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[GreenYes] Fwd: [OFEE] It's not just steel

>Date: Tue, 19 Feb 2002 09:47:48 -0500
>Sorry for cross-postings.
>It's not just steel.  It looks like we're in for a long downturn in
>commodity raw material prices (and therefore recyclables prices) as this
>article from Saturday's NY Times illustrates.
>Jim Gilbert
>Environmental Services Unit
>Empire State Development
>400 Andrews Street, Suite 710
>Rochester, NY  14604
>(585) 325-1944
>Fax (585) 325-6505
>Web Site:
>February 16, 2002
>Changes in World Economy on Raw Materials May Doom Many Towns
>BRADY, Tex. - All along the nation's back roads, hundreds of towns like this
>one are teetering in the recession, and some worry that they may never
>recover. Uranium mining has stopped in Falls City, Tex. In Loving County,
>Tex., oil exploration has stalled.
>For farmers in Pima, Ariz., and Bartow, Ga., cotton prices have sunk to
>30-year lows. Here in Brady, the ranchers who raise goats for angora wool
>are victims of low prices and competition from New Zealand and Argentina.
>Stretched across the southern tier, from Arizona and New Mexico through
>Texas and Georgia and into Virginia, these small rural communities form the
>base of the national supply chain. They produce most of the oil and much of
>the ore, fiber and food. In past recessions, even if they did not bounce
>back entirely, at least they survived.
>But this time around, as the overall economy begins to show some signs of
>healing, things are ominously different in many of these towns.
>Since the last recession, in the early 1990's, China, Russia and the former
>Soviet republics have charged into the world's commodity markets. At the
>same time, new trade agreements have erased quotas and tariffs that long
>insulated United States industries from foreign competition.
>While freer trade benefits American consumers and industries that can now
>buy cheaper imported commodities, it has been rough on the places whose
>livelihoods depend on raw goods. For these already-struggling communities,
>the first post- globalization recession may break the old sequence of
>boom-bust-boom, and erase any hopes of long-term survival.
>Foreign potash and uranium are now cheaper than New Mexico's, and Australian
>wool is cheaper than that produced here in Brady, a ranching town of about
>6,000 people in the Texas Hill Country. In part because of competition from
>Latin America, the copper mining that has stalled in Arizona and New Mexico
>might never return.
>"All the rural parts of New Mexico are dependent on mining," said Terry
>Fletcher, chairman of the state's mining commission, "and almost all
>hard-rock mining is going offshore."
>Certainly, there are communities along these back roads that have found ways
>to rebound. Some are part of the expanding orbit of sprawling cities.
>Heirs of the beleaguered peanut farmers of Floresville, Tex., are selling
>out to subdivision developers from San Antonio. Brady's game- stocked woods
>bring in money from hunters. With museums and antique shops, other towns,
>like Silver City, N.M., hope to get along by selling their past.
>But for many rural communities, industries that have been declining for
>years may be dying out.
>"We're just constantly losing without anybody filling in the blanks," said
>Joyce Patrick, a real estate office assistant in Halifax, Va., where the
>economic pillar was once tobacco and then became textiles, which are now in
>One place that is losing is Silver City, population 10,545, in southwest New
>Mexico. Contrary to what its name implies, Silver City depends on copper, as
>the silver ran out a century ago, and it has been the plunge in demand for
>copper that is hurting the town and surrounding Grant County.
>The Phelps Dodge Corporation operates New Mexico's two biggest copper mines
>here and it is the county's largest private employer. It employed 2,400
>workers in Grant County and neighboring Hidalgo County three years ago.
>All but about 700 have been laid off. Businesses that served the mines are
>letting another 400 workers go, said Jose Maestas, director of the local
>office of the New Mexico Department of Labor.
>Mr. Maestas said that unemployment in Grant County had gone to about 14
>percent from 9 percent last fall. Stores are closing fast.
>"A couple of years ago, every building downtown was full," he said.
>Behind Silver City's latest travails is a plunge in world demand for copper.
>Prices have dropped by half, according to the United States Geological
>Survey, to just under 70 cents a pound in the spot market from $1.40 a pound
>in early 1995.
>"We've got huge inventories of unsold copper, which are not selling," said
>Richard Peterson, Phelps Dodge's spokesman in Silver City.
>Once customers need copper again, Phelps Dodge mines in Chile and Peru as
>well as foreign-owned mines in South America will benefit more than those in
>Silver City, Mr. Peterson said, because the ore mined abroad is richer in
>About 330 miles east of Silver City is Loving, N.M., population 1,326. It
>has ranches, oil wells and, nearby, the nation's largest deposits of potash,
>a basic ingredient of fertilizer.
>A few years ago, seven 850-foot- deep potash mines operated in Eddy County,
>which includes Loving. Now there are three. Mining jobs in the county have
>fallen to 850 from 1,800 in 1993. Mining companies say most of those jobs
>may be gone for good.
>Part of the reason is the depressed agricultural economy. But even if that
>economy revives, and farmers start using more fertilizer, the Loving area
>will be hard put to respond. Canadian potash is increasingly competitive,
>and the potash reserves here are old and run down. What remains is harder
>and more expensive to get.
>"You just run out of mineable ore," said Melinda Hood, spokeswoman for the
>Mississippi Chemical Corporation, a potash mine operator in Eddy County.
>In Loving's little downtown, just two cars were parked at the branch of
>Western Commercial Bank on a summery day in the middle of winter. The only
>person in sight was a woman in curlers smoking outside the town's other
>remaining business, a hair salon.
>The storefront marked City Hall was shuttered. After a fire in June, the
>town government moved to two rooms in what was once the elementary school.
>"We used to have two pool halls, two bars and two cafes, a barber shop,"
>said Manuel Garza, the city clerk. "People just moved out."
> From Loving, N.M., Highway 285 winds east to a county in West Texas also
>called Loving, which is the nation's least populous county, with 67 people.
>Mentone, the county seat, has two businesses, a cafe and a gas station.
>Children are bused 36 miles to school in the town of Wink.
>In the 1980's oil boom, with so much oil and so few people, Loving was a
>very rich county. But with the oil bust of the late 80's, the West Texas
>economy plunged. It has not helped that the county's oil, which was easy to
>retrieve, is harder and more costly to get.
>"The oil field just went poof," said Barbara Creager, whose husband, Royce,
>services oil wells. There is more oil out there, but further exploration is
>costly and the industry faces competition not just from Saudi Arabia but
>from Kazakhstan, Tajikistan and Uzbekistan.
>This has been rough on Loving County, which gets 98 percent of its tax
>revenues from oil, said Mr. Creager, who is also a county commissioner.
>About 250 miles from Mentone as the crow flies is Brady. Here, the recession
>and globalization have hit mohair and wool.
>Tommy A. Quick, 68, and his wife, Wanda, 54, pulled into a McDonald's one
>Sunday morning, a black and white Nubian nanny goat nibbling straw in the
>back of their pickup.
>The Hill Country was the "angora wool capital of the world," said Mr. Quick,
>who owns 125 goats, but now raises them for their meat instead of their
>hair. "The whole wool business is shot," he said. "Every Japanese man wanted
>a mohair suit. It comes from angora goats."
>With the global recession, he said, no one wants the suits anymore.
>"I worked at this wool plant, Roddie Wool Scouring, for 27 years," Mr. Quick
>said. "We washed two million pounds a week. It was the steadiest job ever in
>this town. Now it's shut down to three days a week."
>Four years ago, Sherri Tally, the office manager at the Roddie plant, wrote
>weekly paychecks for 105 workers. "I do 23 now," she said.
>In Bartow, Ga., the culprit is cotton. High production in countries like
>China has led to an oversupply and plunging prices. Raw cotton today sells
>for about 55 cents a pound, about 30 percent below the price five years ago.
>As the American farms have gotten bigger and automated, the small- farm
>families that sustained Bartow have given up and moved.
>Even the federal government's subsidies for cotton have not been enough to
>allow any but the biggest farmers to eke out profits. Though Georgia is one
>of the fastest-growing states, Bartow's population dropped to 223 in 2000
>from 292 in 1990.
>"I just gave it up," said T. Murray Dukes, 72, who raised 300 acres of
>cotton near Bartow for 40 years. "Cotton used to be your money crop. But you
>don't know what you're going to get for it now."

Gary Liss
Fax: 916-652-0485

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