AUSTIN, Texas — As ponds evaporate, crops fail and the cost of hay and corn mounts, Texas ranchers enduring one of the worst droughts on record are selling off their cattle, a move likely to cause ripples across the globe.
According to the U.S. Department of Agriculture, the Lampasas auction house sold 1,654 cattle and calves last week, more than twice the amount it sold at that point last year.
The current drought is likely to be the costliest in a 12-month span, said David Anderson, a livestock economist with Texas A&M University's Agrilife Extension Service.
In May, Agrilife reported losses statewide at $1.2 billion. Anderson said an August report will probably tally the cost at three to four times that. The cost of the current drought may be even twice that of the previous most costly drought, which cost $4.1 billion in 2006.
Drought loss estimates are high this year in part because corn and other products are worth more this year. Strong global demand and tight supplies have helped push up prices for commodities.
Cotton supplies are low worldwide, and U.S. cattle numbers are the lowest since the 1950s. Ranchers and ethanol producers are competing for corn, driving up the price, 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 2½ times what they did five years ago, and wheat is worth more than 1½ times what it was in 2006.
Trouble with Texas' wheat production is just around the corner as well, Anderson warned. Farmers usually begin planting wheat at the end of summer, but the dry soil is making those prospects doubtful, he said.
As of last week, 75 percent of Texas was in exceptional drought, the most severe of five categories; almost 99 percent is in some form of drought. Meteorologists point to an especially intense La Nina pattern as the primary cause of record-low rain coupled with unseasonably high heat.