COLLEGE STATION — With most of Texas suffering from a drought and the hottest summer months still ahead, agribusinesses across the state are feeling the heat. James Parker of Lubbock, region supervisor of West Texas for the Wilbur Ellis Co., said the drought is already having a negative impact on business.
“Business is down by at least 50 percent,” he said. “If the drought continues, nearly 25 percent of the farmers in our area will not make it.” Parker said the drought’s impact is not limited to agribusiness.
“There’s a trickle down effect,” he said. “For example, we’re not using as much fuel as we normally do, so our loss affects the business that we buy fuel from.”
Dr. Carl Anderson of College Station, Texas Agricultural Extension economist and professor, said when farmers are suffering, it is likely that agribusiness is doing worse.
“Nearly any time the producers’ incomes are in jeopardy, you’ll find that agribusinesses are in more danger than the producers,” he said. Anderson said agricultural production and agribusiness are restructuring, and the drought makes the restructuring more apparent.
“On the row crop side, production is shifting from cotton to grain,” he said. “We’re seeing producers switch to production that requires a lower volume of inputs.” Anderson said that shift is being felt by agribusinesses that provide inputs and services.
“I think you’ll find producers and businesses working together,” he said. “They need each other.” Anderson said the restructuring primarily affects those businesses catering to row crop producers. “It’s not all bad,” he said. “It’s just restructuring, but it happens to be going on during a drought.”
Dwayne Bair, manager of Edinburg Citrus Association, said he is concerned about the drought but is trying to stay positive.
“We have had terrific bloom,” he said. “If we have sufficient water, we would see a 20 percent increase in production.” Bair said the drought does affect his ability to sell his product.
“Our out-of-state customers know about the drought,” he said, “then they start thinking they need to buy from Florida, just to be safe.”
Bair said the citrus industry didn’t feel the negative impact of the 1996 drought.
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