Texas drought could impact families' pocketbooks across the country

This summer, as Hurricane Irene pounded the East Coast of the U.S. and flooded communities far inland, temperatures in Austin soared to 112°F and across the Lone Star State it was bone dry.

Caught in the grip of a heat wave that fed on the drought – where sunlight hit the ground, evaporated any moisture in the soil and raised the temperature of the soil, making the ground a virtual hot plate – Central Texas saw 90 days of 100 plus degree days.  And while the scorching heat finally broke at the end of September, the drought is far from over and is expected to have a ripple effect that will spread beyond the region in the months ahead, impacting the one place Americans do not need to feel the hurt: their pocketbooks.

From beef prices to the cost of a pair of socks to the price of bread, the Texas drought of 2011 will leave its mark on family budgets.

In Texas, losses, so far, are estimated at over $5 billion.  The state lost a little over half of its cotton crop.  Acres of drought parched and wildfire blacken fields are reminiscent of the dust bowl of 1933.

Texas produces 55% of the U.S. crop and two-thirds of America’s yield is exported to mills outside of the country where cheap clothing is manufactured and shipped back to US retail shelves.  Now with shrinking supplies, cotton prices are surging and the price of those inexpensive t-shirts could be going up.

The effects go beyond this year’s cotton harvest. Ranchers are selling off cattle in historic numbers, including breeding stock that ranchers can no longer feed and water. The state has also lost an entire hay crop, making winter feeding an expensive proposition. While that may mean lower beef prices in the short run as plenty of newly slaughtered cattle hit the marketplace, it likely will mean higher prices down the road since valuable breeding stock is being sold off.

The sell-off has profound implications for the U.S. beef industry since ranchers have developed cattle suited to specific environments over generations. Rebuilding herds will be a long, expensive process.

The U.S. cattle herd is down to its lowest count since 1963 and skyrocketing prices and diminished supplies could put the price of prime steak beyond the family budget in 2012 and ’13.

The bad news does not stop there. Winter-wheat-planting season runs from September through October and rain, which Texas still has not seen much of,  is vital to germination. Texas and Oklahoma produce almost a third of winter wheat in the U.S. — the hard wheat used in bread products – and it is expected there will be a 50% jump in winter-wheat prices. If the drought continues, as it is expected to do , prices could climb higher still.

The Texas state climatologist says that weather patterns are setting up to be similar to those of the extended drought of the 1950s and that Texas could be looking at an multi-year drought for the next five years and could even be in place until 2020.   The temperatures may have eased in Texas recently, but pocketbooks around the country and the globe will be feeling the heat for some time to come.