Special Report: Commodities
Quarterly Survey of Agricultural Credit Conditions in the Eleventh Federal Reserve District
Third Quarter 2009
Federal Reserve Bank of Dallas

List commodities grown in your lending area and rank the top three in order of importance.

Nearly 80 percent of total land acreage is used for agriculture in Texas. Pastureland comprises two-thirds of total Texas farmland and supports the state’s large livestock industry, which ranked No. 1 in the nation with $10.5 billion in sales in 2007 (Chart 1). Cropland accounts for most of the remaining agricultural acreage, with a wide variety of commodities grown in the state (Chart 2). Corn, cotton and hay were the top three crops, totaling more than $3.3 billion in production in 2008.[1]

The third quarter 2007 Survey of Agricultural Credit Conditions listed the most important agricultural commodities in each lending area as reported by participant banks. As a follow-up, this quarter we asked Eleventh District bankers to rank the top three commodities produced in their lending region. The ranking has changed slightly from 2007 (see "Agricultural Commodity Ranking in the Eleventh District"). For example, corn has replaced cotton as the second-leading commodity in the district; poultry and peanuts have declined in importance.

The survey also asked Eleventh District bankers to highlight any changes in the types of crops grown in their region. The most significant change was a shift away from cotton toward grains such as corn and sorghum in several regions. The decline in cotton production was largely due to high planting costs and low commodity prices. Peanut acreage shrank in the Northern Low Plains, Cross Timbers and Trans-Pecos and Edwards Plateau regions. The dairy industry expanded in the High Plains, East Texas and Southern New Mexico regions. A continued increase in recreational use of farmland was noted in West Texas as activities such as hunting have become more prominent.

The following pages display a graphical representation by region of the data gathered in this commodities survey, along with the comments received.

Note

1. National Agricultural Statistics Service, U.S. Department of Agriculture.

Commodities Comments

Question: Have there been changes in the types of agricultural commodities grown in your region? If so, please explain.

There has been a shift away from cotton to corn and forage feeds.

There have not been any significant changes in our area.

There has been a shift from irrigated cotton to irrigated corn due to price variances. Cotton is still being planted primarily on dryland acres.

We are seeing more cotton being grown in place of the winter wheat crop.

Less cotton is being planted as a result of market conditions and rising costs.

More cotton is being grown.

A few dairies have come into this region during the past year. Cotton continues to be planted, but the overall acreage remains small.

More sorghum and sunflowers are being grown this year due to the drought.

There has been a shift away from cotton to grains due to profit margins.

The drought has had an impact on what is grown in the area; water is the defining factor.

For 2009, more grain (milo) is being planted due to weather-related cotton losses.

We are seeing an increase in the number of dairies as well as increases in feed for dairy cattle.

There has been a trend toward raising more cattle and growing less cotton during the last 10 years.

There have been no substantial changes in the types of agricultural commodities grown.

Cotton acreage is decreasing with corn and sesame crops being planted instead.

More grain is being grown as a means of rotating the cotton crop.

Peanuts used to be the main crop in the area, but now there are only a few acres grown here. The dairy industry has been shrinking in the past year.

Very little cotton was grown here this year.

The mix of crops grown does vary depending on commodity prices.

Producers are experimenting with nontraditional crops such as sesame.

Less cotton is being planted but more wheat and corn.

There has been an increase in horses in this region.

We have seen more ground going to cotton, primarily for the base government payments. Less row crops are being grown each year. Cotton is no longer grown in our lending area.

Farmers continue to rotate crops.

Over the last few years, turf grass has increased due to the homebuilding boom.

Rice acreage has increased, while cotton acreage has decreased. Organic rice acreage is expanding.

We have seen more and more oil seeds and wheat grown in the last few years than we have seen in the past.

Region 10—South Texas
There have not been any substantial changes in South Texas.

Region 11—Trans-Pecos and Edwards Plateau
There are virtually no peanuts grown in the area anymore. There are a few (100 acres) vineyards planned as well as a few specialty crops being tried by area farmers.

Livestock herds are being downsized due to ranches being sold for recreational or nonagricultural use. Land prices have been too high for producers to buy for ag operations.

There is exotic game being raised in our area for the first time.

Predator problems have forced many ranchers out of the sheep and goat business. Many absentee land owners do not practice predator control at all.

Hunting is increasing in prominence, while livestock production is decreasing.

Cotton production and cantaloupe acreage are both down.

We are seeing a reduction in cotton but large increases in corn being grown.

We have more dairies in the area, which means that more green crops are being planted to support the dairies.

There are fewer hay and chile crops in the area. More beans are being grown instead.

We basically have the same crop mix.

There has been a change from cotton to corn based on input costs and commodity prices.

Recently more acres of cotton are being replaced with grain crops. Corn has replaced cotton as the major crop in the area. Sweet potato acres are increasing in the area. A new sweet potato processing plant is being constructed, which could drastically change the crop composition of this area.

Quarterly Survey of Agricultural Credit Conditions is compiled from a survey of Eleventh District agricultural bankers. This publication is prepared by the Federal Reserve Bank of Dallas and is available without charge by writing to the Public Affairs Department, Federal Reserve Bank of Dallas, P.O. Box 655906, Dallas, TX 75265-5906, or by telephoning (214) 922-5254. For questions regarding information in the release, contact Laila Assanie, (214) 922-5191.