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Catastrophic $5.3 Billion Texas Drought Hits Global Cotton, Beef, Peanut Butter and Even Pumpkin Market

By Stephen Lacey on October 31, 2011 at 5:50 pm

"Catastrophic $5.3 Billion Texas Drought Hits Global Cotton, Beef, Peanut Butter and Even Pumpkin Market"

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In August, agronomists showed that the historic drought in Texas had caused a stunning $5.3 billion in losses in the agricultural sector. Two months later, even with some rain finally coming to the state, Texas farmers are being crippled by a drought that could stretch beyond next summer.

As the economic losses pile up, they are having an impact on global commodities like cotton and beef — stretching this crisis well beyond the state of Texas, and showing just how “global” the problem of global warming truly is. Kate Galbraith reported on the “catastrophic drought” for the New York Times:

Some of the farthest-reaching effects may be on world cotton markets. Texas produces about 50 percent of U.S. cotton, and the United States in turn grows between 18 and 25 percent of the world’s cotton, according to Darren Hudson, director of the Cotton Economics Research Institute at Texas Tech University. This year, however, yields even from irrigated crops have fallen about 60 percent on the high plains where the bulk of Texas’s cotton crop grows, Mr. Hudson said. Farmers have given up on their “dry-land,” or unirrigated, cotton crops.

And it’s not just cotton. A terrible peanut crop will soon result in significantly higher costs for peanut-butter products; pumpkin prices have also spiked due to a shortage from Texas; and beef prices are likely to rise due to the crisis:

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Many Texas ranchers are selling off large parts of their herds as the grass dries out and water becomes scarce. Some are buying hay from farms a thousand miles away, despite the high cost of shipping.

The sell-off of cattle because of the Southwestern drought could push already-high beef prices higher during the coming years, according to Kevin Good, a senior market analyst at CattleFax, a company that does market analysis for the cattle industry. That is because many cattle are headed to the slaughterhouses now, reducing future supply.

Since the record-setting drought began, the Texas Agrilife Extension Service reports that the livestock industry in Texas has seen more than $2 billion in losses, and the cotton industry has seen $1.8 billion in losses. Climate change will only make such drastic economic losses worse, sending larger ripples through the global economy.

Meanwhile, Texas Governor and presidential candidate Rick Perry continues to call efforts to lower climate-change inducing greenhouse gasses “job killers.”

If Rick Perry has his way and prevents the U.S. from doing anything about addressing climate change, crippling droughts will become the norm and he’ll be the biggest job killer of all — see Nature Publishes My Piece on Dust-Bowlification and the Grave Threat It Poses to Food Security

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20 Responses to Catastrophic $5.3 Billion Texas Drought Hits Global Cotton, Beef, Peanut Butter and Even Pumpkin Market

  1. Douglas says:

    It doesn’t get as much attention, but the drought in Georgia and portions of other SE states is pretty bad too. Especially since it’s right on the heals of the record drought of 2007-2009.
    http://www.ajc.com/news/lake-lanier-drops-to-1208692.html?cxtype=rss_news

    What I find surprising is that an area so close to both the GOM and the Atlantic could have such a persistent drought. A sign of things to come I guess.

  2. rjs says:

    texas is hardly a pumpkin state; the top five are Illinois, Ohio, California and New York, & Pennsylvania (in that order).

    the pumpkin shortage was caused by Ilene’s hits to NY & NJ crops…

    • Mulga Mumblebrain says:

      We had a pumpkin glut last season. Mostly Queensland Blues-quite yummy. Still eating the blighters. I thought that was a good result until I saw the roadside vegie stalls offering FREE pumpkins-take ‘em off our hands. Tomatoes good, too, but it was after years of rubbish weather, dry winters, wretched heat, long dry spells,all of which, one can be pretty certain, are only going to be back, sometime soon.

  3. David B. Benson says:

    Too bad about the cotton, hafta wear more clothing made of hemp instead. Oh wait! Growing hemp is illegal in the USA.

    Less beef? Good. Don’t eat so much anyway; better for your health.

    Peanut butter? Eating peanut butter is about as dangerous as nuclear power plants so surely nobody ever wants to eat peanut butter again! ;-)

    • Sian says:

      David – fully agree! Except peanut butter can be healthy if you shun the 95% of pb products on the market that are full of crap and go for the good stuff – organic and additive free. Really this food item should only contain peanuts, peanut oil and a little salt – YUM.

      • Colorado Bob says:

        Peanuts are the basis of Plumpy’nut …..

        ” Plumpy’nut is frequently used as a treatment for emergency malnutrition cases. It supports rapid weight gain, which can make the difference between life and death for a young child. The product is also easy for children to eat since they can feed themselves the soft paste. The fortified peanut butter-like paste contains a balance of fats, carbohydrates and proteins (macronutrients), and vitamins and minerals (micronutrients). Peanuts contain easily-digested monounsaturated fats. They are also relatively high in calories, which means that a patient receives a lot of nutrition from small amounts, important because malnutrition shrinks the stomach. They are rich in zinc and protein — both supportive for the immune system and long bone growth in reversing stunted height, while protein also contributes to muscle development. Peanuts are also a natural source of vitamin E, an antioxidant that helps to convert food into energy.[citation needed] ”
        http://en.wikipedia.org/wiki/Plumpy%27nut

  4. paul magnus says:

    Why even now its difficult for the many to see where were heading….

    Climate Chaos shared a link.
    US snowstorm leaves Central Park braced for loss of 1,000 trees
    http://www.guardian.co.uk
    Snowstorm in north-east America – which broke record snowfall levels for October – left millions without power and 11 dead

  5. muoncounter says:

    Ironically, Texas Guvna Rick Perry has an iron grip on the state’s ‘rainy day fund.’ None of that money will go to help the farmers who’ve lost it all in the drought. In Texas, when it rains, it pours; when it doesn’t, it’s just too darned bad.

  6. Mike A says:

    If I remember correctly, a government commission in Texas called for about $60 billion in infrastructure spending so that Texas could get through droughts like this, yet Rick Perry has done virtually nothing in this respect. Perry isn’t fit to be president. Hell, he’s not fit to be the Texas governor, but the people of Texas will have to deal with that.

    • Mulga Mumblebrain says:

      He’s raised the most money, and it will be a snowy day in Hell when the weight of money fails to prevail in US politics.

      • Dennis Tomlinson says:

        The GOP power brokers want Romney, but they wield less power now that the Tea Party annex owns the GOP, and has checked in at the asylum. And the TPer’s want anyone but Romney (too much Mass. liberal, too much Romneycare, he once mentioned a belief in AGW, and he’s a member of a religious cult;). And when Cain falls back into Kane (Godfathers is horrible pizza, trust me, I’m from Chicago), the idiot from Tejas will still be standing. And the general election? Another Goldwater-64?

    • JCH says:

      He’s not fit to be President, which is why I was hoping he would get the nomination.

      As I told my out-of-state Republican friends when he announced, Rick Perry is just plain dumb. They protested then, but now agree.

  7. Colorado Bob says:

    ” $5.3 billion in losses in the agricultural sector. ”
    This figure does not include a whole list of other commodities. Vegetables , fruits, pecans, nursery crops, or losses of fish and game ( a $9 Billion business in Texas ).

  8. Rabid Doomsayer says:

    What is the overall picture for food crops at the moment? Drought here, drought there and a flood here and a flood there.

    How does the market liquidity for overall food look for the next six months. How much available production is not already spoken for?

    It really does not seem to add up, but there appears to be some big gaps in the combined data. I don’t quite know who is counting what.

  9. Charles Zeller says:

    Maybe Governor Perry knows that he doesn’t need to use Texas’s rainy day funds. Senator John Cornyn (R – TX) recently stated, “Maintaining funds for farm assistance programs is a priority for Texas. We want to make sure these safety net programs for farmers and ranchers don’t go away as a result of the budget cuts we know are coming. I’m hoping Congress will be able to offer other incentives that will help the cattle and agriculture industry in Texas cover costs.”

    Well, we’re not “agin it”. However, our Senator’s compassion should be more expansive.

    Typing from Texas (Austin)