A Year Like This

 A Year Like This

Drought, inflation, and supply chains throw wrenches in Texas agriculture.

Water weighed heavy on the minds of Texas farmers and ranchers last summer as the heat bubble that had stationed itself over most of the state diverted rain elsewhere. Drought loomed large, but water worries exist in most years in the Lone Star State.

In mid-October, the US Drought Monitor indicated more than 93 percent of Texas remained at some stage of drought conditions. By contrast, a year ago, that number sat around 53 percent. It’s a moving target from day to day, month to month, but available water is always a topic of concern for Texas State Senator Charles Perry, the chair of the Senate Water, Agriculture, and Rural Affairs Committee.

“Droughts are inevitable,” Perry says. “We get through one, and we may not have another one for 10 years. We may have one in five years. Weather patterns continue to change, and they’re going to change. It’s the natural evolution. So, Texas relies on the water plan to actually direct what happens when those drought events come.”

Texas has a water issue. It’s probably the least urgent in the minds of my members beacause when taps turns on then water’s not a problem.

Texas State Senator Charles Perry

The state water plan is updated every five years, most recently last spring. It is the overarching umbrella for all of Texas, both rural and urban, but what happens in urban areas can affect the business of agriculture.

“Texas has a water issue,” Perry says. “It’s probably the least urgent in the minds of my members because when taps turn on then water’s not a problem. But the truth of the matter is the water gets the least attention, and it’s probably the biggest issue Texas faces long term.”

In a year like 2022 with widespread drought, Perry says, traction can be made on water issues because water is top of mind for many. For example, of the 7,000 municipal systems in Texas, roughly 57 percent have gone beyond their useful lifespan. Old metal pipes need to be replaced. As a result, it is estimated about 143 billion gallons a year goes back into the ground via water leakage from these expired systems, according to Perry. The problem is funding to replace the pipes. He estimates it would take $190 billion to replace all the systems that are 40 years old or older.

The benefit of working municipal water systems for agriculture is that 143 billion gallons of water would remain in aquifers and be available for food and fiber production, he says. He is working on a fund that would help alleviate costs for smaller municipalities to fix their leaky pipes, which may get consideration in a year like this.

In the 1990s, Gay Gaddis spent six years as a board member at the Lower Colorado River Association (LRCA) and chaired its water committee. She saw then what Perry is seeing today and echoes his sentiments.

“Water’s the big thing,” she says.

“It’s something we continually beat the drum on because it’s that critical.”

On Gaddis’ Double Heart Ranch near Burnet, the hay crop was dismal this year after a bumper crop last year. Gaddis and her husband, Lee Gaddis, harvest about 400 acres of hay in a good year, but without rain, grass doesn’t grow.

This is the sort of thing that trickles down to livestock ranchers, she says, without water and hay, it’s hard to raise cattle. (In addition to growing hay, she also raises Texas Longhorns.) Texas cattle ranchers sold off more of their herds earlier than normal this year, too, due to drought, input costs, and not being able to feed their cattle, the effects of which will be felt for the next two to three years in the markets as sell off-related shortages manifest.

STATISTICS AND STAKEHOLDERS

On a Tuesday afternoon in mid-June, Russell Boening’s farm got an inch and a quarter of rain. It was the biggest rain he had seen since October 2021. It doubled the total rainfall since November 1, 2021, on his farm. Boening raises traditional Texas crops—corn, grain sorghum, cotton, and on occasion, watermelons, though this year, due to labor shortages, he didn’t plant watermelon—and dairy and beef cattle near Poth in Wilson County southeast of San Antonio.

Boening’s family farm is one of the 247,000 farms that dot the Texas landscape. Texas has more farms than any other state, according to the US Department of Agriculture (USDA), and the Texas Department of Agriculture sets the total economic impact at more than $100 billion. The state is ranked first in the US in the number of cattle and calves and a top producer of cotton, hay, sheep, goats, mohair, and horses.

Agriculture also employs one out of every seven working Texans. Yet, despite the large numbers of agricultural workers, farmers and ranchers themselves make up less than 2 percent of the population.

As the sitting president at Texas Farm Bureau, Boening is well versed with these statistics. He has been working for the ag industry since joining the organization’s ranks in the late ’80s as Wilson County Farm Bureau president. He has also served on the state Young Farmers and Ranchers Committee and as a state director before running for president of the state farm organization in 2014.

Both his grandfather and father served at the county Farm Bureau level, and he recalls his grandfather saying, “If you don’t take care of your business, no one will,” and that he needed to be on the county board. “How do you tell your grandfather no?”

As president, challenges aren’t few, he says. Making sure they do what they’re supposed to be doing for Texas agriculture is his biggest charge, with the magnitude of diversity in agriculture stakeholders and balancing the interests of those producers.

“The general public can get cynical about our political process and things that are going on,” he says. “We see it right now. The country is more … divided, or you can use the word polarized. It’s more so than it was 15, 20, 30 years ago, but there are people in Austin, there are people in DC, there are people in other state capitals that are trying to do really what they feel is right for their communities, for their country. You may not always agree with their opinions on things. That doesn’t mean that they’re bad folks or that they’re not trying to do the right thing. They just maybe look at it differently.”

Balancing those differing opinions benefits Texas agriculture, he says. With voices from Dallas to Brownsville, Beaumont to El Paso, 13 state board members from across the state, “as the leader of the board, I feel like it’s my job to make all that flow together,” he says. “Somehow you have got to come together. … When we get done and we take that vote—the vote may be 10 to 3, it might be unanimous, but it might not be—as leaders, we have to go out and be united. You have to support that decision you made in conjunction with other leaders.

“I was told early on, be yourself, be real, be honest,” Boening adds. “Then people will disagree with you at times, but if they know that you’re always being honest and real with them, they may not agree with you all the time, but they’ll respect you.”

BRIGHT SPOTS AND CHALLENGES

Over the last three years, and counting some would argue, COVID-19 has had a hand in disrupting the flow of agricultural products to market. In production agriculture, however, cows got milked and fed. Crops were planted and harvested. With precautions in place, life went on in rural Texas for the most part. Supply chains and other pieces of the equation in getting products to market suffered.
“You don’t want folks to go hungry, but when people went to the store and couldn’t find that certain kind of beef that they wanted, maybe that was a little bit of an eye-opening experience. Because there’s still plenty of food there,” Boening says, “maybe it’s just ground meat, maybe it’s just some eggs and bread, but you weren’t going to go home with an empty grocery cart.

“The bright spot for me is that it just seemed like there’s a better appreciation for agriculture,” Boening adds. “We have a saying around here, ‘It’s not about the Boenings.’ It’s about our industry. It’s about what’s important to this country. Food security is important. We understand that a strong military is important for our security, for national security. Food security is national security as well.”

Perry agrees food security is national security and is concerned about agricultural land loss. “We continually have land pulled out of production,” Perry says. “But when you start seeing that in the food industry, specifically, I’m concerned that we’re going to wake up with such a reduction in production land and agriculture production that we put ourselves at a very insecure place in the world as far as depending on our enemies for our food and our fiber.

“As we go through these conversations about what does ag look like 25 years from now, because of the cost of getting into ag, because of the generational farmer, the third and fourth generation are saying, ‘That life’s not for me,’ ” Perry says. And as production land decreases, “our food and our opportunities to produce what we need to live on is being transferred to some foreign source that we can’t depend on. So I think that’s a broader conversation that it’s time to start having that as a real conversation about what does 20 years look like on our food supply.”

Those concerns are reflected in the data. According to the 2017 Ag Census, Texas had more than 127,000,000 acres in agricultural production; the 2021 USDA State Agricultural Survey cited 1,000,000 less acres in the state being used to produce food, fiber, and fuel.

We’ve seen droughts, and we’ve seen inflation. You don’t like to see them at the same time.

But on the farm, “challenges really never change a whole lot,” Boening says. Inflation has fallen and risen many times. The supply chain issue is particularly prickly right now. “It’s not only the cost of things, but it’s the availability.”

It’s been 40 years since Boening returned to farm with his family, which includes his dad, his brother, his brother’s wife, and his wife, Margie. He has learned to pivot. He was fresh out of college when his uncle sold his interest in the family farm to his father and provided the opportunity for him to come home. This was in the 1980s, a decidedly difficult decade for farmers and ranchers. Interest rates were through the roof, running 15-18 percent. Sounds familiar.

Fertilizer costs begged for caution as this year’s planting season began. Boening says they switched and planted grain sorghum in some fields instead of corn because it is more drought-tolerant and needs less fertilizer. The harvest isn’t as large. But the gamble is: Do you plant that or risk higher costs in fertilizer and irrigation than harvesting corn would net?

Farmers and ranchers are resilient, though, he says, and notes they’ve been here before. “We’ve seen droughts, and we’ve seen inflation. You don’t like to see them at the same time, which seems like we’re getting a double dose. But is it going to hurt bottom line? Big time. Yeah. It’s going to hurt the bottom line.”

Crop insurance will be crucial this year to keep those affected in business for another season, he says. “It’s important to production agriculture, and it’s important to consumers.”

Rebecca French Smith

Rebecca French Smith is the publisher of Texas CEO Magazine.

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