By Tian Su
The state’s agricultural economy is facing many challenges, including prolonged drought conditions, rising inflationary pressures, and significant disruptions in global supply chains. For farmers and ranchers, these factors are not just abstract issues—they are daily realities.
Ongoing Drought Conditions
This year the state is facing some of its toughest drought-related challenges yet. While parts of Texas have experienced heavy rainfall and flooding from severe storms and hurricanes, the majority of the state is grappling with drought conditions of varying severity. In fact, the drought situation is worse now than it was at this time last year, making Texas the hardest-hit state in the entire country.
As of Nov. 19, 2024, approximately 49 percent of Texas is under drought conditions, and 13 percent is extreme and exceptionally dry.
Crops at Risk
Key crops in Texas, including cotton, corn, and wheat, are suffering under such dry conditions. While Texas is the nation’s leading cotton producer, farmers are contending with poor soil moisture, which leads to reduced yields and higher production costs. In particular, cotton, which requires a large amount of water during the growing season, has faced significant setbacks. Corn farmers are also experiencing difficulties, as drought reduces water availability for irrigation, hindering plant growth. The latest USDA crop production report says corn production in 2024 was 199.4 million bushels, down from 256.2 million bushels in 2023.
Livestock Impact
Texas ranchers are facing similar struggles with their cattle and other livestock. The lack of sufficient rainfall has affected the availability of forage crops, leading to poor grazing conditions. As a result, ranchers have to spend more on supplemental feed, further increasing costs. Ranchers also have to cull older animals, prioritizing survival of younger cattle despite the associated economic strain.
Rising Costs and Inflationary Pressures
The rising cost of fuel, fertilizer, feed, and labor has strained farmers and ranchers, many of whom were already facing financial pressures due to the ongoing drought.
Fuel and Transportation
Fuel costs have surged over the past year, driving up transportation costs for farmers who need to haul their products to market or transport feed to livestock. Even though the fuel prices remain stable recently, with diesel at $3.37/gallon, the prices are still a substantial burden, especially for larger operations requiring extensive vehicle use. For example, a tractor burning 280 gallons in a ten-hour workday accumulates considerable daily expenses. With the high cost of diesel, the price of transporting goods, including crops and cattle, has become an increasing burden on farmers’ profit margins.
Fertilizer and Seed
Fertilizer prices have skyrocketed, in part due to the global supply chain disruptions triggered by the COVID-19 pandemic, the war in Ukraine, and other geopolitical factors. This has made it more expensive to maintain healthy crops. The rising price of fertilizers and seeds is squeezing profits for cotton and corn farmers, and they face tough decisions about how much to apply to crops without overextending their budgets. This situation may worsen next year because of the potential for a more severe trade war and high tariffs.
Labor
Many farmers are finding it increasingly difficult to hire and retain seasonal labor due to both inflation and a broader labor shortage across the country.
As pointed out by the USDA, an intriguing trend is reshaping the labor force: as fewer young immigrants choose to work in farming, the average age of foreign-born farmworkers is steadily climbing. This shift is not just a minor uptick but a significant change, with the average age of foreign-born farm workers increasing by nearly seven years from 2006 to 2022. Meanwhile, U.S.-born farmworkers have seen little change in their average age over the same period, highlighting the unique challenges faced by the immigrant workforce.
While labor shortages persist, the agriculture industry continues to develop new technologies to help overcome challenges. Nonetheless, sectors like dairy and fruits that rely more heavily on manual labor may face growing challenges.
Supply Chain Disruptions
Global supply chain disruptions have created headaches for farmers and ranchers in Texas, particularly when it comes to sourcing essential goods like feed, equipment, and packaging materials. The pandemic’s ripple effects continue to cause delays in deliveries, rising transportation costs, and shortages of key inputs.
Feed and Input Shortages
For Texas ranchers, disruptions in the global supply of grain and feed ingredients, including corn and soybeans, have been a significant issue. In particular, supply chain delays and high transportation costs have made it difficult to secure adequate feed for livestock. Some ranchers have had to seek alternative feed sources, which may not be as nutritionally balanced, leading to concerns about animal health and productivity.
Equipment and Supplies
Texas farmers also face rising costs and delays for agricultural equipment and parts. The shortage of microchips, which are crucial for modern farm machinery, has delayed the delivery of essential farming equipment, leaving some farmers unable to purchase or repair machinery in time for planting or harvesting seasons. Additionally, rising shipping costs have contributed to the higher price of agricultural supplies, which has added another layer of financial strain.
State and Federal Help
Recognizing the severity of these challenges, both federal and state policymakers have introduced various measures to support Texas farmers and ranchers through these difficult times.
At the federal level, the USDA has continued to offer subsidies for crop insurance, which can help mitigate the financial losses caused by adverse weather conditions as well as increased supplemental feed costs. In some cases, USDA programs and the Natural Resources Conservation Service (NRCS) are providing funding to help producers implement water-saving technologies or improve irrigation systems to make better use of available water resources.
At the state level, the Texas Department of Agriculture (TDA) has been actively working to support farmers and ranchers affected by drought. In 2024, the state has expanded drought relief efforts, including providing low-interest loans for farmers who are struggling with cash flow issues due to drought conditions. Additionally, TDA is offering technical assistance for water conservation practices and helping farmers implement sustainable practices to reduce water consumption.
Texas agriculture’s future remains uncertain, with ongoing drought conditions, inflation, and supply chain disruptions posing significant challenges. However, innovation, adaptation, and government support continue to provide hope for relief.
Source : tamu.edu