Texas Drought Losses Are $5.2 Billion & Counting

Further drought-induced losses could continue if no rainfall is received for the remainder of year.

August 19, 2011

5 Min Read
Texas Drought Losses Are $5.2 Billion & Counting

The historic Texas drought has led to a record $5.2 billion in agricultural losses, making it the most costly drought on record, according to Texas AgriLife Extension Service economists.

“The drought of 2011 will have a lasting impact on Texas agriculture,” says Travis Miller, AgriLife Extension agronomist and a member of the Governor’s Drought Preparedness Council.

The record $5.2 billion in losses exceeds the previous record of $4.1 billion during the 2006 drought. The losses also represent 27.7% of the average value of agricultural production over the last four years, says David Anderson, AgriLife Extension livestock economist.

And the damage is far from over. “This drought is ongoing,” Anderson says. “Further losses will continue if rainfall doesn’t come soon to establish this year’s winter wheat crop and wheat grazing.”

The current drought losses have reached record levels in large part due to Texas farmers failing to cash in crops during times of high commodity prices. The state’s cattle producers continue to cull herds at historic levels and spend money on expensive supplemental feed.

“Livestock losses include the increased cost of feeding due to lack of pastures and ranges and market losses,” Anderson says. “Market losses include the impact of fewer pounds sold per calf and the impact of lower market prices due to the large number of cattle sold in a very short time period.”

Here’s a look at losses by commodity:

  • Livestock: $2.06 billion (includes $1.2 billion previously reported in May)

  • Lost hay production value: $750 million

  • Cotton: $1.8 billion

  • Corn: $327 million

  • Wheat: $243 million

  • Sorghum: $63 million

The $5.2-billion total takes into account $1.2 billion in drought losses previously reported by AgriLife Extension in May, which were primarily livestock-related losses due to added supplemental costs and lost grazing.

The drought began for much of the state in September 2010, Miller says. “Much of the Gulf Coast, Central, West Texas and the High Plains had seen abundant moisture in the summer from Tropical Storm Hermine and other rainfall events. An unusually strong La Nina pattern moved into place in fall 2010, which had an impact comparable to turning off the ‘rainfall switch ’for most of Texas and surrounding states.”

October 2010 through July 2011 was the driest 10-month period in recorded Texas weather, Miller says. “The drought, coupled with prolonged high winds and record temperatures, was enormously destructive to Texas agriculture and natural resources,” he says. “The summer rains caused grass growth, which provided fuel for an unprecedented fire season, with more than 3.3 million acres of Texas ravaged by wildfire.

“This destructive climatic pattern has taken a huge toll on crops and forages, and the timing could not have been worse for Texas producers, as all of the major ag commodities are enjoying strong prices,” Miller says.

Combined losses for wheat, corn and sorghum grain farmers in Texas due to drought are more than $600 million. Mark Welch, AgriLife Extension grains economist, says Texas wheat production in 2011 is about half what it would have been in a normal year.

“Wheat yields were down from a five-year average of 30 bu. to 26 bu./acre and abandonment was up,” he says. “Given this year’s plantings of 5.7 million acres, we would have harvested 2.8 million in a normal year. (Much of the wheat acres planted in Texas are grazed out and not harvested.) In 2011, harvested acreage is estimated at only 2 million acres, down 800,000 acres. The combination of yield losses on harvested acres and higher abandonment put Texas wheat-for-grain losses at $243 million.”

Texas corn production is estimated to be down about 30% in 2011, Welch says, with harvested acres down 16% due to higher abandonment rates.

“Yields are down 16% statewide,” he says. “Highlighting the severity of this year’s heat and dry conditions is that the most severe yield losses are seen in the irrigated corn grown in the Panhandle. The average corn yield in the northern High Plains is estimated at 165 bu./acre compared to a five-year average of 205 bu., down 40 bu./acre. Yield losses and abandonment will cost Texas corn producers about $327 million in 2011.”

Grain sorghum production in Texas, Welch says, is expected to be about half of normal in 2011. The 1.6 million acres planted spring marked the lowest in Texas history.

“Then drought lowered yields and raised abandonment rates,” he says. “The drought estimates for sorghum reported are based only on the yield and harvested acreage estimates from USDA. This totals about $63 million.”

“Perhaps the most telling thing about the 2011 drought was that even irrigated farmers weren’t spared,” Miller says. “While most Texas irrigation systems work well in normal or even below-normal rainfall, many irrigators found water supplies weren’t able to provide all of the water requirements of the crop in the absence of any rain and excessive heat. By mid-July, farmers began to try to stop (economic) losses, dedicating all of their water supplies to a reduced amount of acres as water demand from the crops was higher than their ability to supply it.”

The following is a list of economic drought losses from 1998 through 2011 compiled by AgriLife Extension economists:

  • 2011– $5.2 billion

  • 2009 – $3.6 billion

  • 2008 – $1.4 billion

  • 2006 – $4.1 billion

  • 2002 – $316 million

  • 2000 – $1.1 billion

  • 1999 – $223 million

  • 1998 – $2.4 billion

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