Good attendance at livestock drought restoration conferences highlights the devasting impacts the extreme warmth and lack of rainfall are having on our rural communities. Cattlemen and ladies all over the place are trying to find options to feed their herds, clinging to the livelihood they’ve spent a lifetime creating.
I helped train at quite a few these conferences throughout Missouri. It appears all over the place farmers are questioning if the present scenario can be a repeat of 2012-14, when prolonged years of drought shrunk the meat cow herd so small that when the climate lastly improved, cattle costs took off like a rocket to information by no means believed attainable.
May that occur once more, they ask. And in that case, how do they maintain on within the meantime?
Earnings attainable
You don’t need to look very far on the web to seek out loads of articles discussing the huge quantities of beef cows going to slaughter this yr. As well as, the share of heifers within the feedlot continues to run exceptionally excessive. That is partially as a result of drought, but in addition as a result of cow-calf profitability has not been ok to encourage heifer retention for a number of years now.
In order producers proceed to unload the manufacturing manufacturing unit, earlier than lengthy, we might certainly discover ourselves with a nationwide beef cow herd as little as it was in 2014, when the final cattle cycle ended and we started rebuilding the herd. Does this imply document costs and income are simply over the horizon?
First, all the time understand life has only a few ensures. Whereas USDA forecasts are indicating increased cattle costs forward, there are all the time dangers. World politics threaten exports, and a attainable recession right here at dwelling might have an effect on customers’ shopping for energy.
However much more essential than these, understand increased costs don’t all the time imply increased income.
Give attention to enter prices
All through my profession with MU Extension, I’ve been by means of a number of rounds of drought conferences. However I have to let you know this time feels extra sophisticated.
Drought normally causes the worth of hay and a few feed substances to rise. Typically the change is non permanent; generally it lasts for prolonged durations of time. However as we seek for artistic feeding choices in 2022, can we discover any enter that has not drastically elevated in worth for the reason that starting of the pandemic?
Changing $100-per-bale hay with distillers isn’t as useful because it as soon as was now that they value $325 per ton. Increased priced seed, fertilizer, diesel gas and gear prices make winter annuals or stockpiled forages dearer than the previous. Don’t get me began on land costs or the price of labor.
Discovering that artistic feeding resolution appears tougher this yr. However much more scary than that’s what does this imply for subsequent yr’s value of manufacturing? Does anybody consider our enter prices will miraculously return right down to earlier ranges? Can somebody look into their crystal ball and inform me how we resolve our inflation drawback?
Weigh choices
This brings me again to my authentic query: Ought to I feed by means of the drought or promote cows now?
I consider each operation has particular person cows or teams that, if faraway from the feed invoice, will enhance the general productiveness of the herd. Use this time to do away with decrease producers.
A bonus this yr in comparison with earlier droughts is slaughter cow costs are a lot increased than regular. This permits us to generate additional cash by culling. Preg-check, early wean, and type into teams primarily based on feed wants to enhance feeding effectivity. Put money into infrastructure that makes you extra environment friendly and lowers your value of manufacturing.
However for a way aggressive do you have to dig into promoting productive cows, as a lot as I hate to make use of the normal economist reply, the truth is, “It relies upon.” The reply can be completely different for each operation. Within the absence of some unexpected black swan affecting the market, decrease cattle numbers will result in increased costs sooner or later.
My concern is that for some operations these increased costs is probably not sufficient to beat the elevated prices. The extra dependent your operation is on a lot of iron, diesel gas, fertilizer and different inputs, I’d advocate being extra aggressive in culling now.
The much less of these inputs your operation requires, I could be prepared to spend a little bit extra this winter to carry onto additional cows if I consider my margins are going to be extremely worthwhile sooner or later.
However for everybody, use this time to get your own home so as, and put together your self for the right way to cope with sustained increased prices sooner or later. That’s how we defend our legacy going ahead.
Tucker is a College of Missouri Extension ag enterprise specialist and succession planner. He could be reached at [email protected] or 417-326-4916.
