Feuer Frei!
07-30-11, 06:56 PM
As ponds evaporate, crops fail and the cost of hay mounts, Texas ranchers enduring one of the worst droughts on record are selling off their cattle in droves, a move likely to cause ripples across the globe.
The current drought is likely to be the costliest in a 12-month span, said David Anderson, a livestock economist with the Texas A&M University's Agrilife Extension Service. In May, Agrilife reported losses statewide at $1.2 billion. Anderson said an August report will likely tally the cost at three to four times that. The cost of the current drought may be even twice that of the previous most costly drought, which cost $4.1 billion in 2006.
Drought loss estimates are high this year in part because corn and other products are worth more this year. Strong global demand and tight supplies have helped push up prices for commodities.
Cotton supplies are low worldwide, and U.S. cattle numbers are the lowest since the 1950s. Ranchers 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 21/2 times what they did five years ago, and wheat is worth more than 11/2 times what it was in 2006.
Trouble with Texas' wheat production is just around the corner as well, Anderson warned. Farmers usually begin planting wheat at the end of summer, but the dry soil is making those prospects doubtful, he said.
"There's a hell of a bunch of cattle being sold," said Jerry Cunningham, owner of Coyote Creek Farm, which raises organic, grass-fed cattle in Elgin. Cunningham estimated his losses this year at $20,000 to $30,000 and said that it could take up to 10 years to build his herd back up.
"This will affect us a very long time. You've got years of carefully raised cattle," Cunningham said. "You're giving up their life's work. That's why you see grown men cry on TV when they lose their herds."
David Yancy said there have been "major sell-offs" at Lampasas Cattle Auction Inc., which he manages.
According to the U.S. Department of Agriculture, the Lampasas auction house sold 1,654 cattle and calves last week , more than twice the amount it sold at that point last year.
Most ranchers have been selling parts of their herds, but a few small ranchers have sold all their cattle, Yancy said. Despite the recent spike in supply, however, prices are good. Yancy said that's because cattle prices were recently at record highs.
The last two droughts Texas suffered through, one from 2005 to 2006 and one from 2007 to 2009, caused billions in damage but had more regional impacts.
As of last week, 75 percent of Texas was in exceptional drought, the most severe of five categories; almost 99 percent is in some form of drought. Meteorologists point to an especially intense La Niņa pattern as the primary cause of record-low rain coupled with unseasonably high heat.
The period from October to June is the driest on record, yielding just 10.97 inches of rain, compared with an average 25.53 inches for those months.
The lack of rain has caught up to Central Texas' soil, which is simply too dry to grow crops or grass, said Dennis Williamson , the state soil scientist for the USDA's National Resources Conservation Service.
Grass for grazing has become scarce, and hay, a common supplement or replacement for grass, has skyrocketed in price because of its short supply. Corn and grain feed, a more water-intensive way of feeding cattle, is also more scarce during drought.
This has forced ranchers to start selling off cattle, whether slaughter-ready or not. High supply at auctions has driven down the price of cattle and other livestock, giving ranchers less money to buy seed cattle. To build herds back up, ranchers will have to buy much more expensive 3- to 4-year-old cattle.
SOURCE (http://www.statesman.com/news/local/2010-2011-drought-likely-to-be-among-costliest-1663419.html)
The current drought is likely to be the costliest in a 12-month span, said David Anderson, a livestock economist with the Texas A&M University's Agrilife Extension Service. In May, Agrilife reported losses statewide at $1.2 billion. Anderson said an August report will likely tally the cost at three to four times that. The cost of the current drought may be even twice that of the previous most costly drought, which cost $4.1 billion in 2006.
Drought loss estimates are high this year in part because corn and other products are worth more this year. Strong global demand and tight supplies have helped push up prices for commodities.
Cotton supplies are low worldwide, and U.S. cattle numbers are the lowest since the 1950s. Ranchers 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 21/2 times what they did five years ago, and wheat is worth more than 11/2 times what it was in 2006.
Trouble with Texas' wheat production is just around the corner as well, Anderson warned. Farmers usually begin planting wheat at the end of summer, but the dry soil is making those prospects doubtful, he said.
"There's a hell of a bunch of cattle being sold," said Jerry Cunningham, owner of Coyote Creek Farm, which raises organic, grass-fed cattle in Elgin. Cunningham estimated his losses this year at $20,000 to $30,000 and said that it could take up to 10 years to build his herd back up.
"This will affect us a very long time. You've got years of carefully raised cattle," Cunningham said. "You're giving up their life's work. That's why you see grown men cry on TV when they lose their herds."
David Yancy said there have been "major sell-offs" at Lampasas Cattle Auction Inc., which he manages.
According to the U.S. Department of Agriculture, the Lampasas auction house sold 1,654 cattle and calves last week , more than twice the amount it sold at that point last year.
Most ranchers have been selling parts of their herds, but a few small ranchers have sold all their cattle, Yancy said. Despite the recent spike in supply, however, prices are good. Yancy said that's because cattle prices were recently at record highs.
The last two droughts Texas suffered through, one from 2005 to 2006 and one from 2007 to 2009, caused billions in damage but had more regional impacts.
As of last week, 75 percent of Texas was in exceptional drought, the most severe of five categories; almost 99 percent is in some form of drought. Meteorologists point to an especially intense La Niņa pattern as the primary cause of record-low rain coupled with unseasonably high heat.
The period from October to June is the driest on record, yielding just 10.97 inches of rain, compared with an average 25.53 inches for those months.
The lack of rain has caught up to Central Texas' soil, which is simply too dry to grow crops or grass, said Dennis Williamson , the state soil scientist for the USDA's National Resources Conservation Service.
Grass for grazing has become scarce, and hay, a common supplement or replacement for grass, has skyrocketed in price because of its short supply. Corn and grain feed, a more water-intensive way of feeding cattle, is also more scarce during drought.
This has forced ranchers to start selling off cattle, whether slaughter-ready or not. High supply at auctions has driven down the price of cattle and other livestock, giving ranchers less money to buy seed cattle. To build herds back up, ranchers will have to buy much more expensive 3- to 4-year-old cattle.
SOURCE (http://www.statesman.com/news/local/2010-2011-drought-likely-to-be-among-costliest-1663419.html)