Drought Impact on Agriculture Approaches $1.5 Billion Early in David P. Anderson J. Mark Welch John Robinson. Texas AgriLife Extension Service

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1 DroughtImpactonAgricultureApproaches$1.5BillionEarlyin2011 DavidP.Anderson J.MarkWelch JohnRobinson TexasAgriLifeExtensionService Thedryweatherthatbeganinthefallof2010hasexpandedandintensifiedin2011.InearlyAugust, 2010theDroughtMonitorshowedthatover90%ofTexaswasdroughtfreeandonly2.5%inmoderate orworsedroughtconditions.rangeandpastureswererated80%fairorbetter.bynovember2 nd over 50%ofthestatewasatleastabnormallydryandtheconditionofrangesandpastureswas31%poor andverypoorand69%fairorbetter.thenewlyplantedwheatcropwasratedas70%fairorbetter.by March,100%ofthestatewasabnormallydry.ThemostrecentDroughtMonitor,May10,2011,shows 100%ofthestatewithatleastabnormallydryconditionsand82%classifiedasextremeandexceptional. Priortothisspring,thelasttime100percentofTexaswasclassifiedinadroughtwasMarch2009and June2006.

2 Evenwiththeseverityofthecurrentdrought,estimationofeconomiclossesisdifficultgiventhatwe arestillearlyinthegrowingseason.muchofthestatehasyettoplantspringrowcropsandthereisstill timeforweatherpatternstochange.butforwheatgrowers,cottonandgrainfarmersincentraland SouthTexaswhohaveplantedorarefacingfinalplantingdeadlines,andrancherssupplementalfeeding onshortpastures,eachdaywithoutrainfallisoneinwhichcropandlivestocklossesmount. Droughthasnumerousimpactsinthefarmcommunity.Itnotonlyreducesfarmers incomefromlost cropproduction,itresultsinfewerdollarsspentonfarminputs.withdryconditionsatplanting, farmersarelikelytodelaythepurchasesoffertilizer,seed,pesticides,andotherinputsuntiltheygetthe cropupandofftoagoodstart.ifitstaysdry,farminputsupplierswillexperiencereducedsales,the consequencesofwhichripplethroughthefarmcommunity.followingisadiscussionofdrought impactsbymajorcommodity:livestock,grains,andcotton. Livestock Itiscommonforrancherstosupplementrangeandpasturefeedresourcesoverthewinter.Theongoing drought,however,hasforcedrancherstostartfeedinghayearlierintheseasonandtoincreasethe amountfedduetolackofpasturegrowth.thisincreasedfeedingcostovernormallevelsisadirect economicimpactonthelivestockproducers. Thesuddensevereonsetofthedroughthasforcedlivestockproducerstopurchaseevenmorehay, drivinguppricessharply. CalvesarecommonlygrazedonwheatpastureinTexas.WheatisplantedintheFallandthecalvesgraze onthevegetativegrowth.inthespring,thecalvesaremovedtootherpasturesandthewheat continuestogrowforharvestasgrainlaterintheearlysummer.thelackofrainhasreducedwheat grazingproductionresultinginlessforageavailableandlostincomefromgrazing. Livestockeconomicimpactsincludetheeffectsofincreasedfeedingcostsandlostvalueofwheat pasturegrazing. Theeconomicimpactofdroughtforlivestockisestimatedtobe$1.2billion fromnovember,2010untilmay1,2011.thatincludesincreasedfeeding costsandlostvalueofwheatpasturegrazing. TexasisthelargestbeefcowproducingstateintheUnitedStates,withmorethan5millionhead.More than90percentofthestate sbeefcowsarelocatedincountiescategorizedasbeinginsevereto Exceptionaldrought.Theeffectsofdroughtonlivestockgowellbeyondtheimmediateyear.Drought resultsinreducedconceptionratesandfewercalvesbornthenextyear.thelackoffeedresultsinlower cattlesaleweightsandforcesrancherstosellcattleearlier.rangeandpasturerecoveryfromdrought cantakemultipleyearsandcanresultinreducedstockingrateswhilerangesrecover.thisdroughthas beensevereenoughthatmanystocktanksprovidingwaterforlivestockhavebecomedangerouslylow ordry.thisrequiresevenhighercoststohaulwaterdairytomeetlivestockneeds.

3 Grains Lastfall,Texasfarmersplanted5.65millionacresofwinterwheat.Cropconditionshavedeteriorated overthewinterwiththepercentratedaspoorandverypoorclimbingfromlessthan30percentin Novembertoabout70percenttoday.Theconditionscoresofthisyear scroptrackcloselywiththose of2009and2006.inthoseyearstheaverageyieldwas25and24bushelsandthepercentofacres plantedthatwereharvestedwere38and25.thelongtermaveragewheatyieldintexasis30bushels peracreandwenormallyharvest50percentoftheacressown Texas Winter Wheat Condition Ratings and Average Wheat Yield/% Harvested % CCI bu/38% 24 bu/25% /24 10/31 11/7 11/14 11/21 11/28 12/5 12/12 12/19 12/26 1/2 1/9 1/16 1/23 1/30 2/6 2/13 2/20 2/27 3/6 3/13 3/20 3/27 4/3 4/10 4/17 4/24 5/1 5/8 5/15 5/22 5/29 6/5 6/12 6/19 6/26 7/3 Very Poor Poor Fair Good Excellent CCI=(VeryPoor*1)+(Poor*2)+(Fair*3)+(Good*4)+(Excellent*5) Assumingthatthecropconditionsof2011continueontheircurrenttrack,wecanexpecttotalTexas wheatproductionin2011tobeabout34millionbushels.thiswouldcomeoff25percentharvested acresandanaverageyieldof24bushels.highwheatpricesin2011willoffsetsomeoftherevenuelost topoorwheatyieldsforthosefarmerswhostillmakeacrop.pricesareup50percentto$8.08per bushelcomparedtothe2010annualaveragepriceof$5.25.thetotalvalueofthisyear scropis currentlyestimatedat$274million,abouthalfofthefiveyearaverageof$555million($281million). Thelowharvestedpercentageiscompoundedbyseveralfactorsinadditiontothedrought:1)record highcalfpricesincreasethevalueofwheatforgrazing,especiallyifgrainproductionprospectsarepoor and2)recordhighcottonpricesofferincentivesforproducerstoterminateapoorstandofwheatin hopesofproducingahighvaluecottoncrop.

4 PreliminaryEstimatesforTexasWheat2011 5yraverage Annual%Change %ofnormal Plantedacres(mil) % 95% Harvestedacres(mil) % 48% Yieldperacre(bu) % 78% Production(milbu) % 35% Price($/bu) % 139% ValueofProduction($mil) % 49% TheimmediatedroughtimpactsonTexascornandsorghumarealackofadequatetopsoilmoisturefor seedgerminationanddeepersubsoilmoisturetosustaincropsthatareup.farmersinsouthand centraltexasneedtoplantcornatthistimeofyeartoavoidsilkingandpollinatingintheheatof summer.lateseasoncornismoresusceptibletomoldinfestationandaflatoxincontamination.the impactofhighlevelsofaflatoxinrangefromdiscountsinpricetotherequirementtodestroythegrain altogether.grainsorghumisamuchmoredroughthardyplantthatrequireslowerinputsthancorn, butalsogenerallyproducesloweryieldsandareceivesalowerprice.whilethewaterneedsofsorghum increaseduringitsreproductivestagesinsummeraswell,sorghumcanbettertolerateheatandshort periodsofwaterstress. PercentofTopsoilMoisturethatisShortandVeryShortbyCropReportingDistrict. % of Acreage with Short and Very Short Top Soil Moisture 98% 97% 71% 74% 96% 94% 97% 94% 100% 96% 83% Source: USDA and NASS Source:TexasCropWeather,NASS,April19,2011

5 Cotton GiventheregularoccurrenceofdryweatherinWestandSouthTexas,andthe lateplantingdateinwesttexas,itisnotunusualtobefacinguncertaintyaboutthelevel andconditionofcottonplantingsintexas.asthewesttexascropisnotusuallyplanteduntil May,thereisstilltimeforconditionstochange