A Few Thoughts by John Nalivka: The foundation of the cattle industry – grass

The last 90 days have been a definite reminder of how quickly conditions in the cattle industry can change and remind us that while record-high cattle prices can generate optimism for cattlemen, the outlook is still largely driven by grazing. While their financial well-being is a function of the market, it is also a function of the availability of grass. Both define the cattle cycle. Furthermore, grazing is critical for rangeland health.

For cattlemen losing a large share of their grazing capacity as the result of wildfires or drought, the rosiest outlook generated by record-high prices can quickly become one of uncertainty. Western states ranchers dependent on federal lands grazing (BLM and Forest Service), will not just feel the impact of a season of severe wildfires in 2024, but beyond, as restoration of these rangelands could last a period of 4 to 5 years. Obviously, that period does not include grazing. Record-high prices or otherwise, this is a significant challenge – to say the least. While there was an immediate need for grazing or hay to replace the loss, that loss of grazing capacity must be replaced over the longer term – 2025 and beyond – particularly if it represented a large share of the ranch’s total grazing. Furthermore, it has been expressed that Federal grazing on selected allotments could be sharply reduced or discontinued on selected allotments following the wildfires. I believe this to be a strong possibility.

Beyond the wildfires in the West, the industry is also faced with serious drought conditions across both the West and the Midwest. This situation ranges from a continuation of the problem in selected areas to one that is just beginning in other areas and these drought conditions are one factor leading to wildfires. There are cattlemen who have already liquidated part of their herd or their entire herd. For others, that decision may still be yet to come. The situation poses the same challenge as that of wildfires – replacing forage. The drought situation can still improve over the next several months with good winter and spring moisture conditions. That is not the situation on federal grazing lands or private lands grazing where wildfire occurred. The cards have been laid on the table and range restoration will include spraying for weeds, seeding, and plant establishment.

I am expressing the conditions related to grazing capacity following this summer’s wildfires and the drought situation to really bring to the forefront the importance of grazing to the cattle industry and rangeland health and its impact on the outlook for the cattle numbers going forward. Record-high prices are certainly a crucial factor in the assessing the direction of the industry, but grass is still the priority for the individual cattleman and the outlook for the cattle inventory.