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Farmers face losses during record-breaking drought season


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The drought has spread over much of the southern U.S., leaving Oklahoma the driest it has been since the 1930s and setting records from Louisiana to New Mexico. But the situation is especially severe in Kansas and Texas, which trails only California in agricultural productivity.

Ranchers in parts of Kansas are hauling their spring cattle to auction barns because a drought and the brutal heat have made it difficult to provide the water and hay needed to keep the animals healthy, according to a state agency.

Some auction markets are seeing more than triple the number of cattle at weekly sales than they typically have at this time of year, the Kansas Agricultural Statistics Service said. For example, 14,500 head of cattle were taken to sale rings at Pratt, Salina and Dodge City last week. Last year, those auction markets sold just 4,300 head.

The sales are necessary because the hot, dry weather has dried up ponds and pastures, The Hutchinson News reported Wednesday. The statistics service said more than half of the range and pasture conditions are in poor or very poor condition.

Some areas of southwest Kansas haven’t received a good rain for more than a year. Large cattle-producing areas like Comanche County had just 1.49 inches at Coldwater from January through June, said Larry Ruthi, with the National Weather Service’s Dodge City office.

It also has been the driest July through July on record for Dodge City, with about 8 inches of rain falling during the period, Ruthi said.

And temperatures have reached past 100 degrees more than 30 days in a row for much of southern Kansas, with no significant rain forecast for the near future.

Cattle pens have been packed at Winter Livestock in Dodge City, said Brian Winter, who owns several Midwest sale barns. Last week, about 5,500 head sold at the Wednesday sale. In July 2010, market receipts for the month totaled 6,000.

"That’s pretty telling," Winter said. "Some of these guys wouldn’t sell until the fall, but it’s just been so dry they can’t maintain their herd."

The good news is that prices, for the most part, have stayed high, Winter said, because supplies haven’t rebuilt from the past decade’s droughts, demand for beef remains high and there’s a good export market.

But Mike Lewis, with Pratt Livestock, said calves weighing 600 pounds or less are bringing substantially lower prices.

Lewis, who has been at the sale barn since 1959, said he’s never seen numbers like this at this time of year. More than 5,500 cattle were sold at the market Thursday. A normal July sale usually brings just 1,000 head, he said.

"We’ll be larger yet next week," he said. "The numbers have increased weekly due to the lack of rain. If it doesn’t rain, the exodus of cows and light calves will increase at a rapid pace. There is just no feed being raised in this country."

The lack of hay means prices for the feed have doubled in the past year. Farmers are selling wheat straw for $70 a ton, The News reported. Alfalfa traded for a high of $180 a ton in June, according to the U.S. Department of Agriculture. The agency also reports 2011 could have the lowest U.S. hay acreage on record.

The Kansas Livestock Association is fielding calls from ranchers as far away as Texas who need grass.

"It’s not hundreds of cows, it’s thousands of cows," said Matt Teagarden, the organization’s industry relations director said.

Waiting for his cattle to sell Thursday, Gary Sterneker, a Cunningham-area rancher, said he’s running out of hay, with only a 30% yield this year. His ponds are also empty and he’s been using track hoes to dig deeper for water.

He brought 60 calves to sale last week, three months earlier than schedule, and he might bring more if rain doesn’t come soon.

"Everyone is in the same situation," Sterneker said. "We’ll just be playing it by ear. Without rain in a couple weeks, we’ll have to do something different.

Moreover, he added, "We don’t need an inch of rain. We need lots of inches of rain."

In Texas, Randy McGee faces a similar problem. He spent $28,000 in one month pumping water onto about 500 acres in West Texas before he decided to give up irrigating 75 acres of corn and focus on other crops that stood a better chance in the drought.

He thought rain might come and save those 75 acres, but it didn’t and days of triple-digit heat sucked the remaining moisture from the soil.

McGee is still watering another variety of corn, cotton and sorghum but the loss of nearly one-sixth of his acres after spending so much on irrigation weighs on him.

"Kind of depressing," the 34-year-old farmer said. "You use that much of a resource and nothing to show for it. This year, no matter what you do, it’s not quite enough."

About 70% of Texas rangeland and pastures are classified as in very poor condition, which means there has been complete or near complete crop failure or there’s no food for grazing livestock. The crop and livestock losses could be the worst the state has seen — perhaps twice the previous single-year record of $4.1 billion set in 2006, said David Anderson, an economist with Texas AgriLife Extension Service.

Part of the reason for the high dollar figure is that while farmers have lost a lot, the corn and other products they are losing are worth more this year. Strong global demand and tight supplies have helped push up prices for commodities like corn, cotton, wheat and beef.

Cotton supplies are low worldwide, and U.S. cattle numbers are the lowest since the 1950s. Livestock farmers 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 two-and-a-half times what they did five years ago, and the price of wheat is more than one-and-a-half times what it was in 2006.

"This was a year farmers might have done well," Anderson said.

Consumers will eventually see the cost of the drought passed on to them, although it’s hard to say by how much since processing, marketing, transportation and other costs also play a big role in retail prices, he said.

Texas’ economy will take a more direct hit. Agriculture accounted for $99.1 billion of Texas’ $1.1 trillion economy, or 8.6%, in 2007, the most recent year data on food and fiber was available from the extension service. Losses in that sector have a ripple effect that’s about twice the amount of the actual agricultural loss.

"That’s a fairly substantial portion of the Texas economy that’s going through this hardship," Anderson said.

And, it’s a hardship that’s following close on the heels of others. Texas suffered droughts in 2005-06 and 2008-09, although those were mostly regional. This year’s is broader and more intense. The state is coming off its driest nine-month period ever and its hottest June on record. More than 90% of the state is in the two most severe drought stages.

Thousands of acres of crops have failed in areas where farmers rely on rain, while those grown with irrigation continue to struggle. Already, more than 2 million acres of cotton that’s not irrigated has been lost, adding about $1.1 billion to an initial $1.5 billion loss agriculture officials announced in mid-May. That included livestock and wheat, corn and sorghum crop losses from November through May 1.

"It’s ugly right now," said cotton farmer Rickey Bearden, who hasn’t had a good rain since October on his 9,000 acres on the South Plains, the world’s largest contiguous growing patch. "This one, we were all hopeful of a really good price and a good crop. It just doesn’t seem like this is going to be the year for it."

Some ranchers have begun culling their herds because the cattle have nowhere to graze and prices are high for supplemental feed and hay. They’re sending more animals to auction and selling calves earlier. Old cows are being sold, and in some cases, ranchers are getting rid of animals normally considered vital to future production — heifers and 3-year-old to 6-year-old cows.

"It’s heartbreaking," said Debbie Davis, a rancher northwest of San Antonio. "Anyone that needs a little extra care, they’ve got to go."

The situation isn’t likely to improve soon: forecasters predict Texas’ drought will persist through September.

Davis has been having alfalfa trucked in from Nebraska to feed her cattle at a cost of $240 per ton — $60 of that for transportation. She said she loves ranching, but times like these give her pause: "It makes me want to buy land somewhere else."

http://www.usatoday.com/money/industries/food/2011-07-30-kansas-texas-south-drought_n.htm

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