The commercial classroom: Weather - by Edward Smith

This column is offered to help educate agents new to commercial and investment brokerage and serve as a review of basics for existing practitioners. 

Watching today morning’s news is concerning at best, tornadoes throughout the midwest and major floods in Texas, Louisiana and the southern states.

But the biggest problems of all are droughts concerning the Colorado River. We will look at that in a moment.

Our planet is surrounded by atmosphere. The area closest to us is called the troposphere which extends from the earth up 5 to 7 miles. Then comes the stratosphere. From there extending up another 30 miles. The stratosphere absorbs 93% of the radiation (heat) produced by the sun. Which is why, with too much exposure to the sun, you get a sunburn. The problem is that countries on earth continue to burn fossil fuels, especially the heating systems in our building, creating carbon emissions. These effectively produce holes in the stratosphere allowing more of the heat (radiation) of the sun to affect our climate. Ice melting at the poles increase the depth of the oceans causing more powerful storms and weather paterns.

Ironically other parts of the planet have drought conditions as we have in the southwest, which also contribute to wildfires. The Colorado River runs from the Rocky Mountains to Mexico’s Gulf in California supplying water to 40 million people and irrigating more than five million acres in seven states: Arizona, California, Colorado, Nevada, New Mexico, Utah and Wyoming. The 1,450 mile river is primarily fed by winter snow melting into the river, which is collected by a series of dams and reservoirs for distribution. The USDA’s Natural Resources Conservation Service, through a series of 1,575 automatic stations, monitors snow water equivalent readings. On April 1 of this year they found the readings at the lowest level on record.

The water in the river is controlled by 15 dams, each with a reservoir behind called a lake and they all produce hydropower (electricity). The Glen Canyon Dam, backed by Lake Powell was built in 1966. It sells hydropower to six states, customers paying rates well below market prices. But the dams must maintain a certain level of water to be able to continue producing power. 

The most famous dam is the Hoover Dam. That is backed by the nation’s largest reservoir Lake Mead, which was built in 1936. The most recent readings show it to be only 29% full of it’s capacity. Forecasts suggest the water level could drop to below 1.035-ft. by next spring, at that point only a small number of the dam’s turbines can operate. So, we can see why the years of droughts, and the lack of snow fall last winter are bringing the area to possibly losing the ability to produce power in addition to the water crises.

There has been a water management plan between the seven states that share the river for the last 20 years, but it is expiring this year. Negotiations between the states are at impasse. The U.S. Bureau of Reclamation has proposed a 10 year plan to cut water use by up to three million acre-feet per year to maintain water levels in Lake Mead and Lake Powell. These issues are yet to be resolved.

Another concern is affecting the beef industry, the shrinking cattle herds. As of January 1, 2026 the nation’s herd count was about 86.2 million head, the smallest since 1951 and nearly 9% below its peak in 2019. The droughts have forced ranchers to sell animals earlier than planned which include breeding cows needed to rebuild herds. When pastures dry up, and hay becomes scarce and expensive, producers have no choice but to liquidate some of their herd. Fewer cattle means less beef and skyrocketing prices.

We have already seen extreme heat this year, over 100°, in many U.S. states in the southwest. In Utah the weather has caused six simultaneous major wildfires, the largest being the Cottonwood Fire, that is currently burning over 93,000 acres and the Iron Fire destroying 40,000 acres. 

The weather problems are occurring worldwide with temperatures setting records in Europe; Spain 113.2°, France 109.4°, Italy, Germany and forcing thousands of schools to close in the United Kingdom.

Edward Smith Jr., CREI, ITI, CIC, GREEN, MICP, CNS, e-PRO, AHWD is a licensed real estate broker in New York and Connecticut with Smith Commercial Real Estate, Sandy Hook, CT.