Feed costs, including pasture lease, are the biggest expense in raising cattle. The problem facing many producers is that lease rates don’t adjust as quickly as market prices do, leaving them with thin margins, in the red, or forced to de-stock when cattle prices drop. 

Market fluctuations have become more of an issue in recent years, since cash rental rates paid by cow-calf and stocker producers have trended up over the last 15 years. The University of Nebraska-Lincoln Department of Agricultural Economics has been tracking rental rates annually since 1981, on a price per cow-calf pair per month. 

According to Jim Jansen, agricultural economist, Department of Agricultural Economics, University of Nebraska, a cow-calf pair is typically considered 1.25 to 1.30 animal units (an animal unit being a 1,000 lb. animal). However, this can vary depending on weight of cow and age of calf. On average across Agricultural Statistics Districts in Nebraska, the rental rate for one month of summer grazing is $57.64 per cow-calf pair. Using a herd of 300 cow-calf pairs as an example, and a 5-month grazing season, total pasture costs would conservatively be $86,460 not including mineral supplements or additional feed. 

One problem with pasture rental rates is that they are relatively fixed within a given year and have trended upward over time. This benefits the landlord, providing a steady stream of income, but is detrimental to the cattle producer whose income varies with cattle market cycles and weather conditions.  

Creating flexible grazing leases is one alternative becoming more popular among producers and landlords. In these agreements, cow-calf pair per month rental rates are allowed to flex within a predetermined range, conditional on one or more market factors that may include animal performance, market conditions, and/or grazing land productivity. 

“Flexible cash leases in the crop industry tend to focus on elements of risk like crop yields, crop price or a combination of the two. On grazing land we generally don’t have a way to measure yield or a direct price for grass. The elements of risk, and the price associated with leasing the property must be related to the animals grazing it,” said Jansen. 

If you are a cow-calf producer and concerned about calf prices in the fall, you are interested in what that calf is worth in the spring versus what it brings in the fall. 

Another example might be calf weight. “In our area people typically haul cattle to pasture and transport cows and calves separately for safety. They could weigh calves before they go on grass, and weigh them after they are taken off the grass. A person might have some historical benchmark for typical rate of gain. This could be considered the ‘yield’ on the property,” said Jansen. 

Another concern might be rainfall. If you know the typical rainfall in the area, this might be helpful, but this is a little harder to measure. 

There needs to be a determination regarding what is typical for the area, whether rainfall, rate of gain, cattle prices, etc. “A person needs a base expectation, though we may not know what is typical in terms of prices. In the spring, if you look at futures markets, however, you might get a sense of what is typical, to build a flex lease,” he explains. 

“One example is looking at percentage of change. When you put calves out on pasture in May, you look at the futures price. Let’s say feeder cattle futures indicate calves will be worth $150 a hundredweight when you take them off grass in October or November to sell. Come fall, we sell the calves and maybe the price is not $150. Maybe it ends up being $165. That’s 10 percent higher than we anticipated,” Jansen said. 

“In Nebraska a common pasture lease would be $250 per pair for 5 months grazing. In some western states this might be $200 per pair for 5 months. If your calf prices are 10 percent higher than what you predicted, you’d end up adding another 10 percent (or $20) to the final cash rent—so you’d pay $220 per pair,” he says. 

If prices in the fall are not as good we hoped, the cash rent would drop. “Let’s say calf price drops from $150 to $135 (10 percent lower—or $15 per hundredweight less). Deducting 10 percent off of $200, the final rent price would be $180,” he said. 

“As part of a true flex-lease we need a ceiling and a floor to have a maximum and minimum. The landowner would not want to rent pasture if there’s a chance of getting zero dollars for some reason, and the stockman might not want to rent if the price of pasture goes up too much. The lease needs to protect both parties, so you establish a range.” If the base cash rent per pair is $200, maybe you’d put the maximum at $230 and minimum at $170.  

If you are concerned about number of days you can graze, this could be another variable. In some situations—including drought—the grazing season may be shorter than average. “Let’s say the per-pair rate is $200 for 5 months (150 days) and you end up only grazing 120 days, or 80 percent of what you’d hoped for. You would discount the cash rent. And if you graze longer than 150 days, you would increase the cash rent to reflect the proportion of time,” Jansen said.  

There are two strategies for dealing with drought. “You might run the same number of cattle you typically do, but cut the time period. Or you can reduce the number of cattle and still graze the typical length of time,” said Jansen. In a flexible lease, a seasonal rate could be converted to a daily rate; the cattle producer only pays for the actual number of grazing days. 

Rate of gain is a little trickier adjustment. “People who keep good records might have some of that information. Basically it just comes down to whatever the two parties agree upon,” he said. 

Elliott Dennis, assistant professor, Livestock Marketing, Department of Agricultural Economics (University of Nebraska-Lincoln) says some of the risks are insurable, to mitigate some of the risks for the producer. “We are essentially paying someone to take on that risk for us; it’s not that the risk has disappeared; someone else has assumed the risk,” he said. 

“Basically we are passing the risk to someone else. A classic example would be if you have a mortgage on a home, you would buy home insurance. The bank transfers the potential of losing the asset to the insurance company and they guarantee that if your home gets destroyed the payout would go to the bank,” he explains. 

“With livestock products, we are generally looking at futures and options. In this case it would be livestock risk protection, which essentially sets a floor price. If people are flexing on the feeder cattle index, if there’s a 7 percent decline in that index, the producer would pay 7 percent less in grazing lease fee. The benefit is that we can make up some of that 7 percent by receiving indemnity payments,” Dennis said. 

“In down years we pay less because we have less money coming in, with the low markets. We don’t want periods where we have high costs and low income. That’s the nice thing about flexing it on our revenue rather than on our costs.”  

A benefit of linking rental rates to market conditions is that most of these market risks are insurable. The grazing season may be unpredictable, but there are opportunities to lock in profits for producers who are watching the markets and have a good idea about their cost of gain. Looking long-term, some producers may benefit from establishing flexible grazing leases tied to market conditions that are insurable with a market-based product such as CME (Chicago Mercantile Exchange) futures options, USDA LRP (Livestock Risk Protection), or other pasture and rainfall insurances offered from USDA. The tenant could use the USDA-RMA (Risk Management Agency) subsidized Livestock Risk Protection product on the day cattle are placed on grass to insure against a drop in price. 

“One of the benefits for the person renting pasture is that he/she can defer some of those higher costs until a later day when they have more income. The benefit for the landlord is that it helps ensure having a long-term renter who won’t go out of business. Renting pasture tends to be location-specific; there are usually a limited number of people who could potentially rent that land,” Dennis said. If you have a good renter you’d probably prefer to stick with that person even if some years you get less income. 

The two parties can decide what the limits would be—with a floor and ceiling; the pasture rental rate can’t go above or below specific amounts. “This is helpful for both parties—cost control for the livestock producer and income protection for the landlord.” 

Communication beforehand is important. “The rental agreement always starts with a conversation. There are benefits for both the landlord and the person renting the pasture, but they need to start that conversation to see the possibilities and what they want to agree upon that would be satisfactory to both parties,” he said. 

It’s her wedding ring Jessie Halverson regrets about the aftermath of the fire that burned their house.

On March 6, 2021, Jessie and her husband James were fixing a well about half a mile from the house. Earlier in the day they’d gotten a call from family, asking if they were in the path of the fire that came across the scanner.

They thought the answer was no.

But when they got done fixing the well and came out of the canyon, they could see black smoke from the direction of their house.

“My husband and I raced home. We were starting to see flames coming up out of the canyon probably 300 yards west of our house. My husband got the kids, who were playing in the shop, while I went in the house, and started grabbing what I could think of.”

But when you’re in that situation, there’s not much you can think of, Jessie said.

“I’d thought of this process before. Fire is a reality.”

But in that moment, she grabbed the computers and hard drives, knowing she couldn’t replace the family photos. She grabbed her purse. After James got the kids–ages 13, 11 and 8 at the time–in the vehicle, he came in and grabbed guns and guitars.

“The wind was blowing so hard, it was hard to know how the fire was going to respond.”

James and Jessie were opening gates for livestock, and could see the smoke from their place. It wasn’t a surprise when Jessie got a call from a good friend, whose husband was a volunteer firefighter, telling Jessie, through tears, that their house was gone.

“My response was ‘it’s okay, it’s just stuff.’ I was so grateful to have my family, and nothing else mattered at that point in time.”

And she still feels that way. But she’s learned that some stuff does matter. Like her wedding ring, and her grandmother’s candy dish, the gun her dad built for her and the wrenches that wore calluses on her grandfather’s hands.

It’s been over a year since the Halversons learned they’d never walk through the door of their house again, but in many ways, they’re still sifting through the rubble.

Finding things of value

When the Fish Fire started last week, about 8 miles from their house, it all came billowing back.

The anxiety, the need to be better prepared, the fear that their family would have to go through–for a second time–something they never thought they’d go through once.

But the fire was contained, and the Halversons took the opportunity to sift through what they’ve learned. Jessie said she’s trying to figure out a snarl in their renters’ insurance. They owned the home that burned, and after a year, they had the insurance straightened out, but they aren’t ready to rebuild. So they’re renting from a neighbor, and just found out there’s an insurance map that won’t allow their company to offer renters’ insurance within a certain distance of a forest–like the Black Hills.

Jessie has a box of all the things that are irreplaceable–a much smaller box than it would have been before March 6, 2021–in the camper, ready to pull out of the yard in minutes.

Having been through the process, she knows to make lists of everything of value or importance, and to make sure the insurance company knows of everything on that list. Halversons learned the hard way that the insurance company has categories of items for replacement, like guns and jewelry. Each of those categories has a cap, if they aren’t itemized. She thinks they got $2,500 for all the guns that were lost, and similar for the jewelry.

Jessie recommends making another list, of the things that are most important, that you can grab in a minute, and taping it to the inside of a cupboard door, or a drawer, and making sure the whole family knows where it is.

Others who have been through fires have noted that not all “fireproof” safes, or gun safes are fireproof. Fires–especially housefires–can get hotter than many commercially-available safes can stand, so it’s best to take those items, or the whole safe, with you when you can.

Jessie stresses the importance of having an insurance agent you can ask questions of, and who will work for you and with you to keep your coverage current and adequate. Many people don’t adjust their coverage as they add value to their home or personal property, and the insurance agents don’t know to make those adjustments. Once a year, maybe when you’re changing smoke detector batteries, it’s a good idea to check on your list of personal property and update it, and submit it to your insurance agent. Most additions will cost a few dollars, if anything, but can make a difference when you’re trying to rebuild your life.

Jessie also stresses the importance of taking pictures of everything in your house and shop, including opening closets, cabinet doors and drawers.

“It’s a huge undertaking,” to try to make that list after a fire. It would be more manageable before a fire, but you always think it won’t happen to you, Jessie said.

Jessie has been keeping a spreadsheet as they get life back to normal, and she said it’s a struggle to even keep a year’s worth of possessions updated.

She also kept a notebook of all her “official” conversations in the months after the fire. “It’s such a brain buster,” Jessie said of all the paperwork and phone calls and meetings. She still has the notebook with dates and details. “It’s hard to remember everything.”

It’s easy to get caught up in regrets, but Jessie tries not to linger there. The one major regret she has is not waiting longer to remove the rubble of the house. It stood for more than a month after the fire, and they went through it to salvage what they could. Her two oldest boys wanted to go through it to see if they could find any “treasures”–belt buckles, toy tractors. There weren’t many. Her daughter, who was 8 at the time, didn’t want to go back. James and Jessie let the kids decide for themselves.

The one treasure Jessie wanted most to find was her wedding ring. They found James’s. Jessie’s was in a shot glass. She doesn’t know if the glass melted around it, or if the glass would have broken, or where the ring may have ended up in the chaos of a house fire. She wishes she would have asked someone if it would have melted completely, if it was worth looking harder for.

But at the end of the day, “It’s just stuff.” Her family is okay, and life carried on, with the kids in school, James at work and Jessie dedicating months to the details and paperwork of setting them up to rebuild.

But it still makes her sad that her grandmother’s glass candy dish, the one that was always filled with lemon drops, won’t be part of that new home. The gun her dad built for her won’t be passed down to another generation. The wrenches from her grandfather may have been buried in ash, but now they’re in a landfill.

“You have to remind yourself it was just stuff, but it’s okay to feel that loss. You have to go through that process,” Jessie said.  

How to help

Having good friends, the kind who come get your cows and feed them the day your place burns, or who take your kids to somewhere they feel safe, with people who love them, so you can take care of the immediate issues, or who bring you suppers for weeks, helps ease that loss.

“Those friends who jumped in without asking, and wouldn’t take no for an answer. It was hard to accept at the time–both James and I struggle with asking for, or accepting help–but I’m grateful for it now. But those friends who just come in and take control relieve so much burden.”

The other thing Jessie encourages when you’re not the one dealing with a loss, and you’re trying to be helpful, is to put yourself in that person’s situation. Regardless of the loss, they’re dealing with logistics, and lots of concerned friends and family, and their own grief. While everyone’s intentions are good, asking repeatedly what you can do to help, or making repeated attempts at contacting them, is sometimes more of a burden.

But at the same time, Jessie said one friend just checked in every day, and gave her a disinterested third party to vent to, so it all depends on relationships and reading the situation with empathy.

Halversons’ friends and family created a GoFundMe account, and hosted a benefit in Sundance. People James knew through his job at the South Dakota Stockgrowers Association donated a steer for a rollover auction. “We appreciated all of that so much. It was a tremendous help to get back on our feet,” Jessie said.

It wasn’t easy, but the experience drew them closer to each other as a family, and they learned to rely even more heavily on God. “I don’t know what we would have done without our faith,” Jessie said. “I often wonder how anyone gets through life without God.”

And last year, on her birthday, a little over a year after their fire, James gave Jessie a new wedding ring.

Some circles do go unbroken.

This past year was challenging for many cattle producers, due to lack of rainfall and subsequent feed shortages. Some cows came through winter in poor condition. This spring will be tough for many producers and require some hard decisions. “Early weaning (maybe extremely early) will probably be more of a consideration this year, as well as doing the math on maintaining cows by sending them to a feedlot or renting pasture in an area not affected by drought, versus selling part of the herd,” says Janna Block, livestock systems specialist, Hettinger Research Extension Center, North Dakota State University.

Every ranch is a different in terms of feed resources. Some producers may have a couple years’ hay in reserve but others don’t have anything left after winter feeding. “Many people overgrazed last year because feed was short,” Block says. “Those pastures may be slow recovering. The next 2 months will be crucial for rainfall, especially in the northern Great Plains. We desperately need precipitation in April and May because the majority of forage growth is done by June.”

“People should be looking at the drought monitors and outlooks; there are many tools to help us evaluate what our forage production might be, based on rainfall and local conditions. We know that nutrient requirements dramatically increase for lactating cows, and peak lactation occurs about 60 days after calving. This will be their highest point of requirements for the year,” she explains.

Forage & Nutrition

If there is decent forage growth and quality, lactating cows can get by fine on pasture, but this year pastures may not be as good as hoped. “Some people are looking at a later turnout date, which means feeding cows longer. It usually depends on what their calving time is, when those cows will reach peak lactation, and what their feed resources are,” says Block.

We also have to think about breeding season. “Requirements for lactation, body maintenance and growth always have higher priority than reproduction and if cows don’t have adequate nutrition to cover these priorities and start cycling, they won’t rebreed in a timely manner,” she says.

Take a good look at your forage production, in terms of quality and quantity, to determine if you need to use a supplement. Perhaps the supply is adequate, but we don’t know the nutrient levels. This might be a year to test forages. “It’s hard to accurately sample and test standing forages, but it provides valuable information when choosing the best type of supplement. If forage is green, it is higher quality than if it is mature and dry. If there’s a lot of old growth in the pasture (not much new growth, but adequate forage available), the cows might benefit from a protein supplement,” Block says.

“If there isn’t an adequate supply of forage, we need to supplement with some type of energy—either harvested forages or a fiber-based energy supplement like a by-product feed. This could be wheat midds or other fiber-based energy feeds that won’t interfere with fiber digestion. Assess pasture health and decide whether to supplement the cows out on pasture or move them to a dry-lot situation.” This might be at home, or sending the cows somewhere else.

“Even if you are supplementing–substituting for a portion of what would have been grazed forage–if the cows are on the pasture they have an impact on that pasture. There’s not much forage cover right now on many pastures,” she says. It might be best to move the cows off so they don’t keep negatively impacting it, and maybe the forage plants will have more chance to recover.

“We might turn out later, but this is a hard choice because many people only have low-quality forages to feed them—and hay is expensive right now. So is grain. Often in a drought we say limit-feeding might be a good option because concentrates have a higher energy value, but this isn’t going to be cheap.”

The problem in many regions is that this is not the first year of drought. “Most people can make it through one year but the second or third year can be more difficult if there isn’t any hay to put up. Using purchased feeds will put some producers in an impossible situation.” Some people are looking at culling hard, selling some cows, and trying to purchase enough feed for the rest of the herd.

Others might consider moving cows out of state, to a region not affected by drought—if they can find pasture to rent. “There are many questions that go with that decision. Check references and make sure the people who will be taking care of the cattle are reputable, and check into health situations and requirements involved in shipping cows out of state,” says Block.

Early Weaning

Another option to consider is early weaning. Some folks wean calves early from first-calf heifers so they can regain lost body condition and not come up open, or help them go into winter in better flesh, with greater chance to have a healthy calf next year and rebreed again on schedule. “Removing the lactation requirement from thin young cows makes it easier for them to meet their requirements for growth and be in better body condition before breeding,” says Block.

This year, however, some folks may early-wean all their calves. “Even though most people want the calves to be at least 3 to 4 months old at weaning, a person can do it even earlier,” she says. You need to plan ahead and have your facilities set up for younger, smaller calves, so they can reach the waterer and eat from a bunk.

“There are some complete feeds formulated for young weaned calves, and we often recommend starting with those and building a ration from there. Calves perform very well when early-weaned, if they have access to high-quality feeds and are managed correctly,” she says.

Early weaning can save on forage; dry cows won’t need as much forage and this might allow producers to cull fewer cows. A person needs to pencil it out, to see what will work. Early weaning will require more labor and possibly some change in facilities.

With early-weaned calves there are a variety of marketing options; they can be sold whenever the market is best. They are already weaned and ready to go. “They can go to grass somewhere, or to a feedlot if they get to what a normal weaning weight would be,” says Block.

Talking to people who have done this before can be helpful. “We have a video available through NDSU Extension in which we interviewed producers who used early weaning in various situations. The goal of this video was to glean tips from producers who have done it, and learn from them.” They tell other producers what works for them or some of the things that have gone wrong and what to avoid—things they might do differently next time. We can always learn from other people’s experiences and misadventures, and maybe avoid some mistakes in our own efforts.

Water

Water is another consideration on a dry year. “This year we’ve already seen some water quality issues. This was a huge issue last summer. Many of the dams and ponds have not recharged. Water supplies are low, and contain more dissolved solids. If you had bad water last summer and fall, you likely have bad water now. Before you turn out, check the water. Most Extension offices have test strips and you can do some initial screening, to look at sulfates and TDS (total dissolved solids) and nitrate levels. If there are some red flags, we can send samples to a lab for more extensive testing,” she says.

“In drought years people often try to develop alternative water sources. There were challenges last summer with not enough labor available to get wells drilled. There are funds available to help with these projects but there were so many people interested in doing this that the programs were overwhelmed,” she says.It is important to plan ahead, and create alternative or additional water sources before getting into a drought.

When we think about forage availability and trying to remove lactation demands on the cows, there are many ways to reduce a cow’s maintenance requirements. “This might mean looking at how far the cows must travel to water. Is there a way we can reduce that? Is there shade available? All these things play a role, by letting those animals utilize available nutrients a little more efficiently.” We want to help the cows get by in hot weather and challenging conditions this summer.

People often think about the cows first, rather than the pasture or range health. “We need to keep in mind the impact on pasture and rangelands,” says Block. After several years of drought, we may have abused them and they will take longer to recover.

“We need pasture available for the future, or we won’t be in business. We must keep in mind how every decision we make will impact long-term production of pastures and range. If people haven’t determined what stocking rates should be in reduced forage situations, now would be a great time to talk to your NRCS professionals or Extension resources, on how to calculate forage production and determine stocking rate and capacity. We know that in many cases it will be reduced, but we need to know how much. Knowing what that resource is and what it might be, and monitoring carefully, will help us get the best results,” she says.

Each year, cow-calf producers have a percentage of cows that are culled from the herd for various reasons. They may have been open at pregnancy check time, lost a calf, have reached a normal culling age, or faced drought conditions that forced an earlier or increased culling rate. No matter the reason for culling, it is important to evaluate the opportunity to add value to these females at marketing, as they can equate to 15-30% of the annual ranch income.

Considering the normal price cycle for cull cows, the seasonal low typically occurs in November as a result of increased numbers of spring-calving cows flooding the market following weaning and pregnancy check. The seasonal high typically occurs in July, but increases are also seen in early spring (April-May), providing the opportunity to market the cows during a different time point and capture additional value by feeding these cows for a period of 30 to 90 days after weaning.

Costs and Benefits of Feeding

There are both costs and benefits associated with feeding cows, and it is important to evaluate your individual situation to determine whether it is feasible for your operation. Some of the questions to consideration are: Do I have the pen or pasture space to manage these cows? What feed resources can I allocate to this group? Will feeding equipment be available? Do I have the time and labor resources to feed this group of cattle? Those are just a few things to think about. The potential benefits of feeding cows include three main factors: additional weight gain, which can translate into more pounds to sell; improved body condition score (BCS) and slaughter grade, which would add value; and seasonal price increase coupled with the other two factors, which could further increase value.

Additional weight gain will vary based on multiple factors, specifically what condition the cows are in at the beginning of the feeding phase. Take time to evaluate each animal and determine whether they are healthy, with sound feet and legs, and in good condition. If they are not healthy, it is better to sell her rather than risk her dying during the feeding phase. Only healthy cows should be fed. Cows in a BCS of <6 will gain more weight faster than their more-heavily conditioned counterparts at BCS 7 or 8. The type of diet these cows are fed will also play a role in how fast they gain condition and will influence cost.

–SDSU Extension

Governor Noem Signs Executive Order to Increase Flexibility in Hay Hauling, following North Dakota’s similar efforts

South Dakota On September 15, 2021, Governor Kristi Noem signed Executive Order 2021-13, which extends the timeframe that hay haulers may move hay to 2 hours before sunrise and 2 hours after sunset.

As drought conditions continue to negatively impact feed availability for livestock across South Dakota, this order will increase access to hay for farmers and ranchers. Under statute, hay haulers are typically only allowed to move hay a half-hour before sunrise and a half-hour after sunset.

The order applies to oversize hay haulers who have a permit. These haulers must be properly equipped with warning lights, and they cannot run overweight.

Resources are available to producers in need of hay. South Dakota State University helps producers get connected to suppliers, and you can learn more about that here.

North Dakota

Gov. Doug Burgum on Aug. 9, 2021, signed an executive order waiving hours of service restrictions for drivers of commercial vehicles transporting hay, water and livestock to help livestock producers battling extreme drought conditions across North Dakota.

Drought conditions continue to worsen across North Dakota, with the latest U.S. Drought Monitor rating 14% of North Dakota in exceptional drought, 46% in extreme drought, 38% in severe drought and 2% in moderate drought. The National Weather Service predicts drought will persist through August and into the fall.

The order, issued in consultation with state Agriculture Commissioner Doug Goehring, will remain in effect for 30 days. All road safety and vehicle compliance regulations still apply. The executive order serves as a permit and must be carried in vehicles operating under the hours of service waiver. A copy of the order can be found on the Governor’s Office website here.

Montana

On July 10, Governor Gianforte issued an executive order to permit a number of activities to help mitigate drought impacts for farmers and ranchers.

Several notable aspects to the executive order include:

Executive Order 11-2021 directs the Departments of Agriculture, Livestock, and Natural Resources and Conservation to provide maximum assistance to the U.S. Department of Agriculture on drought-related activities to secure timely economic assistance from the federal government.

It also suspends regulations for motor carriers and persons operating commercial vehicles while they provide direct drought-related support.

•In accordance with 61-10-111, MCA and other applicable statutes, applicable farm vehicles in Montana are exempt from the 20 percent limits of 61-10-144(3), MCA, and aauthorize the operation of vehicles on non-interstate highways is authorized without incurring excess weight penalties under 61-10-145, MCA, if the total gross weight of the combination, each axle, or axle group does not exceed allowable weight limitations by more than 30 percent.

•In accordance with 61-10-111, MCA and other applicable statutes, applicable vehicles in Montana are exempt from the 10 percent limits of 61-10-144(2), MCA and the operation of vehicles on non-interstate highways is authorized without incurring excess weight penalties under 61-10-145, MCA, if the total gross weight of the combination, each axle, or axle group does not exceed allowable weight limitations by more than 20 percent.

–State of South Dakota, State of North Dakota, State of Montana

Sens. Tina Smith, D-Minn., and John Thune, R-S.D., on Wednesday introduced bipartisan legislation to allow future emergency haying on federal Conservation Reserve Program (CRP) land.

Currently, emergency haying on CRP land is not allowed until after the primary nesting season, which ends August 1 in Minnesota, South Dakota and North Dakota. The senators’ CRP Flexibility Act would give USDA the tools to allow emergency haying on CRP acres before August 1 when certain conditions are met and in consultation with the state conservation experts.

Reps. Angie Craig, D-Minn., and Dusty Johnson, R-S.D., introduced a House companion bill previously.

“Right now, over 70% of Minnesota is experiencing a severe drought, and it’s quickly worsening with the current hot weather,” said Smith. “This is devastating for our cattle producers, who are running out of hay to feed their herds. When severe droughts hit, the USDA should have the tools to allow farmers to access reserve land for haying. This will lessen the impact on the farm economy.”

–The Hagstrom Report

Western legislators led by Reps. Suzan DelBene, D-Wash., and Dan Newhouse, R-Wash., wrote to Agriculture Secretary Tom Vilsack on Tuesday, urging USDA to provide additional relief to farmers and ranchers impacted by historic drought.

The letter also encourages USDA to work with Congress to provide technical assistance as lawmakers craft additional authorities and appropriations to address the 2020 and 2021 seasons that include wildfire, drought, and excessive heat-related losses.

“Although the extent of damages relating to the extreme heat has yet to be fully determined, agricultural producers expect these impacts to be severe,” the lawmakers wrote. “We respectfully request USDA explore all potential flexibilities for additional relief within existing programs and identify other options to deliver federal relief to producers in our states so they have the resources to overcome the extreme drought and heat crisis.”

–The Hagstrom Report

After hail, flooding, a severe drought and a depressed market – all within months – Mike Kertzman says his days of ranching might be numbered.

“I live in hail alley, I’m used to tough weather, I get it all,” he said. A 10-inch rain and numerous rounds of hail stressed his corn this spring. But ironically the biggest stressor he’s dealing with is drought on his rented pasture just 25 miles away.

He puts up hay and plants corn for silage on his home place, near Hazelton, North Dakota which is about 50 miles south east of Bismark. He pastures his cattle on rented ground 25 miles to the south and 25 miles to the west. Much of his alfalfa was killed by the flooding, and the low-lying hayfield is covered with cornstalks and other material he said, but he is putting up the available grass for hay.

Trying to preserve his grass and keep his cattle in good shape, Kertzman sold his younger cows with calves at side before turnout.

“I sold about 200 pairs. We dried up last summer, so our pastures were pretty bad to begin with. I didn’t want to overload everything. I started off selling all my replacements,” he said. Then, soon, he hauled his 2-6 year old cows as pairs. The market was tough, in large part because the drought is so wide-spread. “This drought is so wide and has hit so big of an area, that’s the worst,” he said.

“I sold them all. I took a devastating hit. I don’t think I’ll ever recover from this one, this will be the end of it,” he said, fearing that he won’t be able to afford to buy cows when the rain comes.

“I’m already financially hurting from the pressure of years with high prices, and then all of the sudden, prices went way down.”

Kertzman bought cows in 2014 when the market was high, hoping to capitalize on what many experts predicted would be a multi-year run of strong cattle prices. “There was talk that the market was supposed to hang in there for a while. I was doing fine, everything was working, then all of the sudden the market fell out from under us, and there you are. You can’t do this stuff without equipment. I run pretty hard, it’s just me, I do a lot of all day and all night work, I need good equipment.”

With less hay than usual, and limited and expensive hay availability on the market, the future looks tough, he said.

“Who knows what’s going to happen. I don’t think there will be enough feed. What do we do next year? If we don’t get a bunch of snow or rain or something, there ain’t going to be grass next year either. Basically, we’re in a two year drought right now,” Kertzman said.

McHenry County, North Dakota, in the north central part of the state, is considered to be in “exceptional drought,” the worst drought rating.

A representative for the USDA Farm Service Agency in that county said some of their producers have signed up for the Livestock Forage Disaster Program, which is only available to producers in a qualifying drought area. The program is intended to provide assistance to producers whose grass or other forage is significantly reduced due to drought. The payment depends upon the severity and length of the drought as reported by USDA.

Rick Bostyan, the Vice President of First State Bank of Beach and Golva, North Dakota, which are on the far west side of the state, said he hopes ranchers take advantage of that USDA program. He also fears some ranchers who have sold significant numbers of cows won’t be able to buy back in anytime soon.

“Things are tight already. The sad thing is, some of these producers, they were borrowing money from the time they sold their last calf crop. There are going to be some hard decisions made as far as what you will spend to keep your cattle on your place,” he said.

“Where we’re sitting right now, we’re very, very dry. No one believes the pastures are going to last long enough to get the calves to weaning, a lot of them are making plans now to either wean early to hopefully get some pressure off the cows.

“As far as culling cows, they’ve done some already but I think we’ll see an increased cull rate once the calves are off, too,” he said.

Buying enough hay to winter cows, without selling down to reduce numbers, might be risky, he said, but he hopes to see some government assistance so that ranchers can buy enough hay to at least keep their foundation herds intact.

As for government price support for the cattle being sold, he fears a program like that could be difficult to administer fairly.

“By the time it (hay) is shipped out here, it’s going to be well over $200 per ton and I don’t think most of the ranches can support that kind of price. It would help if we got assistance like we got a few years ago where they covered trucking for this hay,” he said, referencing a state program spearheaded by the Secretary of Agriculture, Doug Goehring. He also said a boost to the existing Livestock Forage Disaster Program under FSA could be helpful. “If they could possibly increase that amount, I think that would be a fairer way to do it,” he said.

Independent Beef Association of North Dakota President Kerry Dockter said he would like to see some additional assistance for producers buying more feed than usual, and he stressed the need for the assistance to come quickly.

He mentioned that some ranchers are asking neighboring farmers if they can put up droughted out wheat for hay. “That wheat is starting to turn, soon there is going to be nothing but straw and there is very little in the heads. There is a short window of time to get it up,” he said.

“The point is if they are going to make it available, they need to make it available fast,” he said.

Dockter said, with feed assistance, maybe more producers could secure the hay needed to hold onto the nucleus of their cowherds.

Perhaps through the infrastructure support bill being discussed in Congress, financial help should be offered to ranchers selling cows, he said. “Maybe make something available as strictly cow-calf producers that they will be able to get funding to get back into the business and hopefully the business will be profitable like it’s supposed to be.” Dockter said some kind of price support for those ranchers who sold cows this spring, or will sell producing (not cull) cows this fall could prop them up so they are in a position to buy cows back when they get moisture. One idea would be for the federal government to kick in the difference between the actual price of the cow, and profitable price. If it is determined that pairs should have been worth $2,100 this spring, and a producer sold pairs for $1,200, he or she would get the price difference in the form of a federal subsidy.

Because the cattle market has been strained for several years, a long-term solution to the market woes would help take pressure off producers, said Dockter.

“At the national level, we’re trying to limit packer concentration and allow feeders and producers to capture some of that profit that is stuck on the packers’ side,” he said, referencing packer profit margins of over $1,000 per head for the past several months.

“You spend a lifetime working on a herd that works for you in your geographical location and that you’re proud of. You can’t build that back in a couple years’ time,” said Dockter.

Kertzman echoed the challenges of tough markets.

“As long as they let the packers do what they want, this price is never going to get better,” he said.

“It’s legalized crime. The anti-competitive pricing. They (elected officials) aren’t doing anything about it. They don’t think they need us (ranchers.) They need grain farmers, that is where this country’s main borrowing power is,” Kertzman said.

“For what they are paying us for our cattle, beef should be affordable, people should be eating beef every day.”

Kertzman has been involved in value-added programs to capture the worth of his calves, and he has retained ownership on his steers, finishing them through a Kansas feeder, but still, the low market combined with the drought has strained him to a breaking point.

“It takes too many years to rebound when you have a bad ond in the cattle industry,” he said.

“Just pay us for what we do. I just want a fair price. I don’t want government help, I’m not a big fan of that stuff,” Kertzman said. “Why do we take a 25- 30 percent increase in groceries or parts and we’re taking a 25-30 percent decrease in the product we sell? That’s not right.”

“Basically, all I have left is my older cows, my foundation herd,” Kertzman said.

“It’s not the bank’s fault, it’s just the way it is. I thank God that I had an awesome bank to work with. They are awesome, they tried to help, but nothing worked. That’s the worst thing, nothing worked,” said Kertzman.

Bostyan reminds producers that the drought is no fault of theirs. “I’m a rancher myself. I tell our producers, This is something that isn’t their fault. It’s not a management issue, it’s weather. We don’t have to fine tune their management, just give them some options and decide what works best for them.”

“We’re just to the edge of this, we’ll see in another month, if a lot of cattle are going to market,” he said. •

BISMARCK – The North Dakota State Board of Animal Health granted a summer grazing exemption at their recent board meeting due to the widespread drought in North Dakota.

The exemption reads as follows:

Cattle are allowed to move out of state for grazing to another state of destination with an Interstate Certificate of Veterinary Inspection (ICVI), with official identifications (IDs) listed on the ICVI and a statement on the ICVI that the cattle will not be comingled with other out of state cattle and will return to North Dakota after the summer.

To return to North Dakota, a new ICVI is needed, and the original ICVI number must be referenced as well, which included the head count and individual official IDs.

The state of destination’s import requirements must be met. All brand inspection requirements must also be met.

The exemption will help producers avoid having to make their cattle go through the chute and have the tags read prior to returning, when not comingled and out of state for summer grazing. To return to North Dakota, a new certificate is needed but cattle do not need to be individually handled to read ID. Concerns or questions should be directed to the North Dakota Department of Agriculture’s Animal Health Division at 701-328-2655.

–North Dakota Department of Agriculture

BISMARCK, N.D. – Agriculture Commissioner Doug Goehring has requested the early release of emergency haying on acres enrolled in all Conservation Reserve Program (CRP) contract types from United States Department of Agriculture Secretary Tom Vilsack due to the drought. No response has been received.

Emergency haying on acres enrolled in CRP typically does not open until after Primary Nesting Season (PNS) ends. North Dakota’s PNS ends Aug. 1, while Montana’s ends July 15, which is why some confusion has arisen due to Montana producers being able to conduct emergency haying.

“We have been receiving daily calls asking about the early release of emergency haying on CRP lands. I have requested that USDA allow emergency haying on CRP lands enrolled in all contract types starting as soon as possible to maintain some of the nutritional quality of the hay that is harvested,” Goehring said. “In order for our livestock producers to make it through this disaster, it is necessary to marshal every available resource.”

Goehring has also been exploring options for a program to assist eligible producers with feed transportation expenses.

–ND Secretary of Agriculture