September 08, 2008

2008 Texas drought losses estimated at $1.4 billion

By: Blair Fannin, 979-845-2259  
Contact(s): Dr. Carl Anderson, 979-845-8011, canderson@tamu.edu
Dr. David Anderson, 979-845-4351, danderson@tamu.edu

 
COLLEGE STATION – Lack of rain and scorching temperatures hit Texas’ agricultural crops and beef operations hard late spring and summer, leading to an estimated $1.4 billion in drought losses, Texas AgriLife Extension Service economists reported Monday.

Crop losses were estimated at $1.1 billion, while livestock losses tallied $260 million, which includes lost hay production, added supplemental feed costs and other production expenditures.

“The hardest hit area by the drought was along Interstate 35, and east across the state,” said Dr. Carl Anderson, professor emeritus and AgriLife Extension economist.

Weather-related devastation has hit Texas’ agricultural industry for three consecutive years. In 2007, record rainfall flooded crops in South Texas and led to $200 million in losses. Statewide drought in 2006 totaled $4.1 billion in losses – one of the worst since the 1950s.

Though Texas received rain in August that raised prospects for fall wheat production, it wasn’t enough for cotton, corn, grain sorghum and hay crops in the central, eastern and southern parts of the state, Anderson said.

“Corn, sorghum and cotton yields are expected to be less than half those of the bumper crops last season,” Anderson said. “Cotton was also damaged in a widespread area across West Texas to New Mexico by lack of moisture, blowing sand and high temperatures at planting time.”

Severe weather destroyed 1.3 million acres of the 4.7 million cotton acres planted in Texas, he said.

Cotton was the leading commodity most severely impacted by drought, followed by hay, cattle, corn, grain sorghum and wheat.

Key cattle-producing parts of Texas have been hardest hit by drought, said Dr. David Anderson, AgriLife Extension livestock marketing economist.

“Approximately 52 percent of the state’s beef cows are in drought-affected areas,” he said.

Texas, Oklahoma and Louisiana, the U.S. Department of Agriculture federally inspected cow slaughter reporting region, reported 134,000 more cows slaughtered through Aug. 23 than the same period the year before, he said.

“Much of that culling may be assumed to be due to drought,” he said. “Texas accounts for the majority of the cows in that region.”

Sales of calves through auction barns are reported above the same period last year, “providing supporting evidence of early than normal calf sales,” he said.

“Early selling due to drought has been particularly harmful this year due to the market incentive for heavier weight calves because of high feed costs,” David Anderson said. “Lighter weight calves, caused by lack of feed and earlier than normal sales, have been more heavily penalized in the market than in past years.”

Range and pasture conditions were classified by the USDA as mostly fair to poor statewide this summer.

“Hay production was severely reduced,” Carl Anderson said. “Due to high fertilizer prices, some hay fields and pastures were not fertilized. Supplemental feeding of beef cattle began in June. By mid-summer, most cow-calf operators were forced to feed hay, protein and mineral supplements. Due to bare pastures and depleting hay supplies, much of the hay fed was from last year’s abundant crop.”

The financial impact from lost production will continue for Texas’ farmers and ranchers, Carl Anderson said.

“High fuel, feed and fertilizer costs have increased production expenses and will erode cash flow for producers,” he said. “Producers are collecting some insurance based on individual coverage on crops and livestock. Many cow-calf operators have taken out larger loans to pay for supplemental feed costs.”

Late August rainfall has helped improve grazing conditions, Carl Anderson said.

“Green grass is always a welcomed sight to ranchers and may help their pastures recover to some extent this fall,” he said. “With hay supplies depleted, many ranchers will still have a difficult time locating enough forage to feed their cattle through winter.”

In West Texas and the Panhandle, moisture conditions are favorable.

“Because the growing season for crops in this region is much later, crop production remains uncertain at this time.”

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