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Drouth Frustrating Otherwise
Positive Economic Conditions
By Jose G. Peña
Extension Economist
While livestock and grain markets have improved significantly and the outlook appears good, the continuing drouth and high energy costs indicate that 2006 will be a difficult year for agriculture.
USDA's initial forecast of net farm income for 2006 at $56.2 billion is down $16.4 billion (22.6 percent) from $72.6 billion in net income in 2005, but slightly above the 10-year average of $55.7 billion.
Both farmers and ranchers face major crop failures this year as a result of the continuing drouth. For example, while wheat and cattle prices reached two to three-year highs, the wheat harvest in South Central Texas was down about 80 percent from last year and ranchers had to liquidate a large portion of their herds due to the drouth. Crop agriculture is experiencing increased irrigation requirements at a critical time of record high energy costs.
Light to heavy thunderstorms deposited from one-half to more than six inches of much-needed rainfall recently in a narrow belt through the hill country to the upper coast of Texas, but most of the state, especially the south and southwest regions, remains dry. May ended with rainfall in a large portion of Southwest Texas down 60 percent from the longterm average.
The Southwest Texas region, which probably mirrors the moisture situation in more than half of the state, has only received about 2.8 inches of scattered rainfall in 229 days, since the last economically significant rainfall of over one inch on October 13, 2005. This 229-day period will go down in history as the driest on record. Unseasonably hot temperatures are aggravating the dry spell.
The drouth really started in June of last year, when cumulative rainfall dropped to 73 percent of the longterm average. Weathermen define a true drouth as a period when 75 percent or less of the longterm average yearly rainfall has been received. And, weather forecasts indicate that the drouth will persist in the south central portion of the U.S. through the summer.
The current drouth has entered into a "severe" classification. Agricultural producers should prepare in-depth financial plans which cover short and longterm goals and objectives and take into account the effects of a potential continuing drouth over the next few years.
In terms of forage production for livestock, historically about 70 percent of the annual forage production occurs in the spring. With spring almost behind us, sufficient forage will not be produced this year to sustain even a minimal level of livestock. Current conditions may extend through next spring. Hay is scarce and expensive. Adequate levels of supplemental feeding to sustain livestock through the hot, dry, summer dormant season will be expensive. If livestock remain, stock densities should be reduced to match forage availability. In the case of expensive breeding stock, ranchers may want to consider moving the livestock to leased pastures with adequate forage or to feedlots to be maintained.
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Drouth Frustrating Otherwise
Positive Economic Conditions
By Jose G. Peña
Extension Economist
While livestock and grain markets have improved significantly and the outlook appears good, the continuing drouth and high energy costs indicate that 2006 will be a difficult year for agriculture.
USDA's initial forecast of net farm income for 2006 at $56.2 billion is down $16.4 billion (22.6 percent) from $72.6 billion in net income in 2005, but slightly above the 10-year average of $55.7 billion.
Both farmers and ranchers face major crop failures this year as a result of the continuing drouth. For example, while wheat and cattle prices reached two to three-year highs, the wheat harvest in South Central Texas was down about 80 percent from last year and ranchers had to liquidate a large portion of their herds due to the drouth. Crop agriculture is experiencing increased irrigation requirements at a critical time of record high energy costs.
Light to heavy thunderstorms deposited from one-half to more than six inches of much-needed rainfall recently in a narrow belt through the hill country to the upper coast of Texas, but most of the state, especially the south and southwest regions, remains dry. May ended with rainfall in a large portion of Southwest Texas down 60 percent from the longterm average.
The Southwest Texas region, which probably mirrors the moisture situation in more than half of the state, has only received about 2.8 inches of scattered rainfall in 229 days, since the last economically significant rainfall of over one inch on October 13, 2005. This 229-day period will go down in history as the driest on record. Unseasonably hot temperatures are aggravating the dry spell.
The drouth really started in June of last year, when cumulative rainfall dropped to 73 percent of the longterm average. Weathermen define a true drouth as a period when 75 percent or less of the longterm average yearly rainfall has been received. And, weather forecasts indicate that the drouth will persist in the south central portion of the U.S. through the summer.
The current drouth has entered into a "severe" classification. Agricultural producers should prepare in-depth financial plans which cover short and longterm goals and objectives and take into account the effects of a potential continuing drouth over the next few years.
In terms of forage production for livestock, historically about 70 percent of the annual forage production occurs in the spring. With spring almost behind us, sufficient forage will not be produced this year to sustain even a minimal level of livestock. Current conditions may extend through next spring. Hay is scarce and expensive. Adequate levels of supplemental feeding to sustain livestock through the hot, dry, summer dormant season will be expensive. If livestock remain, stock densities should be reduced to match forage availability. In the case of expensive breeding stock, ranchers may want to consider moving the livestock to leased pastures with adequate forage or to feedlots to be maintained.
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I always have said that I would rather go through a drought in a place that was not used to getting as much rainfall, because those areas seem to plan and deal with it more. But if you get no rain for years, not much you can plan for.
