Farmers in Texas have taken a battering from Hurricane Harvey as intense as the blows that hit cities and the region’s oil belt.
Bits of cotton—the state’s biggest cash crop—are hanging in trees. Cattle have been standing in feet of water, fatally deep for an unknown number of calves. Grain terminals along the coast, where a quarter of the nation’s wheat is exported, are shuttered, and the railroad tracks leading to them are impassable.
“We’re experienced with flooding,” said Gene Hall, of the Texas Farm Bureau. “But not like this.”
The state’s farmers and ranchers will face more climate-driven challenges in the years ahead, according to projections of future climate change.
Models suggest that the entire Gulf of Mexico region will be especially hard hit by increasing heat, more rain and stronger storms that will wallop the region’s crops and livestock as the atmosphere and Gulf waters heat up.
That could have consequences beyond Texas as the need for financial help from the government, which comes largely through federal crop insurance, escalates with the damage.
Crops Worth Billions in Harm’s Way
Hurricane Harvey submerged the country’s fourth-largest city, beat up the state’s economically all-important energy infrastructure and left widespread destruction, which could amount to $190 billion, according to one early estimate. That figure far outpaces the cost of Hurricane Katrina, until now the country’s most expensive storm, which racked up $150 billion in damages.
It’s unclear how much of the damages will come from the state’s massive agricultural industry. Texas, the country’s third-largest agricultural state, took in about $25 billion in 2016 and has an economic impact of $100 billion. Agricultural economists, government experts and farmers themselves say it’s much too early to tally the damage from Harvey, but it’s obvious the numbers will be big.
Texas produces more cotton than any other state, helping make the U.S. the world’s third-largest cotton producer. The state’s cattle industry represents the biggest chunk of its agricultural value, bringing in nearly $11 billion a year, on average, over the past five years. The state is a big producer of corn and rice, along with smaller crops, from sorghum to pecans, the nut of the official state tree.
Texas also grows more hay on forage land than any other state, mostly to feed its cattle, and huge swaths of that land were under water by the time Harvey was through. Hay, already baled for winter, is soaked.
The total hay loss is “going to be a big number and a hardship that’s going to hit ranchers long after the storm is gone,” said David Anderson, a livestock economist with Texas A&M. He estimates that 1.2 million cows and calves populate the 54 counties declared disaster areas by the governor.
“People were able to move some animals to higher ground, but in a storm like this, higher ground might still be under water,” Anderson said.
Texas cotton growers, who were on track to have their best year in a decade, could face a $150 million loss, according to Texas Agriculture Commissioner Sid Miller. The hurricane made landfall in the second-largest cotton producing area of the state, around Corpus Christi, and the growers there could lose nearly a quarter of their harvest.
“They’re estimating the damage by Harvey is going to be 400,000 bales,” Hall said, noting that the region was projected to produce 2 million bales this year. “That’s a significant hit.”
The losses will extend beyond damaged crops and livestock fatalities. Farm buildings, machinery, irrigation systems and other infrastructure, including cotton gins, have also been affected.
The record-breaking storm’s economic effects on agriculture will ripple beyond Texas. In 2005, Katrina crippled shipping on the Mississippi River and through the Port of New Orleans, where nearly two-thirds of the country’s corn and soybean exports pass.
“One of the things we saw from Katrina is how you can have a massive choke point in the logistics chain—New Orleans—and have a real negative consequence on the profitability of farmers in the Midwest,” said Mike Steenhoek, director of the Soy Transportation Coalition, an industry group that works to improve transportation infrastructure and related policy for grain growers. “It remains to be seen, with the Texas Gulf being so impeded, whether or not you see something similar.”
Climate Change Creates More Risks
Beyond the most recent storm, the state’s farmers will be forced to grapple with some tough climate challenges in coming decades.
One study, for example, found that statewide yields of corn could drop by nearly 40 percent by 2060 with projected temperature increases.
“One of the most important things about climate change is that what is today a one-in-20 scenario becomes a likely scenario,” said Kate Gordon, founding director of the Risky Business Project, which examined the economic impacts of climate change on the agricultural economy of southeast Texas and the Gulf. “So that’s a conservative number.”
The same analysis predicts that overall yields of the state’s major crops will likely decline by nearly 10 percent within four decades, while wheat yields will rise, thanks to a phenomenon known as “carbon fertilization.”
2018 Farm Bill Is Coming: What Influence Will Harvey Have?
As federal lawmakers continue their negotiations toward drafting a 2018 Farm Bill—the 10-year, $1 trillion legislation that governs the farming sector—the storm could force some battles, especially over government crop insurance, which critics say encourages farming practices that make farms less resilient to weather extremes driven by climate change.
The average cost of the program is about $6 billion a year, with most of that going to subsidies for insurance premiums. Payouts to cover damage from Harvey likely will boost that number significantly in the short term. In the longer term, the effects of climate change could cause costs of crop insurance to soar.
Last November, the Obama administration’s Office of Management and Budget, along with the Council of Economic Advisers, issued a report that looked at the effect of climate change on several sectors of the economy that could impact the federal budget. One was crop insurance.
Based on data from the USDA, the OMB report found that the government’s subsidy costs could rise 40 percent by 2080 if carbon emissions continue to rise, causing crop yields to decline, over the century.
“We’re having more and more extreme weather and more of these events,” said Paul Wolfe, a policy specialist with the National Sustainable Agriculture Coalition. “If the government is going to insulate you from those, that’s a problem.”
But for growers in Texas, crop insurance could provide a short-term lifeline.
“One thing’s for sure, this kind of event underscores the need for a safety net,” Hall said. “Crop insurance is not going to make anyone whole, but it might allow some of these producers to stay in business.”
But Does Crop Insurance Discourage Resilient Practices?
The federal crop insurance program, which covers farmers for yield and revenue losses, is the primary source of protection for crop growers in the event of a disaster. (The government pays roughly 60 percent of insurance premiums. A little more than 80 percent of all field crops have coverage. Livestock is generally not covered.)
That, some critics say, makes it all the more important that federal crop insurance does a better job of encouraging practices that make farms better able to withstand higher heat, drought and floods. For example, some critics say the current crop insurance program has discouraged farmers from planting cover crops, a practice that captures carbon, holding it in the soil and making soil better able to absorb water. This gives cover cropping the ability to adapt to climate change by making soil less vulnerable to erosion from heavy rains, among other benefits, but also the ability to reduce greenhouse gas emissions by sequestering carbon.
Critics also suggest that recent changes in the crop insurance program allow commodity growers to “hide” the impacts of climate change by discounting years in which extreme weather events damage or destroy harvests. The impacts of Hurricane Harvey, for example, may not be reflected in a producer’s average yield.
Crop insurance premiums and payouts are based on a farm’s average yield over a number of years. But, under a provision passed in the 2014 Farm Bill, farmers can throw out years in which they suffered more than a 50 percent loss, which essentially inflates their average yield.
“Essentially that allows you to exclude this flooding from your history,” Wolfe said. “It allows you to avoid the consequences of disaster and the consequences of climate change.”
Top Photo: Flooding from Hurricane Harvey stranded cattle near Port Arthur, Texas. Credit: Staff Sgt. Daniel J. Martinez/U.S. Air National Guard