WORKING PAPER NO. 15 DESCHUTES RIVER BASIN (OREGON) PRELIMINARY ECONOMIC RECONNAISSANCE AND ESTIMATE OF GROWTH, 1960-2010 February 28, 1962 Prepared by: Economic Studies Group Water Supply and Pollution Control Prog Pacific Northwest ------- I5aler ^aovrcss S ^CLUfi1BjA^fi;^OrLo'l Fale Copy r. DESCHUTES RIVER BASIN (OREGON) PRELIMINARY ECONOMIC RECONNAISSANCE AND ESTIMATE OF GROWTH, 1960-2010 r Table of Contents I. Introduction A. Purpose of This Analysis B. Definition of the Area C. Study Period D. Limitations of This Analysis II. Present Econony of the Basin A. Population B. Industry III. Estimated Future Grovrth A. Factors Influencing Future Growth B. Estimate of Future Population C. Future Land Use Prepared by: Economics Studies Group Water Supply and Pollution Control Program, Pacific Northwest February 28, 1962 ------- February 28, 1962 DESCHUTES RIVER BASIN (OREGON) PRELIMINARY ECONOMIC RECONNAISSANCE AND ESTIMATE OF GROWTH, 1960-2010 I. Introduction A. Purpose of This Analysis This analysis is intended to provide a preliminary estimate of the economic potentials and anticipated growth of the subject area. B. Definition of the Area The Deschutes River Basin, for purposes of this study, is defined to include all of Jefferson, Crook and Deschutes Counties, all of Wasco County except for the northwest portion containing The Dalles, the western portion of Sherman County, and a small area in the north of Klamath County. C. Study Period The study period is the 50-year period 1960-2010, with an interim point at 1980. D. Limitations of This Analysis Two limitations apply to this study. The first is that it is intended only as a preliminary estimate of the outlook for the subject area's growth. Subsequently, in connection with the Columbia River Basin Project for VJater Supply and Water Quality Management, an analysis will be made on an industry-by-industry basis of the growth potential in the various sub-basins. At that time, this preliminary estimate will be reviewed, and revised if necessary. The second limitation is that thib study js intended for use particularly in assessing future w&ter needs. Emphasis has been placed on the analysis of those industries which make heavy damands upon the water resource. Other industries have been considered only insofar as they may have a significant effect on future population. For this reason, this study is not submitted as a detailed industrial forecast. II. Present Economy of the Basin A. Population Estimated population in the Deschutes River Basin is shown in Table 1. During the period 1540-60, the Basin's population grew more rapidly than the rest of Eastern Oregon, although its growth rate was ------- 2 considerably below that for the State of Oregon as a whole. Most of the growth came during the 1940-50 decade; population growth in the Basin during the last 10 years was only seven percent. Table 1 ESTIMATED POPULATION IN THE DESCHUTES RIVER BASIN Area Population,in thousands, 1950 1960^ 1940 1S50 as 7. of 1940 1960 as 7> of 1950 i960 as % of 1940 Crook County, total Deschutes County, toLal Jefferson County, total Klamath County, portion Sherman County, portion Wasco County, portion 5.5 18.6 2.0 1.1 0.4 2.9 9.0 21.8 5.5 1.1 0.5 3.0 9.4 23.1 7.1 1.1 0.5 2.4 TOTAL, DESCHUTES BASIN 30.5 40.9 43.6 134 107 143 Remainder of Eastern Oregon ISO.4 206.5 221.6 114 107 123 Oregon, State total 1089.7 1521.3 1768.7 140 116 162 3 / — This esLimale differs slightly from a I960 population estimate for the Deschutes River Basin given in the State Water Resources Board's Deschutes River Basin report, January 1961, page 4, vhich study defines the Basin to include a portion of Sherman County along the Columbia River which is out- side the physical boundaries of the Deschutes Basin. The population of the additional portion of Sherman County included in the SWRB report is about 700. The estimate in Table 1 for the portion of Wasco County in the Deschutes River Basin is slightly higher than that in the SWRB report. The ten incorporated communities in the Basin are listed in Table 2, with their populations at the time of recent censuses. The total popula- tion of these ten incorporated places was 50 percent of total Basin popu- lation in 1960, the same percentage as in 1950 and 1940. It would appear that the urban-ward shift of population typical of other Basins has not been experienced in thr> Deschutes Basin. This may partly be due to a failure of the cities here to annex growing areas around them. If the urbanized but unincorporated area called "Prineville Southeast", referred to in footnote "b" of Table 2, were included with Prineville, the percent- age of Basin population living in the ten cities would be 53 in 1960. The absence of a significant urban-ward trend may also be related to the extensive-type agricultural economy of this area. ------- 3 The principal cities in the Basin experienced considerable growth during the 1940-50 decade, but their growth during the last ten-year period was relatively slow. As shown in Table 2, the ten cities in the Basin together increased only 6 percent in population during the period 1350-60, approximately paralleling the 7 percent population increase in the Basin as a whole during that period. The three principal cities in the Basin (Bend, Redmond and Prineville) contain 43 percent of Rasin population and, if suburban areas immediately adjacent to them are included, about half the entire Basin's inhabitants are in these three comnunities. Table 2 POPULATION IN INCORPORATED PLACES IN THE DESCHUTES BASIN P" o p u 1 a t i o n 1960 as 7o City County 1940 1950 1960 of 1950 Antelope Wasco 90 60 46 77 Bend Deschutes 10,021 11,409 11,936 105 Culver Jefferson (a) 301 301 100 Madras Jefferson 412 1,258 1,515 120 Maupin Was co 267 312 381 122 Metolius Jefferson 40 157 270 172 Prineville Crook 2,358 3,233 3,263 (b) 101 Redmond Deschutes 1,876 2,956 3,340 113 Shaniko Wasco 55 61 39 64 Sisters Deschutes (a) 723 602 83 Total, Ten cities 15,119 20,470 21,693 106 (a) Unincorporated in 1940, no data available. (b) Excludes "Trineville Southeast", a built-up area adjacent to Prineville but outside its corporate limits, and containing 1299 persons in 1960. It was not enumerated separately in 1950, since its population then was less than 1000. In addition to the ten incorporated places, there are about 60 identifiable communities that are unincorporated. With the exception of "Prineville Southeast", a suburb of Prineville, they are all quite small, most of them having a population of less than 100. ------- 4 B. Industry The economy of the Deschutes River Basin is heavily dependent upon agriculture and upon lumber and wood products manufacturing. Table 3 shovjs the employment pattern in Crook, Daschut.es and Jefferson Counties in 1950. Employment data are not available for portions of counties, but it is believed that the industrial and employment pattern in the portions of Klamath, Sherman and Wasco Counties lying in the Deschutes River Basin are similar to the rest of the Basin. About SO percent of Basin population is in the three counties totalled in Table 3. The adjacent portions of Klamath, Sherman and Wasco Counties are similar geographically to the rest of the Basin and contain no large communities. For these reasons, it is assumed that Table 3 reflects accurately the employment pattern in the entire Basin as of 1950. Data are not yet available from the 1960 census, but on the basis of statistics from the State Department of Employ- ment, it appears that the employment pattern has not changed significantly since 1950. Nearly half of the entire labor force in the Basin is in agri- culture and lumber and wood products manufacturing. The rest of the labor force is in service industries, so that the economic base rests almost wholly on agriculture and lumber and v7ood products manufacturing. Table 3 EMPLOYMENT, BY INDUSTRY, IN CROOK, JEFFERSON AND DESCHUTES COUNTIES, 1S50 (Data for Employed Civilian Labor Force) Total Population 36,339 Total Employment 14,064 Agriculture 2,850 Forestry and fisheries 142 Mining 72 Manufacturing, TOTAL 3,526 Lumber, wood products 3,103 Food and kindred 141 Printing and publishing 126 All other 156 Construction 938 Services 6,363 Industry not reported 173 Table 4 shows the relative specialization in the Deschutes River Basin economy by comparing the distribution of the labor force there with the distribution in the Portland Region, of which it is a part. The table illustrates the Deschutes River Basin's heavy concentration in agriculture and lumber and wood products manufacturing, and its dependence upon the Portland Metropolitan Area for many services. ------- 5 Principal agricultural products are vheat, potatoes, hay, seeds, and beef and milk cattle. Table 4 EMPLOYMENT BY INDUSTRY PER 1000 OF TOTAL POPULATION, 1950 (Data for Employed Civilian Labor Force) Deschutes Portland Industry Basinl/ Region-' Total Employed Labor Force per 1000 population 387.0 376.1 Agriculture 78.4 44.7 Forestry and fisheries 3.9 2.2 Mining 2.0 1.0 Manufacturing, TOTAL 97.0 89.4 Lumber, wood products 85.4 53.5 Food and kindred 3.9 8.4 Printing, publishing 3.5 4.8 All other manufacturing 4.2 22.7 Construction 25.8 27.9 Services 17-5.1 205.7 Industry not reported *. 8 5.2 1/Distribution based on figures for Crook, Jefferson and Deschutes Counties. 2/Includes all of Oregon plus five counties in southwestern Washington. Ill. Estimated Future Gro'.rth A. Factors Influencing Future Growth. During the past decade, little diversification occurred in the economy of the Deschutes River Basin, and the economic base remained almost exclusively dependent upon agricullure and lumber and wood products manufacturing. The Dalles, where some diversified manufacturing has grown up, is outside this Basin, and such industrial development along the Columbia River is not expected to have any major impact on the Deschutes Basin. The future of the Basin is expected to continue to be tied closely to agriculture and tinber-based industries. The only ether major activity with potential growth would appear to be service employment based on recreation. ------- 6 The principal industry in the Basin, in terras of employment, is lumber and wood products manufacturing. The outlook for employment in this industry depends on (1) maintaining the timber harvest, and (2) devel- oping secondary manufacturing, that is, going beyond sawnill products to fabrication of doors, mouldings, panelling and other finished products embodying additional labor. The outlook for maintaining or increasing the timber harvest is complicated by the fact, as shown in Table 5, that about one-third of the forested land in the Basin is now in juniper, which has not heretofore been of much commercial use. How much employment could be built upon a sustained-yield harvesting of that species is problematical. Table 5 FOREST ACREAGE IN PRINCIPAL TREE SPECIES IN CROOK, DESCHUTES AND JEFFERSON COUNTIES-' (Data in thousands of acres) Total Forest Ponderosa Lodgepole Douglas Juniper Other Land Pine Pine Fir 2,918 1,292 230 34 1,052 310 "^Source: State Water Resources Board, Deschutes Rjver Basin, January 1961, p. 6. The principal commercial species is ponderosa pine. A major part of this timber is on U. S. Forest Service land, but there are also a few large private holdings. Harvesting of trees on the Forest Service land is approximately at its sustained yield maximum. The supply of timber from private land may decline in the future and competition is likely to be severe for logs. The general trend towards reduction in the number of mills and the consolidation of smaller operations with larger, more efficient plants is likely to be even more marked in this Basin than in other parts of the State, because of the competition for logs. This will probably mean an acceleration of the historic trend of rising pro» ductivity per worker, so that, even if total lumber output should increase moderately, there might be no increase in employment. Employment in wood products manufacturing could increase if additional secondary fabrication is developed in the Basin. An example would be the establishment of a pulp or paper mill in the Bend area. It appears that the raw materials necessary to such a plant are available. However, there is considerable doubt whether the unappropriated water available in the Basin would be adequate to support such a plant. An ------- 7 alternative use of such raw materials would be to ship them down to the Columbia River or across the Cascades, for processing at large plants outside the Basin. On balance, it appears that the various factors outlined abovfe may tend to offset each other, so that total employment in lumber and uood products manufacturing in the Basin may remain at about its present level for the foreseeable future. Vigorous development of secondary products could lead to some increase in employment. The outlook for growth in the other principal industry in the Basin, agriculture, is somewhat more favorable than that for the timber- based industries. This is due to the possible increases in irrigation. However, though it is anticipated that agricultural production will increase, that v/i31 not be accompanied by a proportionate increase in agricultural employment, due to rising productivity per worker in agri=« culture. In other areas, where the advent of irrigation has made possible the cultivation of heretofore unused acres, a large population increase has often resulted. In the Deschutes Basin, however, it appears that additional irrigation is likely to be used not to increas.e acreage but to firm up the water supply on acreage now receiving less than its full water needs. This will tend to increase productivity per acre and pro- ductivity per worker rather than increase the number of persons working in agriculture. While there is still some unappropriated water in the Basin, it is not certain how much of it will be available to agriculture. The principal increase in water for irrigation will come through increased efficiency in irrigation use. At present, the loss of water through the porous soil is abnormally high. Agricultural output will increase in the Basin, but this is not expected to lead to development of significant employment in food proces- sing. Aside from about 100 workers in "food and kindred" manufacturing in Bend, there is very little food processing in the Basin at the present time. As in the case of wood producls manufacturing, the trend in food processing is towards fewer, larger, more efficient plants. Any new plants in this Basin would have to compete with large, existing plants out- side the Basin. It seems likely that most of the agricultural produce of the Basin will continue to be shipped outside the Basin without local processing. If the maximum size of individual acreage holdings in irrigation projects is limited by government policy, this would result in some ------- 8 increase in the number of persons working In agriculture, though it might have the opposite effect on productivity. In general, it appears that total employment in agriculture and related activities in the Basin as a whole is likely lo remain at its present level or increase only moderately. Employment in recreation-based service indjstries is expected to increase moderately in the future. B. Estimated Future Population. Population in the Deschutes River Basin grew during the period 1940-50 at a rate of 3 percent per year, below the rate for the State as a whole of 3.4 percent but sfcill a high rate of increase. However, that high growth was largely a result of a rapid expansion of the lumber and wood products industry which is not likely to be repeated in the future. Growth in the Basin during the period 1950-60 was only 0.6 percent per year, compared with a growth rate in the State as a whole during the same period of 1.5 percent per year. The relationship of growth in the Deschutes River Basin to growth in the State as a whole during this latter decade is likely to be typical of the future. On this basis, and in terms of preliminary estimates of future growth in State population (2.0 percent for 1960-80, 1.7 percent for 1S80-2000, and 1.5 percent for 2000-2010), future population in the Deschutes River B^isin might be expected to grow as follows: Table 6 ESTIMATED FUTURE POPULATION OF THE DESCHUTES RIVER BASIN (Population in thousands; rate of growth in % per year) 1960 1960-30 1980 1980-2000 2000 2000-2010 2010 Pop¦ Rate Pop¦ Rate Pop. Rate Pop. 43.6 0.8% 51.3 0.7% 58.9 0.6% 62.6 Table 7 shows a preliminary appraisal of the distribution of estimated future population between urban and rural areas and among the various cities of the Basin, assuming the growth rates shown in that table. The portion of Basin population in incorporated places has re- mained constant, at half of total population, for the past 20 years. For purposes of this preliminary analysis, it is assumed that there will be a gradual, small increase in the portion of total population in incorpor- ated places. On the basis of the assumptions made in Table 7, the portion of Basin population in urban places would rise to 52 percent in 1980, 54 percent in 2000, and 56 percent in 2010. ------- 9 Host rapid population growth in the Basin in the future is likely to be in the Deschutes Valley in and around Bend and Redmond. As the major city in the Basin, Bend is likely to attract a large share of additional population. Bend is also strategically located in relation to present and potential recreation areas. The area around Bend and Redmond would benefit from irrigation made possible by a proposed dam aL Benham Falls. Both Bend and Redmond are located on Che major north-south rail and highway facilities. Madras grew rapidly during the 1940-60 period, due to an increase in irrigation in that vicinity. The major impact of increased irrigation is nov? believed to be past, and the economy is likely to stabilize at the present level, v?ith only a small rate of increase. Potential consolidation of pine lumber mills at Prineville could limit employment growth there. Big Prairie dam, on the upper Crooked River, might have provided increased irrigation for the area around Prineville, but this dam was found economically unfeasible. Table 7 FUTURE POPULATION DISTRIBUTION, DESCHUTES RIVER BASIN (Population in thousands; growth rate is % per year) 1960 1960-80 1980 1980-2000 2000 2000-10 2010 Area Pop. Rate Pop. Rate Pop. Rate ?°P- TOTAL, Deschutes Basin 43.6 0.8% 51.3 0.77. 58.9 0.6% 62 .6 Rural (a) 21.9 0.6 24.7 0.4 26.8 0.3 27.8 Ten Incor. Areas,TOTAL 21.7 1.0 26.6 0.9 32.1 0.3 34.8 Bend 11.9 1.4 15.7 1.2 19.9 1.0 22.0 Redmond 3.3 1.0 4.0 0.9 4.8 0.8 5.2 Prineville 3.3 0.3 3.5 0.3 3.7 0.3 3.8 Madras 1.5 0.3 1.7 0.3 1.9 0.3 2.0 Six other cities 1.7 0.1 1.7 0.1 1.8 0.1 1.8 (a) Includes all population outside the ten incorporated municipalities. C. Future Land Use According to a survey in 1S60 made for the U. S. Soil Conservation Service, not much change in land use is anticipated in the Basin during the ------- 10 next fifteen years. Present and future land use, as estimated in that survey, are shown in Table 8. For purposes of this preliminary analysis, it is assumed that the land use pattern reflected by Table 8 will continue for the entire study period. Table 8 PRESENT AND ESTIMATED FUTURE LAND USE CROOK, DESCHUTES AND JEFFERSON COUNTIES Acres, thousands Type of Land use 1960 1973 Federal—''' 2,612 2,612 Cropland 260 260 Pasture and range 1,016 1,046 Forest and woodland 1,00S S97 All other 85 67 Total 3-county acreage 4,9S2 4,982 —^ Includes U. S. Forest Service, B. L. M., and Bureau of Indian Affairs. ------- |