LUBBOCK, Texas (DTN) -- Coming off what was a strong year in cotton production in Texas, hopes of a repeat have evaporated like water from a pivot nozzle in 100-degree heat.

Driving around, there are empty fields from Amarillo to Lubbock, and beyond that are fields that are planted but are bare of plants -- except for the occasional field that has been reclaimed by tumbleweeds. In a normal year, an irrigated field might yield 750 pounds. This year, even in irrigated fields, yields are much lower or nonexistent.

While agriculture sometimes takes a backseat to other industry, the cotton industry is so significant around Lubbock that city officials and the local mall have called Plains Cotton Growers office to gauge the overall economic impact of crop losses on the community. Farmer losses are insured, but the gins and oilseed crushers that rely on the cotton business are going to suffer from lack of business.

About 40 minutes west of Lubbock, Paul Wilson, general manager at United Cotton Growers in Levelland, has had frequent talks with farmers telling him what they aren't going to produce this year.

"They have all filtered through to continue to give me bad news," Wilson said.

Pulling up a PowerPoint, Wilson shows some economic impact from United Cotton Growers. Last year was a record year with nearly 184,000 tons translating into $75 million in sales. With 67,548 tons of seed sold, $6.7 million in margins, as well as expenses and labor costs, the gin had $101 million in direct buying, selling or payroll.

"We're going to be at about 25% to 30% of that this year," Wilson said. "Take that across the southern plains, you are talking about a train wreck."

For his work crew, two shifts might work from Oct. 1 until March ginning cotton. This year, the work may be done in early December. He might not be able to get the migrant crews to work for a shorter period of time.

But Wilson notes the gin is in a good financial position to handle this kind of lost business for a single year. After all, seeds are selling for $380 a ton and hulls are $245 a ton. Cotton burrs, almost worthless a year ago, are selling for as much as $70 a ton to livestock producers desperate for feed.

"Financially, we are secure this year, but it takes away all your cushion," he said.

But gins and farmers alike will probably get by with less machinery and other normal purchases and repairs.

"The guys who really get hurt in this more than anybody else are the supply people," Wilson said.

Jerry Butman, general manager of the Lubbock Cotton Growers gin, expects to receive about one-third the crop as last year at his gin, which just built a new $7.3 million facility in 2009 to help speed up the gin's larger volume.

"We certainly hope this is an exceptional year," Butman said.

Plains Cotton Growers Inc. held a bi-monthly update Friday morning with producers, agronomists, extension agents, gin managers, oilseed crushers and other interested parties to assess potential production, and other challenges with the crop.

There is no dryland cotton crop. About 2.47 million dryland acres were planted in the 41-county Plains Cotton Growers area and 2.18 million acres have already been declared abandoned. The theory is that the other 290,000 dryland acres also failed but might be coded incorrectly at the USDA office.

Rainfall around Lubbock has ranged from anywhere from an inch to 3 inches for the year. Even irrigators recognize their water is largely supplemental. With no rainfall, irrigated crop conditions range widely in the southern plains. About 1.9 million irrigated acres were planted, of which nearly 228,000 have been abandoned.

The failed or abandoned acres are higher than anytime the cotton group has been keeping data on production. Plains Cotton Growers estimates that out of a projected 5.3 million bales, perhaps 2 million will be harvested.

One major theme Friday was that the drought, and the demand it has placed on irrigation, may lead to dramatic long-term changes in agriculture on the southern plains. The aquifer just can't supply the water needed for production this year.

Rex Kennedy, a Lubbock Cotton board member who farms with his brother-in-law, said his operation had about 4,600 dryland acres that were immediate crop failures. They have another 2,100 acres of either drip or pivot irrigation. His normal irrigated yields for those will also be cut in half.

"What's unique about this year is how hard it was to get an irrigated crop up and going," Kennedy said. "Getting this irrigated crop up to a stand was the most frustrating thing I've ever dealt with."

Kennedy irrigated bare ground for nearly two months to try to build some moisture in the soil before planting, but irrigated water was battling wind, heat and low humidity that just took the moisture out of the plant and the ground. He replanted seed three times under two of his pivots.

Farmers and others said Friday they won't crank a pivot next spring, especially if there is no significant rain. As Kennedy learned, irrigation truly is supplemental and can't make up for a complete lack of rain.

Kennedy has kept the pivots running almost constantly, causing his water pressure to drop as much as 40% coming out.

"We just can't grow cotton without the Lord's help is what it comes down to," he said. "If you reckoned you could grow cotton without him, you can reckon again."

The vast majority of farmers bought crop insurance that had a $1.23-a-pound price guarantee. Those producers will live to fight another day. Added to that, producers could have gotten an extra 13-cents-a-pound coverage for their seeds this year as well.

Kennedy said the saving grace has been the crop insurance. Oddly enough, the immediate dryland crop failure may pay better than the irrigated crop that Kennedy says he keeps throwing money at with irrigation. He didn't have to spray herbicide on that dryland crop and won't have to pay to harvest. He had 65% coverage, which is about normal for the cotton producers in the area.

"The way it worked out, we made money, but we can't do that year in, year out," he said.

Yet, those bare 4,600 acres pose serious problems for both soil erosion and possible weed growth that Kennedy will be fighting between now and spring, he said. He has been running equipment over the soil to break it up for soil erosion purposes.

"I'd almost rather have a weak crop than a zero crop," he said. "You have to manage the ground and it's better to have some cover."

Chris Clayton can be reached at chris.clayton@telventdtn.com

(AG/SK)

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