August 14, 2006

 

Drought takes a heavy toll on US farmers in Texas

 

 

Estimated drought losses for Texas have reached US$4.1 billion, Texas Cooperative Extension economists reported Friday (Aug 11).

 

Crop losses are estimated at US$2.5 billion while livestock losses at US$1.6 billion, according to the report. The current drought could be the worst ever in Texas, officials said.

 

The dry weather is poses a major bugbear for farmers already facing rising input costs, especially that from energy, said Dr Carl Anderson, professor emeritus and Extension economist.

 

Similarly, irrigation costs have skyrocketed and would reduce earnings from irrigated crop production.

 

Parts of Texas were have been facing drought conditions for more than a year and previous hay supplies were used to feed livestock for the summer and winter, said Dr Travis Miller, Extension agronomist.

 

With much of the corn and soybean crop already harvested for silage or hay, there is barely food for animals. The state is now having to truck in water supplies and hay from out-of-state to maintain their livestock.

 

Anderson said projected economic losses are expected to reach US$8 billion if the losses of the agribusiness, which sells equipment and services to farmers and ranchers, are included, Anderson said.

 

Much of the corn in Central Texas has been made into silage or hay and most of Northeast Texas soybean crop has been cut for hay to supply dairy operations.

 

Only 1.4 million acres of wheat were harvested, the smallest acreage since 1925, Miller said.

 

Anderson estimates that three quarters of the land and pasture is too dry to produce much grazing or hay that is harvestable, he said.

 

As rains are virtually non-existent, there may be massive selling of livestock herds as rising hay and feed costs, compounded by the lack of drinking water, force ranchers to sell their herds.

 

Cattle sales are up sharply from a year ago, Anderson noted. This reduction would impact beef supplies for several years as it would take time to rebuild the diminished herd. Furthermore, this year's calves would also be smaller due to the low quality of nutrition.

 

Agricultural banks are reporting fewer loan repayments and more requests for loan renewals and extensions from a year ago, according to the Federal Reserve Bank.

 

Many ranchers have taken out larger loans because of higher feed costs. Some cattle farmers have also been forced to seek alternative incomes as rising energy and feed costs put them out of business, Anderson said.