Beef Cow Strategies Under Drought Conditions

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Beef Cow Strategies Under Drought Conditions
Tim Petry Livestock Economist July 2002
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2002 should be 200 too dry wet
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Should Cattle Producers Try To Maintain A Base
Cow Herd?

• price outlook?
• your retirement plans?
• low equity vs high equity?
• talk to your lender
• disaster assistance?

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• The highest cattle prices usually occur during
  the accumulation (rebuilding) phase of the
  inventory cycle.
• When that occurs will depend on weather, but
  should be in the next several years.

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USDAForecasts
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Strategies

• Control 2002 Beef cow-calf enterprise budget
  based on normal weather
• Alternative 1 Graze small grain crops, hayland,
  and/or CRP on or near the ranch
• Alternative 2 Haul cows and calves to leased
  pasture in non-drought area
• Alternative 3 Drylot cows and calves with
  purchased feed
• Alternative 4 Sell cow-calf pairs in July, buy
  bred cows or cow-calf pairs next year

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Spreadsheet Address

• www.ag.ndsu.nodak.edu/aginfo/lsmkt/livestock.htm
• Click on Cow-Calf Drought Management Spreadsheet

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Alternatives 1, 2, and 3 will all require higher
winter feed costs. Assumption winter feed costs
will increase 50 over control. 65
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Alternative 1Graze small grain crops, hayland
CRP

• 65 increased winter feed
• 15 for 1 ½ months CRP (July 15 August 31)
• Temporary fencing available1/cow

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Alternative 2Haul cattle to leased pasture

• may be difficult to find
• 200 mi one way
• 90 cow-calf pairs19 replacements
• 3 potloads, 2.75/loaded mi
• 10/Acre pasture lease

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Alternative 3Drylot cows and calves with
purchased feed

• Traditional ration used
• Alternative rations should be considered
• 45/T prairie hay
• 65/T mixed alfalfa-grass
• 1.55/bu barley

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Alternative 4Sell cow-calf pairs, buy back next
year

• very difficult to quantify because estimates must
  be made for
• price of the cow-calf pairs when sold
• price of bred cows next spring(or pairs next
  summer)
• cost savings for no cattle from July 15 March
  15 (June 15)
• potential availability of bred cows with a
  similar age, quality, and genetic base is very
  questionable

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SF-LS755 Sioux Falls, SD Mon Jul 8, 2002
USDA-SD Ag Market News Faith
Livestock Commission Company, Faith, SD This
week 2117 Last week 2262 Year ago
No sale Spring calves, steers and heifers,
Medium and Large 1, per head 160-193 lbs
205.00-230.00, 206-244 lbs 220.00-300.00, 256-300
lbs 280.00-350.00, 306-360 lbs 300.00-355.00. Cow
/calf pairs Medium and Large 1, per pair First
calf heifers, red, 1391 lbs 1000.00, Second calf
heifers, red, 1510 lbs 950.00, 4-6 yr olds, bwf,
1256 lbs 920.00, 5-6 yr old, bwf, 1650 lbs
925.00, Short solids, mixed color, 1497-1653 lbs,
760.00-860.00, Short solids, bwf, few, 1825 lbs,
910.00, Short solid broken 1485 lbs 690.00.
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• sell cow-calf pairs now
• buy bred cows and heifers Mar
• 100 buy/sell margin
• Reduce winter feed for 4 months
• Reduce other variable costs by about 50

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Summary

• disaster relief dilemma
• feeder cattle production will be profitable for
  several years
• choices are extremely difficult
• determine what your alternatives are
• discuss alternatives with your lender
• hope that it rains
• how can we help?