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A well of optimism in the driest of droughts

Progressive Cattleman Editor David Cooper Published on 01 September 2011

Spend a few days in the blistering Texas sun during the state’s worst drought in generations, and you learn something vital about the beef industry.

The summer of 2011 may be winding down, but for many producers in the Southwest, this has been a scorcher that’s stuck around too long.

The heart of Texas typically gets around 36 to 37 inches of rain a year – this year it’s received less than 8. The state saw the hottest month of June on record and the driest 12-month stretch through July.

As a result, the nation’s leading beef cattle state is seeing waves of producers cull their herds down to alarmingly low rates. Economic losses in ag now total $5.2 billion.

The fact that cows and calves are selling so high in today’s low-supply market offers some relief. But not a great deal of it.

“We’ve had huge runs at local auction markets,” explained David Anderson, an AgriLife Extension livestock economist at Texas A&M, “with full dispersal sales over the last six weeks in particular. Essentially our fall run of calves is already done.

“We’ve had auctions tell people not to bring more cattle; just don’t bring them. There’s just not enough capacity at the markets to handle them.”

Adding more insult to injury is how the global market is more inviting than ever for producers in the U.S. The ongoing supply shortage from a national decline in the beef herd would normally play into the hands of any savvy producer.

But with little to no forage, grass or hay on the ground or within buying distance, many producers are using what’s available to get out of the cattle business.

Rebuilding the herd in a period of high gas prices, high feed prices and tight capital at the bank is a heavy burden for many cattlemen at this stage – and it won’t get easier.

To explain that, CattleFax economist Brett Stuart told attendees at the Texas A&M Beef Cattle Short Course in August that even if herd rebuilding were to take place immediately – and it’s not going to happen in 2011 – the results wouldn’t show up on consumers’ plates until early 2015.

Yet even with such long odds – optimism can be found. Producers tend to follow a gut instinct that tells them to stick it out.

Because as bad as a record drought may be right now for certain producers, the thought of not being in the cattle business is even worse.

No cattle producer has ever been guaranteed high profits, green grass, cheap feed and fat calves. But they do have a guarantee that hard work and patience do reap certain rewards, and that persistence is about to pay off.

Or as they say, every day of record heat is another day closer to rain.

This isn’t to say one area has the monopoly on motivation – but it shows just what it takes to keep producing the world’s most demanded beef products.

Whether you’re a producer that’s held off drought, floods, tornadoes or wildfires, today’s progressive cattleman probably has an optimism that the rest of the nation can follow.  end_mark



David Cooper