Archive for Saturday, June 14, 2003

Sales drying up for Cimarron merchants

Drought creates ‘rough times’ for southwest Kansas town

June 14, 2003


— Scott Kelsay needs only to look at his lot of unsold used cars and trucks to see how the drought is hurting him.

"I've been doing this for 11 years, and it's the roughest times we've seen," Kelsay said. "It's all agriculture out here; if the ag sector isn't doing well, you're not going to do well."

Despite recent rainfall, few in Gray County are ready to declare an end to the drought as it goes into a third year, said Kurt Werth, county agricultural extension agent.

"We are so far behind that we will probably need 15 inches or more to get things put back," Werth said.

Werth said even farmers who irrigate were hurting because the aquifer is down. In 2002, the county had 12 1/2 inches of precipitation, five inches less than in each of the previous two years.

"By midsummer we're going to be pumping air again because the water is down too far to keep the pivots fully charged," he said.

These days, Kelsay does what he can to survive both the drought and a sluggish economy. He said his business was off about 40 percent, which forced him to lay off two employees earlier this year.

Kelsay likes to keep 20 to 30 vehicles on his lot, but increasingly they are lower-priced older models because that's what people are buying.

"They're looking at stuff they wouldn't normally look at, and even then they are still pondering," he said. "They're not wanting to spend money like they use to."

Unlike many rural Kansas communities, Cimarron isn't on its last legs with a dying downtown. Its tree-lined Main Street is alive, and the southwest Kansas town's population has grown to 1,900.

But the drought has cut into what farmers earn, and in turn what they can spend in the stores and shops.

"Instead of putting up a new corral, they get a board and some screws and patch it up," said Danny Stephens. Business at his family's lumber yard is down from a year ago.

Sandi Coast has seen change at her corner drug store with a vintage 1930s soda fountain.

"There's probably not as much walk-in traffic, but you don't leave the house when the budget is tight and you don't have money to spend," she said.

"It makes our accounts receivable run a little higher during the drought times. More and more people are asking for credit," she added.

Coast said the drought made her look for other sources of revenue like increased business with nursing homes. It also has forced her to rethink what to put on the shelves.

"You try to buy what customers need and not go overboard," she said. "We're not stocking high-end jewelry and collector dolls."

Tony Stauth has operated his one-chair barber shop since 1971 but doesn't see his customers as often because "when money is tight, you go longer between haircuts."

But he's not complaining.

"At least I don't have a lot of money on the books. A lot of folks do and they are having a hard time collecting it," Stauth said.

One indicator of the economic effect on farms is found in statistics kept by the Kansas Farm Management Assn. at Kansas State University.

The figures show that of those participating in the voluntary program in Gray County, net farm income went from $99,829 in 2000 to $6,566 in 2002. Statewide it went from $39,197 to $19,106.

"It's an indicator of what the situation is for farmers in Gray County who primarily make their living on the farm," said Michael Langemeier, KSU professor of agriculture economics.

Whether a farm can survive the dry times depends on how financially healthy it was before.

"Those who tended to have a good liquidity situation going into the drought are going to be in better shape, but that doesn't mean they aren't going to be hurt," Langemeier said.

As senior vice president at First National Bank, Steve Burns sees the problems firsthand.

Burns said that ordinarily 75 percent of farm income is from crops, but last year that percentage of income was from crop insurance and government payments.

Farmers, he said, are suffering from both reduced yields and lower prices.

"For three years, they have been restructuring debt. Now in some cases we are suggesting they get government loans if they want to continue to farm," he added.

Burns said none of the merchants have shuttered their shops because of the drought, but he sees the effect.

"Not only do the merchants have a loss of income, but things they sell on credit are getting spread out over a longer period of time," he said. "The problem then is the merchants can't meet their debts."

Even so, Burns expects retailers will outlast the drought.

"We've been through this before. We've had hardships before. It's a cycle that comes and goes. You have to endure it, but we'll come through it," he said.

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