Aug. 19, 1998

DROUGHT WORSE THAN 96; COTTON CROP'S ONE OF WORST EVER

COLLEGE STATION -- Texas agricultural producers have lost more than $2.1 billion in this year's drought, making it worse than the one they endured in 1996, according to loss figures released by the Texas Agricultural Extension Service.

"Actually, in production losses, this year's disaster is much more severe than the one two years ago," said Dr. Roland Smith, an Extension economist at Texas A&M University.

"If we were using 1996 prices to compute the value of lost production in 1998, the producer losses would be well above $2 billion," he explained. "Even with today's lower prices, we still are projecting the economic impact on the state's economy could approach $5.8 billion from this year's drought."

This projected impact on the state's economy is more than $800 million higher than the drought of two years ago.

Recent rains across the state should help ranchers, Smith said, but the rain was too little, too late for most dryland crops -- and may actually hurt some of them. For instance, the heavy rains and high winds in the Texas Winter Garden near San Antonio last week caused many cotton bolls to drop off completely. Rain also discolors cotton or makes it turn brown, causing price mark downs by cotton buyers.

In areas that received rain, cattle producers are getting a little breather, said Dr. Larry Boleman, Extension livestock specialist. The temperatures are cooler, ranchers are growing a little grass and cattle just feel better.

"We still will need rain to keep the cows," he said, "but it should halt the constant going-to-town with cattle for a little while."

Recent rains also could help hay producers, Boleman said. If temperatures remain moderate and cattle are not put back on hay meadows, they could produce a "salvage" crop.

Here's a quick look at the drought's impacts on other commodities:

*Cotton. Only 3.3 million acres of upland cotton -- 3.1 million bales -- are expected to be harvested this year, said Dr. Carl Anderson, Extension economist. The harvest is 40 percent less than that of 1997 and 29 percent less than 1996, causing a total of $704 million in direct losses to cotton producers. Irrigation and other added production costs are contributing $45 million to the total loss.

"This is one of the worst cotton crops ever," Anderson said. There have been other years when several weather-related factors contributed to losses, but this year only one -- the unrelenting, searing heat -- demolished the crop. Large acreages of the state's crop never germinated after it was planted, only about half of the dryland cotton produced a crop, and even irrigated cotton is suffering in the heat.

The last stunted crop was in 1992 when 5.5 million acres were planted and only 3.5 million acres were harvested.

*Corn and sorghum. Drought has hit corn and sorghum hardest among Texas grain crops. Producer losses are pegged at $255 million and $140 million, respectively, according to Dr. Mark Waller, Extension economist. The combined economic impact to the state from production losses is estimated at about $1.3 billion.

"Even under irrigation," Waller said, "the extremely hot and dry conditions hampered the pollination process, particularly in corn." Additionally, irrigation costs are higher.

Price discounts on corn associated with aflatoxin contamination and other quality problems have significantly added to producers' losses.

*Wheat. The timing of the dry weather actually helped the Texas wheat crop. Rains in the spring and dryness in the summer helped increase wheat yields this year by an average of 22 percent, Waller said.

"The drought didn't start until the middle of March," he said. "There was enough soil moisture so the crop was able to get what it needed to produce bigger yields. And we didn't have the normal amount of disease pressure because of drying conditions as we moved on into the crop year."

"We've got the largest forecasted U.S. carryover supply of wheat for this marketing year that we've had since 1990-91 and consequently, this is the first year in quite a while that we've seen some serious sub-$3 wheat prices," Waller said.

Even so, the drought, if it lingers, could impact the Texas crop next year. Wheat planting for 1999 normally starts in August and September, Waller said, and without timely rains, the crop could get off to a poor start.

*Fall Vegetables and Citrus. Some rains have come to the Rio Grande Valley, but reservoirs the main water supply for agriculture are still only estimated to be at 19 percent of normal. About one-third of the irrigation districts in the Valley have depleted their yearly water allocation for agriculture.

Because of a lack of irrigation water, a substantial number of citrus trees have been wilting, and some fruit production has shut down. Exact losses have not been determined.

Dr. Jason Johnson, Extension economist in Weslaco, estimates that 14,600 farm-related jobs, most of them part-time and seasonal, have been lost in the Valley because of the drought. Agribusiness accounts for about 25 percent of the jobs in that region.

Agriculture-related industries employ at least 20 percent of the workforce in 192 counties in Texas, Smith noted.

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