. All favor adding deep-water storage and question decisions that sent water from Upper Klamath Lake to downstream sources through the winter.

"We have deeper issues than this one year," Gorden said. "Instead of spending money tearing out dams they ought to spend more money on how to put in more storage."

"Government policies are creating the water shortage. The weather isn't helping," Hamel echoes.

After Walker, Gorden, Hamel and Newlun left, Jack the chocolate lab climbed into a vacated stove-side chair while Rice tallied his morning sales: a roll of stamps, two bolts, a couple of candy bars.

"It's going to be," Rice predicted, "an interesting year."


Information from: Herald and News, http://www.heraldandnews.com

Copyright 2010 The Associated Press.

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