Dairy producer Andy Schaap has a decision to make. Unless rainfall ends the drought gripping the Texas panhandle, he'll have to spend more money irrigating his alfalfa and wheat or buy even more hay and silage for his 2,400-cow herd near Hereford, TX.

“If we don't get help from rain, there will be increased costs to irrigate everything,” Schaap says.

The entire state of Texas is dry. Most of the panhandle is in a moderate drought, with East and Central Texas experiencing severely dry conditions.

Most of the state is also short or very short of topsoil moisture. As of late January, 89% of the pasture and rangeland was in poor to very poor condition. The state's wheat crop, which many producers, including Schaap, use for silage, is nearly as bad, with 83% in poor to very poor condition.

Schaap grows 80 acres of irrigated alfalfa, 540 acres of irrigated wheat and 800 acres of native grasses.

“Unless we get rain by springtime, I don't expect a whole lot of regrowth of the native grasses,” he says.

Schaap uses his native grasslands to graze his young stock. “I anticipate I'll need to buy local silage for the replacements,” he adds. “And I expect to pay more for irrigated silage.”

Schaap buys most of his alfalfa, shipping in 60 tons a week from Oklahoma, Kansas and Colorado. But Oklahoma is dry, too, and Kansas is already feeling the pinch of increased demand from Texas.

“If the drought continues, I'm concerned it will cause my forage and feed costs to rise,” Schaap says.

“Dairy producers who haven't already done so need to evaluate their forage supplies,” says Tamilee Nennich, Texas A&M University extension dairy specialist in Stephenville. “If they think they are going to be short, they need to look into alternative high-fiber feedstuffs, such as soy hulls, cottonseed, cottonseed hulls, wheat midds and beet pulp.”

Forage shortages will be most common for replacement heifers and dry cows, says Nennich.

“Local forages are really taking a hit,” she notes. “In Central Texas, many producers who usually raise small-grain cover crops for forage will get absolutely nothing this year.”

Since November, prices on all qualities of alfalfa and grass hay in the panhandle area have increased $30-40/ton, reports James Ward, USDA hay reporter at Amarillo.

“Hay supplies are very limited throughout the state,” says Ward. “There is still hay being produced in the panhandle area, but most of it is on irrigated land, and with the high natural gas and fertilizer costs, some growers are choosing not to turn their pumps on.

“Most of the dairy hay we have now is coming from Nebraska and Kansas,” Ward notes. “Some is even coming in from Wyoming and Canada.”

Dealers and brokers throughout Texas are contacting suppliers they haven't needed to use for a decade or more.

“My mom-and-pop growers in southern Kansas are out,” says East Texas hay dealer Butch Carraway of Carraway Hay & Tractor, Sulphur Springs. “They've been drained due to the demand from Texas.”

Carraway has turned to the Topeka-Salina area in Kansas for hay.

“The last time I went that far north was in 1997-98,” he says. “But it wasn't this bad. We're turning down markets. The demand is overwhelming.”

While all of Texas is heavily populated with cattle, the panhandle is a major feedlot area, and the Hereford area is a growing dairy region as well. In 2005, the Hereford area had 38,000 dairy cows. The panhandle had more than 3.2 million cattle, mostly beef cattle, also concentrated around Hereford, according to the National Ag Statistics Service.