Texas cow-calf producers being squeezed | TSLN.com

Texas cow-calf producers being squeezed

Russ Quinn
DTN Staff Reporter

COLLEGE STATION, TX (DTN) – Even though the cattle industry continues to round up good prices for cattle, Steve and Morita Schoeneberg of Louise, TX, wrestle with higher input costs in their operation.

The Schoenebergs operate a 600-head cattle ranch on about 1,800 acres along the Texas Gulf Coast, southwest of Houston. While they grow most of their own forage, they feel the effects of high fuel and fertilizer prices.

“More and more with the cost of everything, I feel we are just spinning our wheels,” said Morita, who attended the 54th annual Texas A&M University Beef Short Course while her husband stayed home to work the ranch.

The Schoenebergs feel the effects of the three Fs – feed, fuel and fertilizer – as Texas cattle ranchers deal with lower profit margins despite higher cattle prices.

That theme was repeated several times during the beef course held on the central Texas campus Aug. 4-6.

According to the Standardized Performance Analysis (SPA), a program administered by Texas A&M to examine the financial health of ranches, the total cost to maintain each female in a herd in 2007 was $590.33, and the 2007 cost per hundredweight of weaned calves was $116.90. Stan Bevers, professor and extension economist for Texas A&M based in Vernon, TX, said costs accelerated since 2002, and he believes costs will rise more in 2008.

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“You look at the increasing costs of inputs over the last six months or so, especially if you look at corn prices, and we most likely will have over $600 costs per cow for 2008,” Bevers said.

In an analysis of 71 herds in eastern Texas and the Panhandle completing the SPA program since 2003, the largest cost for cow-calf producers is purchased feed. Feed averaged $80.38 per breeding female or about 14.5 percent of total operating expenses in 2007. This includes supplements, forages and minerals purchased. The cost is influenced considerably by high corn prices, he said.

Corn’s price is viewed much differently from cow-calf producers than by corn farmers in the Midwest. While many cow-calf producers blame ethanol and its boom for higher prices, other factors affect feed prices, said Steve Amosson, professor and extension economist with Texas AgriLife Extension.

“Ethanol seems to get all the headlines of why we have higher prices but oil prices, exchange rates and speculative funds all also have an effect on increased feed costs,” Amosson said.

Oil prices are by far the No. 1 problem that faces all of agriculture, he said. To the cattlemen, ethanol represents a thorn in their side. But what could be ethanol’s saving grace, at least to the cattle industry, is distillers grain. With more corn going to ethanol production, there will be more distillers grain for the cattle industry. Other livestock feeding enterprises, such as hogs and poultry, cannot use the product as readily as cattle feeders.

“Distillers grain is a positive part of the game for cattlemen,” Amosson said.

COLLEGE STATION, TX (DTN) – Even though the cattle industry continues to round up good prices for cattle, Steve and Morita Schoeneberg of Louise, TX, wrestle with higher input costs in their operation.

The Schoenebergs operate a 600-head cattle ranch on about 1,800 acres along the Texas Gulf Coast, southwest of Houston. While they grow most of their own forage, they feel the effects of high fuel and fertilizer prices.

“More and more with the cost of everything, I feel we are just spinning our wheels,” said Morita, who attended the 54th annual Texas A&M University Beef Short Course while her husband stayed home to work the ranch.

The Schoenebergs feel the effects of the three Fs – feed, fuel and fertilizer – as Texas cattle ranchers deal with lower profit margins despite higher cattle prices.

That theme was repeated several times during the beef course held on the central Texas campus Aug. 4-6.

According to the Standardized Performance Analysis (SPA), a program administered by Texas A&M to examine the financial health of ranches, the total cost to maintain each female in a herd in 2007 was $590.33, and the 2007 cost per hundredweight of weaned calves was $116.90. Stan Bevers, professor and extension economist for Texas A&M based in Vernon, TX, said costs accelerated since 2002, and he believes costs will rise more in 2008.

“You look at the increasing costs of inputs over the last six months or so, especially if you look at corn prices, and we most likely will have over $600 costs per cow for 2008,” Bevers said.

In an analysis of 71 herds in eastern Texas and the Panhandle completing the SPA program since 2003, the largest cost for cow-calf producers is purchased feed. Feed averaged $80.38 per breeding female or about 14.5 percent of total operating expenses in 2007. This includes supplements, forages and minerals purchased. The cost is influenced considerably by high corn prices, he said.

Corn’s price is viewed much differently from cow-calf producers than by corn farmers in the Midwest. While many cow-calf producers blame ethanol and its boom for higher prices, other factors affect feed prices, said Steve Amosson, professor and extension economist with Texas AgriLife Extension.

“Ethanol seems to get all the headlines of why we have higher prices but oil prices, exchange rates and speculative funds all also have an effect on increased feed costs,” Amosson said.

Oil prices are by far the No. 1 problem that faces all of agriculture, he said. To the cattlemen, ethanol represents a thorn in their side. But what could be ethanol’s saving grace, at least to the cattle industry, is distillers grain. With more corn going to ethanol production, there will be more distillers grain for the cattle industry. Other livestock feeding enterprises, such as hogs and poultry, cannot use the product as readily as cattle feeders.

“Distillers grain is a positive part of the game for cattlemen,” Amosson said.

COLLEGE STATION, TX (DTN) – Even though the cattle industry continues to round up good prices for cattle, Steve and Morita Schoeneberg of Louise, TX, wrestle with higher input costs in their operation.

The Schoenebergs operate a 600-head cattle ranch on about 1,800 acres along the Texas Gulf Coast, southwest of Houston. While they grow most of their own forage, they feel the effects of high fuel and fertilizer prices.

“More and more with the cost of everything, I feel we are just spinning our wheels,” said Morita, who attended the 54th annual Texas A&M University Beef Short Course while her husband stayed home to work the ranch.

The Schoenebergs feel the effects of the three Fs – feed, fuel and fertilizer – as Texas cattle ranchers deal with lower profit margins despite higher cattle prices.

That theme was repeated several times during the beef course held on the central Texas campus Aug. 4-6.

According to the Standardized Performance Analysis (SPA), a program administered by Texas A&M to examine the financial health of ranches, the total cost to maintain each female in a herd in 2007 was $590.33, and the 2007 cost per hundredweight of weaned calves was $116.90. Stan Bevers, professor and extension economist for Texas A&M based in Vernon, TX, said costs accelerated since 2002, and he believes costs will rise more in 2008.

“You look at the increasing costs of inputs over the last six months or so, especially if you look at corn prices, and we most likely will have over $600 costs per cow for 2008,” Bevers said.

In an analysis of 71 herds in eastern Texas and the Panhandle completing the SPA program since 2003, the largest cost for cow-calf producers is purchased feed. Feed averaged $80.38 per breeding female or about 14.5 percent of total operating expenses in 2007. This includes supplements, forages and minerals purchased. The cost is influenced considerably by high corn prices, he said.

Corn’s price is viewed much differently from cow-calf producers than by corn farmers in the Midwest. While many cow-calf producers blame ethanol and its boom for higher prices, other factors affect feed prices, said Steve Amosson, professor and extension economist with Texas AgriLife Extension.

“Ethanol seems to get all the headlines of why we have higher prices but oil prices, exchange rates and speculative funds all also have an effect on increased feed costs,” Amosson said.

Oil prices are by far the No. 1 problem that faces all of agriculture, he said. To the cattlemen, ethanol represents a thorn in their side. But what could be ethanol’s saving grace, at least to the cattle industry, is distillers grain. With more corn going to ethanol production, there will be more distillers grain for the cattle industry. Other livestock feeding enterprises, such as hogs and poultry, cannot use the product as readily as cattle feeders.

“Distillers grain is a positive part of the game for cattlemen,” Amosson said.

russ quinn can be reached at russ.quinn@dtn.com

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