AGRICULTURE DROUGHT LOSSES APPROACHING ’96 LEVELS

COLLEGE STATION — Without substantial rains, this year’s drought may be a worse disaster for Texas agriculture than the severe drought of 1996.

Texas Agricultural Extension Service economists today estimated that the current drought will cause $1.5 billion in losses for farmers and ranchers and painfully squeeze $4.6 billion out of the Texas economy over the next 18 months.

This is three times the estimates the economists made only a month ago, and they say loss totals will only increase as the drought continues.

“This year’s drought could easily wind up being worse than 1996 if we don’t get significant rain soon,” said Dr. Roland Smith, the Extension economist in College Station who helped compile estimates of drought losses reported from around the state.

The drought two years ago, one of the state’s worst natural disasters on record, handed producers losses of $1.9 billion and slashed about $5 billion from the Texas economy.

Texas producers annually earn about $14 billion in cash crop receipts in good years, contributing about $45 billion to the Texas economy. One out of five jobs in the state is, in some way, related to agriculture. With a projected producer loss of this magnitude, the 1998 drought could ultimately impact about 40,000 jobs statewide, according to Dr. Joe Outlaw, an Extension agricultural economist in College Station.

If rains break this drought soon, producers in the Lubbock area could plant “catch,” or substitute crops and recover some of their cotton losses, much as they did after the 1996 drought, Outlaw said. However, if current weather predictions of a hot, dry summer hold true, that is not likely.

At the other end of the state, citrus producers are fighting to keep their orchards alive. Some citrus producers in the Rio Grande Valley have been unable to irrigate their crop for the last nine weeks, according to Gary McBryde, interim assistant director for the Texas A&M-Kingsville Citrus Center in Weslaco.

“At this point, producers are not just worried about their yields, they are fighting to keep their trees alive,” McBryde said.

As long as farmers are able to irrigate their citrus trees, the crop will do well, he said.

“However, in the near future, up to half of the irrigation districts in South Texas are expected to shut down their systems,” McBryde said. This means that water districts simply will not be putting water into irrigation canals.

Economists estimate that in the Rio Grande Valley half of the normal production of fall vegetables likely will not get planted due to a lack of irrigation water, resulting in $55 million in losses.

Consumers already are seeing the impacts of the reduced horticultural crops through higher retail prices and the lack of certain, preferred Texas-grown produce.

Current estimates put lost cattle revenues at $44 million and do not yet account for cattle producers who have begun selling lightweight calves and those culling their cow herds in the last few weeks due to the lack of grass. Outlaw only expects this sell-off of livestock to escalate over the next six weeks if the drought continues.

The forced liquidation would mean higher consumer beef prices than otherwise would be expected in 1999, Smith said. As more cattle hit the market, hamburger prices will actually decline in the short term, he explained, but the prices of all beef cuts would run higher a year from now because of the reduction in cattle numbers.

According to the National Weather Service, all 10 climatic regions within the state received rainfall that was well below normal from April to June — a critical time in the production of corn, cotton, sorghum, wheat and forage. For example, the lower Rio Grande Valley received no measurable precipitation during May and stood at 96 percent below normal for the 90-day period ending June 30.

The rest of the state averaged from one-tenth to one-fourth of the normal amount of rainfall for the same period.

By contrast, only two of the 10 climatic regions were estimated to be below normal precipitation for December through February. Unfortunately, the Trans-Pecos region and the Southwest Texas area were the two districts — and they partially impact the reservoir levels on the Rio Grande River that is so critical for community water supplies and irrigation water in the Lower Rio Grande Valley, Smith said.

“The economic impact goes well beyond the farm gate,” Smith said. It is hoped the situation will not worsen, but only significant and widespread rainfall will provide much relief for Texas agriculture, he said.

The Texas Agricultural Statistics Service this week indicated that half of the Texas sorghum crop was rated as ‘poor’ or ‘very poor’ and 70 percent of the range and pasture land was scored in these categories. This is in marked contrast to 1997 when only 5 percent of the sorghum and pasture land was rated in the ‘poor’ to ‘very poor’ category, Outlaw said.

In the meantime, 94 Texas counties are applying for disaster relief because of the drought. County Extension agents and representatives of county offices of the Farm Services Agency, U.S. Department of Agriculture, are providing additional information on available assistance programs and management responses to the drought.

Cotton, the number one cash crop in Texas, is under severe drought stress statewide. Unrelenting hot, dry weather will slash more than $500 million from cotton farmers and $1.8 billion from the economy, according to Dr. Carl Anderson of College Station, Extension economist. The lost income hits local rural businesses hardest.

Anderson said even irrigated cotton is under stress. Yields for irrigated cotton may be reduced by 15 percent or 100 lb/acre statewide without good rains.

Corn and sorghum are the two most drought-stricken grain crops in Texas. Producer level losses are pegged at $225 million and $140 million, respectively, for these two commodities. The combined overall economic impact from production losses on the two feedgrains is estimated at about $1.2 billion.

“Dryland corn and sorghum losses will be in the 40 percent to 70 percent range,” said Dr. Mark Waller of College Station, Extension economist in grain marketing. Irrigated corn and sorghum losses could range from 15 percent to 40 percent.

Hay production will be down sharply in the state this year.

“Losses of hay production range from 80 percent in parts of East Texas to 30 percent in other regions,” said Greg Clary of Overton.

It is estimated the production value of lost hay production will approach $330 million statewide for a total economic impact value totaling $1.1 billion. The first cutting of hay this summer was short due to dry weather and most forage producers also missed the traditional second cutting due to inadequate forage growth.

Here are current estimated producer losses by commodity:

Cotton $500 million

Corn $225 million

Sorghum $140 million

Forage Crops $330 million

Horticultural Crops $100 million

Livestock $44 million

Added Livestock Feed Cost $136 million

Projected Total Losses $1,475 million

Contacts: Dr. Travis Miller, College Station, Extension agronomist,

(979) 845-0884

Dr. Joe Outlaw, College Station, Extension economist-management, (979) 845-3062

Dr. Carl Anderson, College Station, Extension economist-cotton marketing, (979) 845-8011

Dr. Mark Waller, College Station, Extension economist-grain marketing, (979) 845-8011

Dr. Ernest Davis, College Station, Extension economist-livestock marketing, (979) 845-4351

Dr. Danny Klinefelter, College Station, Extension economist-management, (979) 845-7171

Dr. Jason Johnson, Weslaco, Extension economist-management, (956) 969-5639

Dr. Greg Clary, Overton, Extension economist-management, (903) 834-6191

Dr. Jose Pena, Uvalde, Extension economist-management, (830) 278-9151

Dr. Larry Falconer, Corpus Christi, Extension economist-management, (512) 265-9203

Dr. Robert Schwart, College Station, Extension economist-dairy marketing, (979) 845-5284

Dr. Steve Amosson, Amarillo, Extension economist-management, (806) 359-5401

Dr. Jackie Smith, Lubbock, Extension economist-management, (806) 746-6101

Stan Bevers, Vernon, Extension economist-management, (940) 552-9941

Dr. Ken Stokes, Stephenville, Extension economist-management, (254) 968-4144

Dr. Roland Smith, College Station, associate department head, Department of Agricultural Economics, (979) 845-1751

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