Texas ranchers have spent an additional $154 million in supplemental feed and water hauling expenses since summer of 1999 as a result of the ongoing drought that continues to plague the state, economists with the Texas Agricultural Extension Service report.
Stocks of hay that were thought to be adequate through the winter feeding season are almost depleted, with at least two months of feeding still expected even if there is future rainfall.
Texas beef cow numbers dropped by 100,000 during 1999, according to the Texas Agricultural Statistics Service and occurred during a year when ranchers were planning to rebuild herds after the sell--offs of 1996 and 1998 due to drought.
Ranchers have also not been able to participate in an improved cattle market as herd liquidations nationally the past four years and liquidations in Texas during 1996 and 1998 have severely decreased cattle inventories across the United States.
"We still haven't been able to start rebuilding herds to take advantage of these prices," said Dr. Ernie Davis, an Extension livestock marketing economist.
"If we don't get some good winter and spring rains, there's going to be people scrambling all over the place for hay. We'll see hay prices go up and see maintenance--ration prices go up. As a result, we'll see people continue to liquidate their herds. Some are not in the financial position to have to subsidize feed for their herds for another year.
"That's where most of our losses have been in these additional feed costs, and some ranchers are hauling water now."
Beef cattle stocker operators and dryland wheat producers lost income due to the drought affecting available forage from planned winter stocker operations. Extension economists estimated that $59 million could have been earned in the fall of 1999 had the drought not occurred. Feedlot placements
were up 18% in December compared to 1998, another indicator of poor range conditions.
Davis said the cattle inventory across the nation is at a low enough level that prices will continue to be strong.
"If Texas has a run at the markets, we'll have buyers coming in from all over the country because feedlots are scrambling for supplies," Davis said. "Last year's calf crop and this year's calf crop were small, and they are going to run out of feeder cattle."
Replacement heifers, female calves that are retained for breeding stock, have also been on the decrease. Davis said when ranchers begin retaining heifers for their herds, that affects feeder cattle supplies.
"Normally heifer--steer slaughter is 65% steers and 35% heifers," Davis said. "The last three years, the heifer slaughter rate has been running about 40 to 41% of total slaughter. It's been 5 to 6% higher than normal, meaning not many of those heifers are being held back. They're being taken to market, forced to slaughter just to get cash flow for the ranches. It's not a matter of profits, it's a matter of cash flow (for ranchers.)"
With the exception of the Coastal Bend and surrounding area where Hurricane Bret brought rains in August, stock ponds are drying up. Water that is presently available is of poor quality.
Ranchers are hauling water in some areas of the state to keep animals alive. Some dairy operations are on municipal water systems where water rationing is expected soon. Sheep and lamb inventory was down 11% Jan. 1 compared to last year. Goat numbers were down 4% on Jan. 1 from the same time last year.
Deer and other wildlife species are in poor condition due to the dry fall period. Poor conception rates and high winter mortality are expected. The drought is also jeopardizing spring planting. Spring planting normally begins in February in South Texas, and timely rains are critical to salvaging the 2000 crop.
While major losses have not occurred yet for crops, they could be in the near future. Extension economists say that if 2000 is somewhat similar to the 1996 Texas drought, crop losses could approach 20% less of normal production. If the dry weather continues as it did in the1998 drought, losses could approach 50% of normal production. These potential producer losses could mean losses of $637 million and $1.5 billion respectively.
"Not only are we looking at a potential production shortfall, but commodity prices are extremely bleak," said Dr. Roland Smith, Extension economist. "You put the low price situation in combination with low production, then we're going to need government assistance like we got in 1998 and 1999 to keep our farmers and ranchers going."
Smith said many farmers were counting on a profitable year in 1996, which would have helped ease the financial stress occurred to the 1998 drought.
"We've got a lot of situations where they should have had a really good year in 1996 when prices we're good, and if they had anything of normal production, they would have built up some cash reserve," Smith said.
"But they weren't able to capitalize on those prices like their neighbors in Oklahoma and Nebraska. Our Texas farmers and ranchers were in worse shape to withstand those kinds of losses that we've experienced in the last four years of this decade."