We have been keeping a close watch on the dry conditions blanketing the western U.S. The dire situation is pushing feed costs higher and forcing ranchers to cull herds, driving up cattle slaughter.
Drought conditions in the west continue to challenge livestock producers.
Larry Schnell, current president of Livestock Marketing Association, says that the last decent rain in North Dakota was eleven inches back in September 2019, which helped farmers produce forage during drought conditions last year.
According to Schnell, “This year, it’s all gone. Haying that is going on-- a lot of people are not even cutting it but if they are cutting it at all, they’re talking about one bale per acre, some of them less than that. We’re talking about acres per bale. Other feed sources, there’s more corn around here than there used to be, but the nitrates are very high. Same story with wheat and other grains, so it’s a very dire situation.”
Jason Johnson runs Producers Livestock Marketing in Vale, Oregon. He says that farmers who cannot produce or buy enough forage are getting out of the business.
“One thing I’m really noticing a lot of is the smaller operators with the cost of these commodities, where price of hay is going and just a total lack of outside forage,” Johnson states. “A lot of these guys are just getting out, and a lot of them have a job in town a little bit, and the funs kind of gone out of the agriculture thing.”
Those increasing sales translate into higher cattle slaughter, according to John Nalivka of Sterling Marketing.
“Our beef cow slaughter this year, we’re right now, year to date, we’re up 9 percent over a year ago, and that compares to the same time last year when we were up 4 percent last year over the previous year. So, we’ve been above a year ago and, you know, I think the thing that’s striking is our cow slaughter now is we’re above that 2010-13 average when we went into that significant liquidation when we have drought in the Midwest,” Nalivka explains.
USDA’s July Cattle Inventory report put all cattle and calves at 101 million head, down 1 percent from this time last year, Nalivka expects it to continue to fall.
“I think we’ll end up with this year’s calf crop, I think it’ll be down about 1 percent from 2020 calf crop, and so going into the next year with fewer numbers and keep these weights down, and assuming demand hold steady... the outlook is for pretty good year next year on prices,” he adds.
In addition to the drought, western states have endured almost 17,000 large fires so far this year, which have scored nearly 2.5 million acres of land.
Related:
R-CALF on the two main problems facing cattle industry
“Unheard of Drought": Dry conditions leading to some culling herd