DAVID GREENE, HOST:
Let's head now to one of the driest places in the country. It's a ribbon of three counties in the high desert of northern Nevada. This year's severe drought in the West has seen that part of the state declared a federal disaster area. It's one of the most important alfalfa growing regions in the entire country, and also home to a dairy industry that helps to keep expanding, despite this year's extreme hardship.
Here's NPR's Kirk Siegler.
KIRK SIEGLER, BYLINE: When Pete Olsen talks about drought on his fifth generation dairy farm in Fallon, Nevada, he's really talking about the snowpack 60 miles to the west in the Sierra Nevada.
PETE OLSEN: Yeah, the Sierras are our lifeblood.
SIEGLER: That is, the snow melt from them that feeds the Truckee River and a tangle of reservoirs and canals that make this desert bloom. Some of the highest grade alfalfa in the world is grown here. It makes perfect feed for dairy cows because it's rich in nutrients.
(SOUNDBITE OF MILKING BARN)
OLSEN: We milk 2,000 cows.
SIEGLER: But with the snowpack at historically low levels, feed will be in short supply. This is a big deal because the alfalfa that's grown here doesn't just stay local. There's demand for it in California, Asia and beyond.
OLSEN: Depending on how bad it is, it could be daunting to try and find all the feed that we need.
SIEGLER: Olsen watches 60 of his milk cows lumber up onto a metal platform in a barn. Workers back them up and hook them onto milking machines. Nevada's dairy industry, like most of the state, was hit hard in the recession.
OLSEN: And we're starting to see a little light at the end of the tunnel and now we get this drought.
SIEGLER: And there's another problem. This drought has come just as dairies like Olsen's are under pressure to expand, even double the size of their herds. A massive new powdered milk processing plant is scheduled to open.
WESLEY CLARK: We're doing the finishing touches to get the plant up and running here in the next month.
SIEGLER: This is Wesley Clark, manager of the $50 million plant. All of the powdered milk processed here will head to China where demand is huge. Right now, local dairies can churn out about 800,000 pounds of milk a day. But once this plant's online, 1.2 million more pounds per day will be needed. That means thousands more cows, and a lot more alfalfa, which takes a lot of water to grow.
Does the drought threaten the dairy industry's expansion here? You bet.
CLARK: We've got customers secured, and customers, they need it now. They need it before we even start.
SIEGLER: Local and state officials aggressively courted the plant here with tax incentives. Promotional literature touted Nevada as a great place to relocate a dairy to, or expand one. There's that ideal climate for growing alfalfa hay. There's ample water, they said. But this latest drought, and predictions of more like it to come, is raising questions about the long-term viability of farming in the arid West.
KELLY REDMOND: It's hard to believe that we can add a lot more agriculture in Nevada.
SIEGLER: Kelly Redmond studies farming and climate in the Great Basin as a climatologist at the Desert Research Institute. It's a federally-backed lab in Reno. Redmond says farmers in Nevada are increasingly competing for water with thirsty desert cities like Las Vegas.
REDMOND: That's where the money and the power is and ag has sort of given way to this, bit by bit.
SIEGLER: Nevada was the driest state in the nation even before this historic drought. And the only reason farming is even possible here is that a century ago, the Bureau of Reclamation built the first ever federally funded dam and diversion project. It allowed water to plunge off the Sierra Nevada and down into farms in Fallon and beyond.
REDMOND: The way ag adjusts is to try to become more efficient, have more efficient types of crops and just make better use of what water there is available for them.
SIEGLER: For now, the dairy industry here is just focused on the short term. The plants managers say they've started lining up contracts to bring in milk from outside this drought-stricken region, even though they'd rather not. It's more expensive and the quality isn't as good. As for dairy farmer, Pete Olsen, he says this spring, he'll likely grow less water-intensive alternatives to alfalfa, like the grain milo.
OLSEN: It's not something we've had a lot of experience with. We haven't had to use it, but if we had multiple years like this, this year we're considering it.
SIEGLER: Olsen doesn't know how much, if any, irrigation water he'll get come spring. He's still planning to expand to meet the demands of the new plant. But he'll do it cautiously.
OLSEN: My dad told me a long time ago, Nevada's a land of extremes, and it's been born out of my experience that he's been right. We'll be really dry this year, and next year, we'll get one of those gully washer winters that you'd wish it'd stop snowing.
SIEGLER: Olsen says he and other farmers are also looking to the west, the towering Sierra, and praying those gully washers will come yet this winter. Kirk Siegler, NPR News.