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Fiscal Notes

A Review of the Texas Economy from the Office of Susan Combs, Texas Comptroller of Public Accounts · Dec 2011

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The Long(est),
Hot(test) Summer

History-Making Drought Slams Texas

2011 is the worst single
drought year
in Texas history.

By Bruce Wright

If you live in Texas — and you ever go outside — you know that the summer of 2011 was particularly brutal, snapping records for high temperatures on a near-daily basis. And you know it’s been dry. Very dry, in fact.

In August, Texas State Climatologist John Nielsen-Gammon made it official, calling 2011 the worst single drought year in Texas history. And the dry spell has taken a multi-billion-dollar toll on the state economy.

The Drought’s Toll

In August, the Texas AgriLife Extension Service estimated Texas’ direct agricultural losses from the 2011 drought at

$5.2 
Billion.

Those losses include:

Livestock:
$2.06 billion

Hay production value:
$750 million

Cotton:
$1.8 billion

Corn:
$327 million

Wheat:
$243 million

Sorghum:
$63 million

… in addition to losses from fruit and vegetable producers, horticultural and nursery crops and other grain and row crops.

Source: Texas Agrilife Extension Service

Disaster for Agriculture

According to the Texas AgriLife Extension Service, much of the state actually entered the current drought in September 2010, in response to an “unusually strong” La Niña weather pattern in the eastern Pacific Ocean (see sidebar).

A dry winter gave way to a parched spring, with wildfires in April and May burning more than 3 million acres across Texas, destroying both crops and forage for cattle. (The fires returned in August, bringing the total to nearly 4 million acres at this writing.)

As spring became summer, the heat ratcheted up and the rain stayed away. And agricultural losses continued to mount.

In late June, the federal government recognized the entire state as a disaster area. By then, the winter wheat crop had been slashed in half, and it soon became apparent that other crops, including corn, sorghum and cotton, were being devastated as well.

“The heat is so strong, irrigation can’t even keep up,” says James Deatherage, general manager of the Producers Cooperative Association in Bryan. “Crop yields all over Texas are terrible.”

In the Texas High Plains, many cotton farmers simply left their crops to die in the field. The U.S. Department of Agriculture’s Farm Service reports that more than half of the region’s cotton crop is being written off in this way.

The Extension Service estimates the year’s losses at $1.8 billion for the Texas cotton crop, usually one of the world’s largest, as well as $327 million for corn, $243 million for wheat and $63 million for sorghum. One crop loss in particular, however, had immediate and far-reaching impacts: a $750 million loss of the year’s hay production.

”The heat is so strong,
irrigation can’t
even keep up.”

— James Deatherage,
general manager of the Producers
Cooperative Association
in Bryan

Cattlemen on the Brink

Ranchers have already used last year’s hay crop, and little will be produced this year, meaning much higher costs for those who are struggling to keep their herds alive.

“Producers are facing very high prices on feed and fuel,” Deatherage says. “We’re feeling staggering inflation in agricultural commodities.”

But water may be an even bigger problem, as many ponds and stock tanks have gone bone-dry.

“You can haul feed, but not water,” Deatherage says. “It’s just not feasible to haul water to pastures or to dig a well at pasture. You just don’t have many choices in these conditions.”

And as they’ve run out of options, many Texas ranchers have opted to cut their losses, with what Deatherage calls “the greatest selloff of cows ever.” So many Texas cattle went up for sale in summer 2011 that Texas brokers struggled to accommodate them all.

Jim Schwertner is owner of Capitol Land and Livestock, one of the nation’s largest livestock dealers. Schwertner says the volume of cattle passing through his sales has doubled. “It’s the most significant change I’ve seen in my lifetime,” he says. “When you start liquidating the market — the cattle, in this case — that’s serious, and that’s where we are now.”

In August, the AgriLife Extension Service estimated 2011 losses to Texas cattle ranchers at an astonishing $2.06 billion, bringing the service’s total estimate for direct agricultural losses due to the drought to $5.2 billion. And some think that number will climb further before year’s end.

Dry State Blues

Of course, the costs of the drought will greatly exceed direct losses to farmers and ranchers. The $5.2 billion estimate doesn’t include the impact to the cotton gins and elevators, fuel distributors, equipment dealers and others who serve the agricultural community. And it doesn’t begin to touch losses that go beyond agriculture.

Throughout the state, slumping water levels in lakes, rivers and streams have interfered with boating, swimming, tubing and fishing, hitting recreational businesses in what would normally be their high season.

The Texas Water Development Board reported that Lake Travis in the Hill Country was at 36 percent of its capacity in October. Lake Meredith, near Amarillo, is virtually empty; its last marina closed months ago. O.C. Fisher Reservoir in San Angelo State Park is almost gone, stagnant and red as blood from bacteria that thrive in oxygen-poor water.

Texas’ communities, too, are being forced to cope with increasingly restricted water supplies. According to the Texas Commission on Environmental Quality, more than 500 of Texas’ public water systems had invoked mandatory restrictions as of mid-August 2011. And the hot weather and shrinking, dried-out soil have caused a sharp increase in the number of broken water mains local governments have to fix.

When will it end?

Unfortunately, the outlook for next year is… iffy at best.

As of mid-October, the National Weather Service put the odds of La Niña conditions returning in 2012 at about even, although with less severity than this year’s.

In a recent blog post at the Houston Chronicle website, the state climatologist said that “it’s likely that much of Texas will still be in severe drought this time next summer, with water supply implications even worse than those we are now experiencing.”

State and local policy leaders, farmers and ranchers, experts on water policy, take note: Texans have proven their mettle in tough times before. We may be getting another chance now.

Texas has a detailed regional water planning process, overseen by the Texas Water Development Board. If the drought wears on, the process is likely to become more difficult — and more vital. It will also bring new urgency to the state’s need to maintain and expand its water infrastructure — the reservoirs, pipelines and water treatment facilities needed to serve a rapidly growing state.

What is La Niña?

A La Niña is a weather pattern prompted by unusually cool surface temperatures in the tropical Pacific Ocean. Its opposite is the El Niño, spurred by warmer waters. The cycle between the two phenomena, commonly called the El Niño/La Niña-Southern Oscillation, or ENSO, has major impacts on our weather.

La Niña periods typically mean warmer temperatures and dry conditions for the American Southwest, while bringing cooler temperatures and rain in northern states. La Niña events also have been associated with more active hurricane seasons.

It’s not just Texas that can suffer during a La Niña — the 2011 cycle brought torrential rain and extensive flooding to eastern Australia.

If the drought of 2011 focuses public attention on Texas’ long-term water needs, it may have done some good after all. FN

The Office of the Texas State Climatologist provides regularly updated information on the Texas drought and Texas weather patterns.

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