JACKSONVILLE — The impact of the current drought on the state’s agriculture industry has been devastating already and is likely to worsen if the drought continues through next year as some experts predict.

“It does look like the drought of 2011 will be the costliest drought in Texas history,” said Mark Welch, Extension economist for grain marketing with the Texas Agrilife Extension Service. “It’s a three, four, five billion dollar impact right now, just in Texas. This is a big deal.”

The state’s five main field crops: wheat, corn, hay, sorghum and cotton have been devastated. The wheat yield was half that of a normal year. That means half the income for wheat farmers, and half the amount of wheat available for ranchers to feed their livestock.

There’s a global impact as well. Texas exports most of its wheat crop for world trade.

“We’ve seen relatively high wheat prices in recent years, and those prices will go up with the shortage on a global scale if other wheat producing nations can’t make up the deficiencies of the U.S.,” Welch said.

The full extent of damage to the state’s corn crop won’t be known for another month, but the impact of a much lower yield is already being felt.

Deer hunters who bought a 50 pound sack of deer corn last year, paid on average $5 per bag. Currently the price is more than double. It’s expected to cost even more before deer season begins in November.

The impact for cattle feed lots is even greater. They are shipping corn in from other states just to stay in business.

“They pay a premium when they ship corn in,” Welch explained. “Generally that premium is 40 cents per bushel over the going price. This year they’re paying $1.40, so the premium is higher than we’ve seen in 15 years. The economic impact of that is significant.”

The Texas hay crop is faring even worse.    

“We haven’t been able to add to the hay supplies in any meaningful way at all,” Welch said. “We’ve already used up last year’s hay crop. Another 30-60 days of no rain means no hay made this summer. And bringing hay in from other parts of the country is extremely expensive. The hay situation is severe and apt to get much worse.”

Many Texas ranchers have been supplementing or fully feeding their livestock since last August. Normally that occurs only in the winter months.

“Drought is the top issue among beef cattle producers in Texas right now,” said Dr. Jason Cleere, AgriLife Extension beef cattle specialist.

Many ranchers are selling their herds because they can’t afford to feed them. Currently, the U.S. is down nearly one million head of cattle.

“It looks like the prospects for those producers who are managing to hang on will be more dismal with each passing day that we don’t get rain and there’s no forage in the fields,” Welch said. “They’re selling (their herds) to cut their losses, despite the fact that beef prices are very, very good for the producer. This is the time you want to get into the business, not out of it, which makes it doubly hard to make that decision to sell the herd.”

Even if rebuilding of the nation’s cattle herds were to begin today, it would be several years before inventory would reach a significant number.

“Even in best-case scenario, we will not see additional beef on the table until 2015,” said Brett Stuart, an economist with CattleFax. He added that global meat production will need to double by 2050 to meet growing demand.

“If someone would have told me we would have record high beef prices in the middle of a recession and high unemployment rate, I would have never believed it,” he said.

In other words, this is good news for ranchers but its bad news for the consumer who’s facing higher meat prices at the grocery store.

Most of Texas’ sorghum crop is exported to Mexico, with the rest being used for chicken feed.

“It’s a little more drought tolerant, but it looks like the corn right now,” Welch said. “Production will be down tremendously in Texas with no rain.”

Cotton, the last of the big five field crops is the most drought-tolerant. The bulk of the crop is produced in the Midland-Odessa area and it’s a bust this year.

“We’re seeing the highest abandonment rates in history for this year’s cotton crop,” Welch said. There is virtually no dry land cotton west of I-35.”

Texas is the largest exporter of cotton, mostly to the Asian markets.

Add to that the indications that another La Nina weather pattern is forming in the Pacific Ocean, which could mean another dry fall, winter and spring, and the impact worsens exponentially.

“One of the big challenges we’re going to be facing in Texas is stressed water resources. We’re so much more urbanized now than we were in the 1950s. Farmers will lose that fight for water with the cities. Another drought year on top of this means the conditions will be even more severe.”    

And then there’s the ripple effect.

“When it’s dry like this, farmers aren’t spending money on seed, fertilizers, fuel, equipment and other necessities for producing a crop,” Welch said. “That then begins to affect the banks, equipment and car dealers, and will eventually work its way through the entire community. Ultimately, it affects jobs for everyone.”

“It’s going to affect land values, tax revenues, even retiree pension plans.”