Texas copes with drought

Jim Selman normally runs about 300 head of cattle on his ranch near Gonzales, Texas. But in the past month, with continued warm temperatures and no rainfall, he's sold 175 for slaughter and is down to three bales of hay to feed the remaining cows.

"If it stays much drier, the rest of them will be gone as well," says the lifelong rancher. "It's a pretty tough situation" - and starting to rival the drought of the 1950s, he adds, when he had to sell his entire herd and leave the business.

Forecasters are equally pessimistic. After seeing rainfall decline by 20 inches last year, making 2005 the 12th driest year on record in Texas, they say this year is shaping up to be the driest since 1956. The result has been raging wildfires, skyrocketing hay costs, and billions of dollars in agricultural losses.

For the moment, consumers are insulated from the impact because Texas cattlemen are sending more cows to the market in an effort to reduce their herds. But in two to three years, economists warn, a nosedive in cattle numbers in the nation's largest cattle-producing state would be likely to cause the opposite effect: higher beef prices.

"Drought is a slow-motion disaster," said Texas Farm Bureau President Kenneth Dierschke at a recent drought summit in San Antonio.

Now, ranchers are pushing for government help.

Last month, after wildfires ravaged more than 455,000 acres across Texas, Gov. Rick Perry declared a drought disaster in all 254 of the state's counties. In those counties that are approved by the US Department of Agriculture, qualified farmers and ranchers will be eligible for low-interest emergency loans from the USDA.

But the Texas cattle industry is also pressing President Bush to allow ranchers to take advantage of a federal program, called the Livestock Indemnity Program, which provides partial reimbursements for livestock losses due to a natural disaster.

"We don't need to borrow more money," says Bill Hyman, executive director of the Independent Cattlemen's Association of Texas. "Don't get me wrong, any help is better than no help. But if we wait 90 days, there won't be anybody left to help."

The cattle industry is in a particularly difficult position right now because ranchers typically prairie graze their cows all winter. But because rain has been so scarce, there has been little for the animals to eat, and ranchers have turned to expensive hay feeding.

Hay is being trucked in from states such as Kansas and Nebraska - and prices have almost doubled due to demand - because Texas produced so little hay last year. Only half of the 2005 crop was harvested.

Because the price of diesel fuel has also skyrocketed, Mr. Hyman says it now costs him almost $2 a day to deliver hay and feed each cow - nearly triple the cost last year. While he has simply culled his herd, one rancher showed up at the local auction last week and sold his entire herd of 41 cows.

"His ponds had just run out of water," says Hyman. At that same auction, an out-of-state truck pulled up with a trailer of hay and started auctioning it off to the highest bidder.

The next month is critical in Texas because it marks the beginning of spring planting. Already, the Texas Department of Agriculture estimates that drought cost the state $1.5 billion last year. Experts worry that is only the beginning.

"We are just now getting into the planting time for spring crops, and we don't have good ground soil moisture," says Mark Waller, a grain-marketing expert at Texas A&M University in College Station. "That current $1.5 billion loss could get a whole lot bigger in a short period of time."

He calls the current soil conditions poor to very poor, and says a large part of the state's moisture usually comes during the winter months - something that did not occur this year.

The Texas drought began in the Rio Grande Valley almost a decade ago and has since spread to the rest of the state. While some years have been wetter than others, this year left experts worrying that the worst is yet to come.

In fact, parts of the western United States have been suffering from drought for the past five to seven years, says Donald Wilhite, director of the National Drought Mitigation Center at the University of Nebraska at Lincoln.

Dr. Wilhite blames the current problems, in part, on the position of the jet stream and a developing La Niña in the Pacific Ocean, which usually results in drought in the south-central United States.

One bright spot is that cattle prices have remained high, despite more cows being sent to slaughter, says Dr. Waller. But if ranchers don't restock their herds, there may be fewer cows in the future - and higher prices.

For consumers, "the impact will be felt in the supply of calves coming to market two or three years from now," he adds.