Over 96% of Texas is now in extreme drought with 86% of the state in exceptional drought conditions, according to the US drought monitor. Conditions like this haven’t been seen in the southern State since the record drought of 1956.

Scientists attribute much of the blame for the current drought on La Niña, a weather phenomenon signaled by unusually cool surface waters in the tropical Pacific Ocean. Now a new La Niña is emerging, setting Texas up for another dry winter, said David Miskus, a drought specialist at the National Oceanic and Atmospheric Administration's Climate Prediction Center. State climatologist John Nielsen-Gammon has warned that the drought could be the beginning of a decade-long dry spell.

The devastating drought this year has caused $5.2 billion in damages to the state's agriculture sector. It is not just the lack of water and feed that is the problem.  Wildfires have been raging across the state destroying pasture land, buildings and stock. Economists at Texas A&M University estimate that in the past nine months the fires have caused $152 million in direct losses to the state's farmers and ranchers. More than 1,500 horses, cattle, sheep, and goats have been killed by the wildfires, according to reports.

Some 198 agricultural structures have been destroyed, as well as assorted pieces of agricultural equipment, and 2.9 million acres of pasture land. The drought has dried up crops and forced the sale of entire herds of cattle because no grasslands still exist where they can graze. Direct losses by commodity include 2.06 billion for livestock, $750 million for hay, $1.8 billion for cotton, $327 million for corn, $243 million for wheat, and $63 million for sorghum.

Livestock and arable production hit hard.

The drought is now hitting home for ranchers as they are forced to sell weakened and impoverished stock; this in a State that is reputed to supply 16% of the nation’s beef cattle. Auction houses are said to be inundated with drought stricken cattle now selling at a quarter of the price they would normally expect. This is all leading to the largest ever cut in the national herd. Shrinking cow numbers and tight supplies of feeder cattle and calves could lead to historically high US live cattle and beef prices next year.

Texas and Oklahoma produce almost a third of winter wheat in the U.S. — the hard wheat used in bread products. Bloomberg financial news quoted wheat economists predicting a 50% jump in winter-wheat prices. If the dearth of rain continues and there is no moisture in the soil to germinate the wheat, prices could climb higher still.

The total economic impact of the $5.2 billion agricultural production loss is an estimated $8.7 billion. Texas A&M University say this includes the impact to business ranging from fertilizer dealers, elevators, and processing plants to grocery stores. The negative impacts on the Texas economy will continue to increase as long as the drought persists.

The ripple effect from the Texas drought could have an impact on food prices that could last for months if not years.