Upside-down dairy-cow mortgages in East Texas

Most of the state had adequate or better soil moisture levels, but East Texas remained extremely dry, according to Texas AgriLife Extension Service reports.

According to the U.S. Drought Portal, the public information website for National Integrated Drought Information System, many counties bordering the Texas/Louisiana border are now experiencing "moderate drought" conditions.

The extremely dry region encompasses counties from north of Longview to the Houston area and east of U.S. Interstate 45.

The extremely dry and moderate drought counties comprise only about 10 percent of the state, according to the U.S. Drought Portal.

Wood County, east of Dallas, is technically "extremely dry" and technically not in a drought, but if you're a livestock or dairy producer, it's a moot point, said Clint Perkins, AgriLife Extension agent for Wood County.

"But we are pretty droughty," Perkins said. "If we don't get a rain about every 10 to 14 days, we're in a semi-drought because of our sandy soils."

The hardship on his county's farmers has been compounded because of not just a dryer than normal May but a cooler one too, he said. The past week was the first this year that nighttime temperatures climbed into the high 60s to low 70s.

"Our bermudagrass pastures have greened up, the nighttime temperatures really haven't been high enough to promote excessive growth," Perkins said. "Coupled with the very limited rainfall, we're just not producing any hay right now."

Most of the dairies in his area are grazing dairies that supplement with feed, Perkins said. They have had an abundance of ryegrass, but ryegrass is a winter grass, and it's drying down and bermudagrass pastures are trying to come on, but there's no moisture.

Perkins is particularly concerned about the dairy producers in his county. Because of previous droughts, low milk prices and high feed costs, they have lost considerable equity, and now milk prices are bottoming out again. He hasn't seen any dairy operators sell out yet, but suspect they would if they weren't "upside-down" on the financing of their cow herds.

"I'd probably lose some of them if the price of cows were a little higher," he said. "The problem is they have their cows mortgaged for more than they are worth right now."

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