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S. Texas ag poised to expand economic impact

S. Texas contributing $1.6 billion to economy. Ag production has grown steadily in area for last four years. Opportunities exist for biofuels, other commodities.

Despite adversities, South Texas agriculture has an economic impact of $1.6 billion and is poised to expand to help feed and fuel the world well into the future, according to a new study by a Texas AgriLife Extension Service agricultural economist.

“Drought, urbanization and low market prices have taken their toll, but agriculture in South Texas continues to grow and the outlook is promising,” said Dr. Luis Ribera, an economist at the Texas AgriLife Research and Extension Center in Weslaco. In the four-county Lower Rio Grande Valley, agricultural production has grown steadily in the past decade, providing income not only to growers, but the entire economy.

“All sectors of agriculture here have shown increases,” Ribera said. “The direct value, or what’s called farm gate receipts, has now reached $732 million annually. Growers spread that money around, creating a yearly economic impact of $1.6 billion in just this four-county area.”

A few other areas of the state produce more, but at number eight, the Valley remains among the top regional producers. And in a good year, the race could get closer, he said. “We’re running neck-and-neck with three other areas: the Coastal Bend, the southeast and the north.

Individually, Hidalgo and Cameron counties are ranked seventh and 24th among the 254 counties in the state, while Willacy and Starr counties are among the top 85 counties. So the Valley ranks among the top producers in one of the country’s richest agricultural producing states.”

At almost $19.2 billion, Texas ranks third in the nation in annual agricultural cash receipts, behind California ($36.2 billion) and Iowa ($24.75 billion). “In 2007, Texas fell from No. 2 in the country to No. 3 and we’ve been there ever since, but that type of income certainly qualifies us as an agricultural state; it’s still a very important industry in our economy,” he said.

The study shows the top Texas agricultural commodities include beef, 33 percent; feed crops, 15 percent; and miscellaneous crops made up mostly of nursery sales, 11 percent. Cotton comes in fourth at almost nine percent, or $2 billion.

“The nursery business is especially healthy in Texas,” Ribera said. “New and used homes use lots of sod, palm trees and a huge variety of landscape plants.”     The commodities that keep South Texas agriculture humming include beef, vegetables, nurseries and eco-tourism, the study shows. “Investors look at trends when deciding where to put their money,” Ribera said. “And the trends for South Texas show the value and demand of crop production growing.”

Projections show that by 2050, the world’s population will grow to 9.2 billion people, Ribera said. “Those people have to eat, so those projections translate into opportunities in agriculture because we’re talking about more people with more money in developing nations like China and India. Purchasing power will increase and with more wealth, people tend to buy food first,” he said.

Competitive edge

Texas, and especially South Texas, is uniquely qualified to compete with other states like California for those food sales. “We have a competitive edge to feed the world because right now we have the necessary water, land, climate and friendlier environmental regulations,” he said.

Ribera cites a study that compares the regulatory costs of growing citrus in Texas and California. “When you add up training compliance, air and water quality requirements, pesticide regulations and others, California growers spend $216.19 per acre while Texas growers spend only $44 per acre.”

There are also huge opportunities in producing biofuels in South Texas as opposed to elsewhere, Ribera said. “By 2022, according to the Energy Independence and Security Act of 2007, this country must produce 36 billion gallons of renewable biofuels per year,” he said. “We’re ideally situated to contribute to that effort, thanks to our subtropical climate that allows us to produce biomass year round.”

The area is also poised to produce fuel from microalgae because of its proximity to the Gulf of Mexico and the potential use of abundant marginal land that would not compete with land used for conventional agriculture, he said. “It won’t be easy; there are lots of challenges,” Ribera said.

“But investments into research to increase production here would be money well spent. According to a recent study at the University of California-Davis, for every dollar spent on agricultural research and extension, society gets $32 in return. Not a bad investment.”

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