Texas ag losses could set new record amid drought

[July 27, 2011]  LUBBOCK, Texas (AP) -- Randy McGee spent $28,000 in one month pumping water onto about 500 acres in West Texas before he decided to give up irrigating 75 acres of corn and focus on other crops that stood a better chance in the drought.

He thought rain might come and save those 75 acres, but it didn't and days of triple-digit heat sucked the remaining moisture from the soil. McGee walked recently through rows of sunbaked and stunted stalks, one of thousands of farmers counting his losses amid record heat and drought this year.

The drought has spread over much of the southern U.S., leaving Oklahoma the driest it has been since the 1930s and setting records from Louisiana to New Mexico. But the situation is especially severe in Texas, which trails only California in agricultural productivity.

McGee is still watering another variety of corn, cotton and sorghum but the loss of nearly one-sixth of his acres after spending so much on irrigation weighs on him.

"Kind of depressing," the 34-year-old farmer said. "You use that much of a resource and nothing to show for it. This year, no matter what you do, it's not quite enough."

About 70 percent of Texas rangeland and pastures are classified as in very poor condition, which means there has been complete or near complete crop failure or there's no food for grazing livestock. The crop and livestock losses could be the worst the state has seen -- perhaps twice the previous single-year record of $4.1 billion set in 2006, said David Anderson, an economist with Texas AgriLife Extension Service.

Part of the reason for the high dollar figure is that while farmers have lost a lot, the corn and other products they are losing are worth more this year. Strong global demand and tight supplies have helped push up prices for commodities like corn, cotton, wheat and beef.

Cotton supplies are low worldwide, and U.S. cattle numbers are the lowest since the 1950s. Livestock farmers and ethanol producers are competing for corn, driving up those prices, and wheat is costing more in part because Russia banned exports after a drought there last summer.

Cotton and corn are selling for more than 2 1/2 times what they did five years ago, and the price of wheat is more than 1 1/2 times what it was in 2006.

"This was a year farmers might have done well," Anderson said.

Consumers will eventually see the cost of the drought passed on to them, although it's hard to say by how much, since processing, marketing, transportation and other costs also play a big role in retail prices, he said.

Texas' economy will take a more direct hit. Agriculture accounted for $99.1 billion of Texas' $1.1 trillion economy, or 8.6 percent, in 2007, the most recent year data on food and fiber was available from the extension service. Losses in that sector have a ripple effect that's about twice the amount of the actual agricultural loss.

"That's a fairly substantial portion of the Texas economy that's going through this hardship," Anderson said.

And, it's a hardship that's following close on the heels of others. Texas suffered droughts in 2005-06 and 2008-09, although those were mostly regional. This year's is broader and more intense. The state is coming off its driest nine-month period ever and its hottest June on record. More than 90 percent of the state is in the two most severe drought stages.

Thousands of acres of crops have failed in areas where farmers rely on rain, while those grown with irrigation continue to struggle. Already, more than 2 million acres of cotton that's not irrigated has been lost, adding about $1.1 billion to an initial $1.5 billion loss agriculture officials announced in mid-May. That included livestock and wheat, corn and sorghum crop losses from November through May 1.

"It's ugly right now," said cotton farmer Rickey Bearden, who hasn't had a good rain since October on his 9,000 acres on the South Plains, the world's largest contiguous growing patch. "This one, we were all hopeful of a really good price and a good crop. It just doesn't seem like this is going to be the year for it."

Some ranchers have begun culling their herds because the cattle have nowhere to graze and prices are high for supplemental feed and hay. They're sending more animals to auction and selling calves earlier. Old cows are being sold, and in some cases, ranchers are getting rid of animals normally considered vital to future production -- heifers and 3-year-old to 6-year-old cows.

"It's heartbreaking," said Debbie Davis, a rancher northwest of San Antonio. "Anyone that needs a little extra care, they've got to go."

The situation isn't likely to improve soon: forecasters predict Texas' drought will persist through September.

Davis has been having alfalfa trucked in from Nebraska to feed her cattle at a cost of $240 per ton -- $60 of that for transportation. She said she loves ranching, but times like these give her pause: "It makes me want to buy land somewhere else."

[Associated Press; By BETSY BLANEY]

Associated Press writer Betsy Blaney can be reached at http://twitter.com/betsyblaney.

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