Thursday, March 24, 2011

Texas Drought To Increase Wheat and Cattle Prices

The worst Texas drought in 44 years is damaging the state’s wheat crop and forcing ranchers to reduce cattle herds, as rising demand for U.S. food sends grain and meat prices higher.

Texas, the biggest U.S. cattle producer and second-largest winter-wheat grower, got just 4.7 inches (12 centimeters) of rain on average in the five months through February, the least for the period since 1967, State Climatologist John Nielsen- Gammon said. More than half the wheat fields and pastures were rated in poor or very poor condition on March 20.

Dry conditions extending to Oklahoma, Kansas and Colorado may cut crop yields in the U.S., the world’s largest exporter, as too much moisture threatens fields in North Dakota and in Canada. Wheat futures in Chicago are up 50 percent in the past year, after drought in Russia and floods in Australia hurt output and sent global food prices surging. Wholesale beef reached a record this week, and the U.S. cattle herd in January was the smallest since 1958.


Parts of Texas, Oklahoma, Kansas and Colorado had less than 25 percent of normal precipitation in the past 30 days, National Weather Service data show. The region may get some help from storms beginning March 26, which may drop about a half an inch of rain, said Joel Widenor, a meteorologist at the Commodity Weather Group LLC in Bethesda, Maryland.

“In a lot of places, there’s very little moisture in the ground,” said Nielsen-Gammon, the state climatologist who also is a professor of atmospheric sciences at Texas A&M University in College Station. Low subsoil moisture “will make us very susceptible to drought this summer if we have extended patches of dry weather,” he said.