Early estimates of agricultural losses due to the recent wildfires are $21 million, but that could change as producers make final reports of their actual damages in the coming weeks, according to Texas A&M AgriLife Extension Service economist Dr. Steve Amosson.
“The assessment of acreage burned is about all we have a good estimate on at this time,” said Amosson, AgriLife Extension economist in Amarillo, Texas. “There are a lot of losses, and we just don’t know all of them at this time.”
Based on current information, Amosson said the loss estimate of $21 million does not account for any loss of equipment. The basic categories considered are: lost pasture, $6.1 million; fence repair or replacement, $6.1 million; lost buildings and corrals, $3.8 million; livestock death losses, $4 million, and emergency hay and feed, $1 million.
“Every individual rancher will weather these losses differently, depending on what their financial position was at the time of the fire,” Amosson said. “If they had large losses and already had a marginal financial position, then it could put them out of business, but in most cases, it will just create more financial stress for them, and they will keep ranching.”
For many ranchers, little insurance money will come into play, he said.
“Typically, not much is insured except for ranch houses, sometimes major buildings and, once in awhile, the cattle,” Amosson said.
Still, some programs are designed for this specific purpose that may help offset losses, such as the 2014 farm bill Livestock Indemnity Program, he said. Eventually, livestock losses must be registered with the U.S. Department of Agriculture's Farm Service Agency in order to receive partial compensation.
With proper documentation, this program can compensate ranchers for 75% of the market value of cattle lost in the fire until the preset loss limit for a producer is reached, Amosson said. Additionally, a portion of fencing replacement costs may be covered through the Environmental Quality Incentives Program of USDA’s Natural Resources Conservation Service.
While the current estimate is that about 2,500 cattle were lost as a result of the wildfire, Amosson said that number is expected to climb as more animals succumb to severe fire-related injuries. Other animals are being sold to packing plants, depending on how badly burned they were, he added.
“When we value the deaths of cattle at market value, including disposal costs, we’re talking about $3.6 million at this point, and I expect that to go up,” he said. “We’re still dealing with chaos. They’re still trying to find cattle.”
So far, it will cost roughly $6.1 million to recover about 480,000 acres of the pasture that burned, which has to be set aside for the rest of 2017, Amosson said. “Basically, ranchers will not be able to graze these pastures this year and will only be able to stock them at half-capacity next year while they recover,” he said.
Amosson estimates that the second major expense tied to the fires will be about $6.1 million to replace and repair fences in the northern Texas Panhandle that were either destroyed by the fire or from cattle trampling them to escape the blaze.
“An estimated 975 miles of fence were affected,” he said. “We are assuming that half will be repaired at a cost of $2,500 per mile, and the other half will have to be replaced at a cost of $10,000 per acre.
“I expect the amount of fence that has to be replaced to rise once they start to repair it, and if the wire is too brittle to be effective due to the heat, ... this loss will increase,” Amosson said. “The total amount that will have to be replaced versus repaired will not be known for some time.”
The longer- term impact to the cattle industry in the most affected areas is trying to figure out how the remaining 13,000-14,000 cattle in the path of the fire will be fed because of depleted grazing land, he said.
“Initially, ranchers are being provided donated hay and feed that has come into three livestock supply points if they choose to use it, but long term, they will have to make a decision to buy hay for a long period of time, send the cattle to market or lease pasture elsewhere,” Amosson said.
The estimated $1 million in feed costs was calculated based on consumption of 30 lb. per day per animal for a 60-day period for cattle in the fire area, he said, with the expectation that they will be either moved or sold by the end of that period.
According to Amosson, the loss of equipment, such as this pickup and one-of-a-kind hay trailer, have not been included in economic damages at this point (Texas A&M AgriLife photo by Kay Ledbetter).
Amosson said one of the hardest figures to determine is on assets such as corrals, equipment and outbuildings. “While, undoubtedly, losses have occurred, no firm tally of these has been made to date,” he said. “However, with an estimate of 125 structures lost throughout the three fire regions, that loss is expected to be in the neighborhood of $3.7 to replace. At this point, we have no idea as to how much equipment has been damaged.”
Amosson said he did not figure the losses from the 2006 Panhandle complex fire, which, according to the Texas A&M Forest Service, is considered the largest fire ever in the state of Texas, burning 907,245 acres.
However, he said due to increased costs and cattle prices, he estimates the that total damage will be about 70% of the cost of the 2006 fire.