Texas in Focus: High Plains

High Plains: Home

Introduction

Economic Development

Demographics

Infrastructure

Health Care

Education

Conclusion

Appendix

Industry Profile – Agriculture

Economic regions often are supported by industries for which they have a competitive advantage, due to an abundance of a particular resource, certain climate conditions or special labor skills. Today, as it has been for decades, much of the High Plains economy is driven by agriculture.

Cattle, cotton and grain crops dominate the region’s agriculture and account for a significant share of the state’s total production. Crop and animal production provided more than 28,000 jobs in the region in 2006.¹⁵ Farmland in the High Plains accounted for 17.5 percent of all Texas farmland in 2002. Deaf Smith and Oldham counties have the most acreage, with 964,347 and 936,390 acres respectively.

Cattle

Texas is the national leader in cattle, ranking first among states in a number of measures. Texas has more than twice as many head of cattle and calves (14 million) than Nebraska (6.7 million), the second ranked state. Likewise, Texas leads the nation in the number of cattle operations with 149,000, followed by Missouri in a distant second with 64,000. Finally, Texas ranks first in the total value of all cattle and calves with more than $11 billion at the beginning of 2007, far outpacing second place California with $6.3 billion.¹⁶

The High Plains, in turn, is the state’s leading cattle region, with nearly a third (30.1 percent) of all cattle in the state or more than 4.2 million head in 2007.¹⁷ If the High Plains were a state, it would have had the seventh-largest population of cattle in the U.S. in 2007 (Exhibit 8).¹⁸

In fact, the eight largest cattle counties in the state are found in the High Plains region. Deaf Smith County has the largest number of cattle and calves with 552,000 or 3.9 percent of the state’s total head.¹⁹

Texas ranchers have seen the price paid for beef increase since 2002. The average price per pound paid for beef cattle in 2002 was $0.67. By 2006, the average price increased 31.3 percent to $0.88.²⁰

Cotton

In 2000, cotton was the state’s leading cash crop, generating $1.6 billion for farmers and a $5.2 billion impact on the economy. Texas is the nation’s largest producer of cotton, and the High Plains produces the majority of the state’s cotton.²¹

The region’s farmers produced more than 3.5 million bales of upland cotton in 2006, or about 61.7 percent of the state total. The region also had more than half (57.6 percent) of the state’s harvested acres of cotton, or nearly 2.4 million acres. Hale and Lamb counties were the region’s largest cotton producers (Exhibit 9).²²

Wheat

Nearly half of all Texas wheat harvested in 2006 (47.8 percent, or more than 16 million bushels) came from the High Plains. The region had 46.2 percent of all Texas harvested acres of wheat in that year. Dallam and Castro counties each produced nearly 2 million bushels of wheat, accounting for a quarter (24.8 percent) of the region’s wheat crop (Exhibit 10).²³

Corn for Grain

The High Plains region is also the state’s largest producer of corn for grain. The region produced 107.4 million bushels, or 61.2 percent of the state’s share in 2006. The region’s 562,000 acres harvested accounted for 38.8 percent of the state total. Dallam and Hartley counties alone produced nearly a quarter (24.4 percent) of the state’s corn for grain (Exhibit 11).²⁴

Sorghum for Grain

High Plains farmers harvested more than 18.7 million bushels of sorghum for grain in 2006, 30.0 percent of the state total. Ochiltree County was the region’s largest producer, with nearly 2 million bushels, followed by Deaf Smith County (Exhibit 12). In all, nearly 400,000 acres of sorghum were harvested in the region in 2006.²⁵

Biofuels

The emergence of biofuels such as ethanol and biodiesel is opening new markets to the region’s farmers and ranchers. Its rich resources of corn, sorghum and animal fat make the region a natural area for these emerging energy industries. Exhibit 13 highlights ethanol and biodiesel plants in the High Plains.

Exhibit 13

Ethanol and Biodiesel plants in the High Plains Region

(Ethanol and Biodiesel Plants by County, Text Alternative)

The 2007 federal energy bill set a goal that the U.S. will annually produce 15.2 billion gallons of renewable fuels, including ethanol and biodiesel, by 2012, and 36 billion gallons by 2022.²⁶ Also, the federal government provides subsidies for ethanol and biodiesel production and consumption.

Ethanol (ethyl or grain alcohol) is a renewable fuel used to power vehicles and is made from feedstock crops such as corn, sugarcane and other materials that can be converted into sugar. Almost all of U.S. ethanol is made from corn.²⁷ One bushel of corn (56 pounds) can produce up to 2.8 gallons of ethanol.²⁸

Many proponents are touting ethanol as a step toward national energy independence that also benefits the nation’s farmers and creates jobs. According to one recent estimate, a Texas ethanol plant producing 100 million gallons per year could create about 1,600 new jobs.²⁹

U.S. ethanol production has increased dramatically over the past several years (Exhibit 14).

Ethanol has critics as well as boosters. Some argue that increased corn production for ethanol is pushing up the price of foods, animal feed and other commodities while draining precious water resources. The amount of water corn-based ethanol requires, mostly for crop irrigation, varies depending on climate, from 2,500 to 29,000 gallons of water per million Btu of energy produced. In 2002, water use at ethanol plants averaged 4.7 gallons per gallon of ethanol produced.³⁰

The High Plains region is the center for this new industry in Texas. Every ethanol plant either opened or under construction in Texas is located in the High Plains region, with the first large-scale plant opening in Hereford, Texas, in January 2008.

Exhibit 14

U.S. Ethanol Production, 1980-2007

(U.S. Ethanol Production, Text Alternative)

White Energy, Inc.’s Hereford ethanol plant is expected to produce 100 million gallons of ethanol annually from corn and milo. Much of this grain will come from local farmers. The byproducts of ethanol production will be used as cattle feed, partially offsetting the loss of corn feed. The plant’s owners estimate that the facility will provide about 40 jobs and have an economic impact of about $100 million annually.³¹

White Energy also has a plant under construction in Plainview that the company says will produce similar amounts of ethanol and create a similar number of jobs. The plant also will provide hundreds of construction jobs.³²

Panda Ethanol, Inc., is building an ethanol plant in Hereford and planning another for Sherman County. Each plant will produce about 115 million gallons of ethanol per year from about 40 million bushels of corn. Interestingly, Panda will gasify up to one billion pounds of cow manure annually instead of using natural gas to operate each plant. Gasifying or burning manure is a way to avoid the monetary and environmental costs of its disposal. Producers usually are not paid for manure used as fuel; for example, cattle producers are planning to supply the manure to the Hereford ethanol plant for free to avoid disposal costs. Using cattle manure to produce ethanol, which in turn produces a byproduct that can be used as cattle feed, creates a unique fuel cycle.

The Hereford plant under construction is expected to employ 61, the planned Sherman plant should also create 61 jobs.³³ Panda also has plans to build a plant in Muleshoe.

Biodiesel is another alternative fuel, used either as a blend with petroleum-based diesel or as a full substitute. The most common sources of biodiesel are plants (soybeans, peanuts, palm, sorghum and others), animal fats and recycled grease from cooking oils.

Texas is the country’s largest producer of biodiesel. Of 148 commercial biodiesel production plants operating in the U.S. in August 2007, 15 were in Texas, more than in any other state.³⁴ The state produced 72.9 million gallons in 2007.³⁵

In 2008, Tyson Foods and ConocoPhillips are partnering to produce biodiesel from beef fat. Tyson ships tallow from its Amarillo plant to a biodiesel facility in Borger. This facility is part of a strategic alliance between the two companies that is expected to produce 175 million gallons per year nationwide.³⁶

Also using animal fat to produce biodiesel is Greenlight Biofuels, located in Littlefield in Lamb County. The Greenlight facility, opened in summer 2007, employs five people and can produce 5 million gallons of biodiesel per year. The plant also produces glycerin as a co-product.³⁷

Brownfield Biodiesel in Ralls in Crosby County can produce 6.5 million gallons of biodiesel annually from feedstocks including canola, soybean and cottonseed. The facility also produces glycerin as a co-product that it sells to soap companies. The biodiesel itself is sold to wholesale buyers, mostly in Texas.³⁸

These plants will boost the High Plains economy by providing new markets for its traditional industries. Local communities and business owners already have benefited from the construction of these plants.

• ¹ Hilmar Cheese Company, “Who We Are,” http://www.hilmarcheese.com/aboutus.cms. (Last visited February 15, 2008.)
• ² Kevin Welch, “Plant Ready for the Big Cheese,” Amarillo.com (June 24, 2007), http://www.amarillo.com/stories/062407/bus_7761908.shtml. (Last visited March 5, 2008.)
• ³ Amarillo Economic Development Corporation, “New Incentives–Pacific Cheese,” http://www.amarilloedc.com/index.php?id=503. (Last visited February 15, 2008.)
• ⁴ Jim McBride, “Pacific Cheese Doubles Size of Amarillo Plant Project,” Amarillo Globe-News (January 6, 2008).
• ⁵ Texas Comptroller of Public Accounts, Texas Community Reinvestment 2007 Update (Austin, Texas, October 2007), pp. 27-28, http://www.window.state.tx.us/comptrol/cra07/96-643.pdf. (Last visited March 6, 2008.)
• ⁶ Amarillo Economic Development Corporation, “The Bell Helicopter Story,” http://www.amarilloedc.com/index.php?id=126 (last visited September 24, 2007); and Frank Colucci, “Local Investment in Osprey Pays Off by Creating Jobs,” National Defense (March 2004), http://www.nationaldefensemagazine.org/issues/2004/Mar/Local_Investment.htm. (Last visited March 5, 2008.)
• ⁷ John Morthland, “O, Canadian!” Texas Monthly (September 2004).
• ⁸ Abraham Trading Co., “About,” http://www.abrahamtrading.com/about2.htm. (Last visited March 3, 2008.)
• ⁹ South Plains Mall, “Property Description,” http://www.southplainsmall.com/leasing.asp. (Last visited September 21, 2007.)
• ¹⁰ Jones Lang LaSalle, Westgate Mall, “Statistics and Demographics,” Plano, Texas, March 6, 2007. (Fact sheet.)
• ¹¹ U.S. Department of Agriculture, “Texas Cattle Inventory and Milk Production by County,” http://www.nass.usda.gov/Statistics_by_State/Texas/Publications/County_Estimates/cecatt1.htm. (Last visited March 3, 2008.)
• ¹² Interview with Bob Josserand, mayor of Hereford, Texas, February 28, 2008.
• ¹³ Interview with Bob Josserand, mayor of Hereford, Texas, February 28, 2008.
• ¹⁴ Scott Norris, “New Ethanol Plants Fueled by Cow Manure,” National Geographic (Washington, D.C. August 18, 2006); Panhandle Regional Planning Commission, 2006 Annual Report (Amarillo, Texas, May 2007), http://www.prpc.cog.tx.us/2006_annual_report.pdf; and Panda Ethanol, “Breaking Ground on 115 Million Gallon Ethanol Plant in Hereford,” http://www.pandaethanol.com/facilities/hereford/index.html. (Last visited September 15, 2007.)
• ¹⁵ Data provided by EMSI. EMSI is an analysis platform for economic research.
• ¹⁶ U.S. Department of Agriculture and the Texas Department of Agriculture, 2006 Texas Agricultural Statistics (Austin, Texas, October 2007), p. 25.
• ¹⁷ U.S. Department of Agriculture, National Agricultural Statistics Service, “Quick Stats–U.S. and All States County Data,” http://www.nass.usda.gov/QuickStats/Create_County_All.jsp. (Last visited March 5, 2008.) A custom query was created.
• ¹⁸ U.S. Department of Agriculture, National Agricultural Statistics Service, “Quick Stats–U.S. and All States County Data”; and U.S. Department of Agriculture, National Agricultural Statistics Service, 2006 Texas Annual Statistics Bulletin (Washington, D.C., October 2007), pp. 25-27, http://www.nass.usda.gov/Statistics_by_State/Texas/Publications/Annual_Statistical_Bulletin/bull2006.pdf. (Last visited March 5, 2008.)
• ¹⁹ U.S. Department of Agriculture and the Texas Department of Agriculture, 2006 Texas Agricultural Statistics (Austin, Texas, October 2007), p. 31.
• ²⁰ U.S. Department of Agriculture and the Texas Department of Agriculture, 2006 Texas Agricultural Statistics (Austin, Texas, October 2007), p. 13.
• ²¹ The Texas A&M University System, The Agriculture Program, “Cotton in Texas,” http://aggie-horticulture.tamu.edu/extension/cropbriefs/cotton.html. (Last visited March 6, 2008.)
• ²² U.S. Department of Agriculture, National Agricultural Statistics Service, “Quick Stats–U.S. and All States County Data.”
• ²³ U.S. Department of Agriculture, National Agricultural Statistics Service, “Quick Stats–U.S. and All States County Data.”
• ²⁴ U.S. Department of Agriculture, National Agricultural Statistics Service, “Quick Stats–U.S. and All States County Data.”
• ²⁵ U.S. Department of Agriculture, National Agricultural Statistics Service, “Quick Stats–U.S. and All States County Data.”
• ²⁶ Energy Independence and Security Act of 2007, U.S. H.R. 6, 110th Congress (2007.)
• ²⁷ Texas State Energy Conservation Office, “Energy Crops for Fuel,” http://www.seco.cpa.state.tx.us/re_biomass-crops.htm. (Last visited January 16, 2008.)
• ²⁸ U.S. Department of Agriculture, An Analysis of the Effects of an Expansion in Biofuel Demand on U.S. Agriculture (Washington, D.C., May 2007), p. 3, available in Word format at http://www.usda.gov/oce/newsroom/chamblissethanol5-8-07.doc. (Last visited November 19, 2007.)
• ²⁹ Renewable Fuels Association, Contribution of the Ethanol Industry to the Economy of the United States, by John M. Urbanchuck (Washington, D.C., February, 21, 2006), p. 9, http://www.ethanolrfa.org/objects/documents/576/economic_contribution_2006.pdf. (Last visited January 16, 2008.)
• ³⁰ U.S. Department of Energy, Energy Demands on Water Resources (Washington, D.C., December 2006), pp. 61-62, http://www.netl.doe.gov/technologies/coalpower/ewr/pubs/DOE%20energy-water%20nexus%20Report%20to%20Congress%201206.pdf. (Last visited February 14, 2008.)
• ³¹ White Energy, “Deep in the Heart of Texas,” http://www.white-energy.com/hereford.aspx. (Last visited February 13, 2008.)
• ³² White Energy, “Our Hereford Plant’s Next Door Twin,” http://www.white-energy.com/plainview.aspx. (Last visited February 13, 2008.)
• ³³ Panda Ethanol, “Breaking Ground on 115 Million Gallon Ethanol Plant in Hereford,” http://www.pandaethanol.com/facilities/hereford/index.html (last visited February 13, 2008); and Panda Ethanol, “Sherman County Selected to Host Panda’s Second Texas Ethanol Plant,” http://www.pandaethanol.com/facilities/sherman/index.html. (Last visited February 13, 2008.)
• ³⁴ Texas State Energy Conservation Office, “Biodiesel Fuel,” http://www.seco.cpa.state.tx.us/re_biodiesel.htm. (Last visited February 14, 2008.)
• ³⁵ Interview with Allen Regehr, financial analyst, Young Farmer Loan Program and Biofuels Incentive Program, Texas Department of Agriculture, Austin, Texas, February 25, 2008. (Note: Data was for state fiscal 2007).
• ³⁶ ConocoPhillips, “ConocoPhillips and Tyson Foods Announce Strategic Alliance To Produce Next Generation Renewable Diesel Fuel” April 16, 2007, http://www.conocophillips.com/newsroom/news_releases/2007news/04-16-2007.htm. (Last visited February 14, 2008.)
• ³⁷ Interview with Mitchell Elliott, Greenlight Biofuels, Ltd., Lubbock, Texas, February 13, 2008.
• ³⁸ Interview with Jeff Dunn, owner, Brownfield Biodiesel, LLC, Ralls, Texas, February 13, 2008.