Drought’s Impact on Texas Livestock Producers

13 Oct Drought’s Impact on Texas Livestock Producers

October 13, 2012
By: San Angelo Standard Times; Steve Sturtz, San Angelo Standard-Times (Texas)

SAN ANGELO, Texas – The 2011 drought and wildfires, 2012 sporadic weather, high feed prices and higher than usual livestock markets have livestock producers facing many decisions.

While the drought has created hardship for farmers across the spectrum, it’s more difficult to find a silver lining if you’re a livestock producer. Crop insurance doesn’t help livestock producers, and the high corn prices will only make it more expensive for producers to feed or supplement their herds.

This is the second consecutive year drought has slammed the livestock industry. We battled witheringly dry conditions last year, sparking trends in the beef industry that have carried over into 2012’s drought.

U.S. beef cow slaughter totals surged in 2011, driven in part by drought-stricken producers in the Southwest liquidating or reducing their herds. Beef cow slaughter in 2012 generally has tracked below the 2011 totals and has more closely resembled the averages taken between 2006 and 2010, according to the U.S. Department of Agriculture National Agriculture Statistics Service. However, slaughter numbers for beef and dairy cows jumped to a total of more than 132,000 during the third week of July, overtaking the 2011 total for the same week by 3.6 percent and the average slaughter figures from 2006-10 by 17.5 percent.

In general, experts would caution against another widespread reduction of livestock before it becomes clear what sort of grain yields farmers will get this year. In most cases it will be better to ride it out until corn can be harvested. If yields are better than expected, feed prices may drop. It’s probably best to hold off making big changes before we know what the yields will look like. An untimely reaction that puts even more animals on the market could make things worse.

Farmers looking to Washington, D.C., for help have gotten decidedly mixed results. The U.S. Department of Agriculture has provided some relief by allowing farmers to use conservation land and some wetlands for grazing and pasture. However, Congress failed to pass a comprehensive Farm Bill before adjourning for a weeks-long August recess while the programs governed by the current farm bill are set to expire in September. Additionally, the U.S. Senate adjourned without taking action on legislation approved by the House of Representatives that would resurrect expired programs aimed at providing emergency relief to livestock producers.

For now, livestock producers are stuck with uncertainty. As the drought persists, they don’t know how this year’s crop yields will impact feed prices or if Congress will take action on key agricultural programs that will impact their operations. I definitely encourage livestock producers to lock in those feed prices well in advance.

This year is a perfect example of how important it is for producers to take advantage of risk management strategies. As feed prices rise, producers are doing the math and figuring that it makes more sense to reduce their herds in many cases. This trend emerged during the 2011 drought, and we’re seeing it manifest in other ways this year.

According to statistics, this year’s more widespread drought has had a greater impact on Midwestern dairy states, and the resulting higher feed prices have pushed producers to cull more dairy cows than in previous years. More than 60,000 dairy cows were slaughtered in the third week of July 2012, a 22.3 percent increase over the same week in 2011. Concho Valley livestock producers are going to have to make decisions on a place-by-place basis over the next few years. Rangeland is much different from one place to another in the Concho Valley, and there is not a cookie-cutter approach for managing rangeland and livestock.

Depending on severity of drought, wildfire, timeliness of rain, brush control, feed resources, species of livestock, plant communities and marketing options, each parcel of land has many options to consider.

Texas A&M AgriLife Extension Service Tom Green County will be holding a workshop that will help producers with many of the decisions they are facing. It will be held Oct. 24 from 1:30 to 5 p.m. at Producers Livestock Auction. Speakers and Industry experts will talk about brush and rangeland management during and following drought and wildfires, supplemental feeding options, restocking options for livestock producers and update on livestockmarkets.