September 26, 2012
In their mid-year report, USDA NASS (National Agricultural Statistics Service) showed all cattle and calves in the U.S. were lower by 2.2 percent compared to a year ago. In an Aug. 17, report, USDA NASS found cattle on feed on Aug. 1, 2012 to be one percent higher than a year prior at 10.7 million head. But, what specifically is happening with the western cowherd in response to the dry year and record high feed prices?
Torrington Livestock Market and Cattle Country Video co-owner and auctioneer Lex Madden said all cattle are being moved between 20 and 60 days early this year, and that his barn is running roughly 40 percent ahead of where they were a year ago.
"In mid to late August we rarely sell any calves, and there are 500 consigned for this week's sale. On Labor Day we typically average 300-400 calves, and we're already expecting 1,200 this year," he explained. "We've also started on exposed heifers 30-60 days early. There haven't been many large runs of bred heifers and I think people are trying to hold on to those as long as they can to recapture a better price or because they're setting in winter feed for them."
Madden noted that when producers start cutting back numbers, their open and old cows go first. They're typically followed by replacement heifers that were going to be bred and short-term cows. From there, ranchers will start into their older pairs and cut down on the overall age of their cowherd.
"While we've primarily seen early calves and yearling heifers to this point, we have sold some complete dispersions for people who couldn't hold on any longer," said Madden.
Belle Fourche Livestock Exchange owner Dean Strong said his barn is also seeing more calves than normal in addition to the early signs of producers trimming their herds back.
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"A lot of people have already taken off their older pairs, or the young pairs that didn't raise a very good calf. That's usually where they start, and where we're at," he explained.
Strong continued, saying that fall calf run is also expected to be two to four weeks early at his barn, and that yearlings have seen a lot of movement the last six weeks and will continue to move for another three to four weeks.
"After they get the calves off, and if we do get some fall moisture or people can find some hay, my prediction is they will keep a good share of their cows. Every situation is different, and in our area the rain's we've had are awful spotted. One place might get three inches and be in good shape, and those on either side may get a tenth," said Strong, adding that, 60 miles north of Belle Fourche, recent rains have really helped a number of producers.
Early weaning, preg-checking and cull-cow marketing are also key strategies Nebraska ranchers are using this fall in order to keep their mother cow herds intact according to Nebraska Cattlemen Vice President of Member Services Melody Benjamin.
"People realize they are likely going to give something up by weaning this year's calf crop early, but overall they are striving to keep their mother cows. A lot of these early weaned calves are also being directly placed in feedlots. Cost of gain is going to be a little high this year, but it is what it is, especially since there is essentially no grass," explained Benjamin of the situation in western Nebraska.
A poor hay crop is also playing a key role in Benjamin's area, and she said producers range from having sufficient hay left over from past years to being in a situation where they need to purchase all their winter feed.
"We also don't have the corn production in western Nebraska that the eastern side of our state sees, but what we do have is being chopped and that will also impact fall grazing for some producers," she noted.
Madden explained that another key issue in 2012 is the influx of southern cattle the region received as a result of the 2011 drought in Texas, Oklahoma, New Mexico and parts of Kansas.
"Last year we had a fantastic year in this region, and if you look at the numbers, the cow slaughter rate did not increase as a result of the southern drought. Those cattle were just moved to a different location; north and west. Now there is nowhere to go with those cattle, and from what I've read the USDA is predicting a noticeable increase in cow slaughter numbers. Plus, those cattle either ate the hay surplus up north, or it was shipped south to them last year, which has resulted in a limited amount of carryover hay in our area," he commented. Strong added that in addition to a reduced hay crop and minimal percentage of old hay, the current status of the corn crop will also be a key factor going forward.
"A lot of corn is being cut for silage, and you can't fatten cattle on just silage. They need regular corn for that. The fat cattle market is going to be tough on the cost of gain side. But, the other side of that is silage is a soft feed that can be utilized in other ways and may create some options for people," he stated.
"I think if a rancher can survive this deal, in two to five years he will see unsurpassed demand for his product. There is still excellent demand for our beef products worldwide, and that will continue because we have the safest and best product in the world. I think people realize that, and are attempting to make it work if possible in their situation," Madden concluded.
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