Ag News -
Regional Ag News
Wednesday, 26 December 2012 14:29
By Adam Hurlburt
Black Hills Pioneer
NORTHERN HILLS, S.D. - Pray for rain — that's liable to be the last line in every rancher's holiday letter this year.
An oppressive lack of moisture across the American West has made ranching anything but simple this year. The drought contributed to a severe lack of hay and other feed sources. And prices reflected that with hay going for as much as 75 percent more than the year before. As a result, ranchers sold off livestock in the summer and fall as there simply wasn't enough feed to keep them on through the winter. And the rain — even the snow — still hasn't fallen.
Now we're looking at a cattle shortage. It's nothing catastrophic, but Brett Loughlin, a veteran field man at the Belle Fourche Livestock Exchange, said prices are roughly 30 to 40 percent higher there than this time last year.
"Our prices have been up, it's holding better. Our cow numbers are lower than they've been in years. Our beef demand and our exports are awful good. The cattle industry, for the most part, is pretty decent. Around this area it's drought reasons," he said. "That's the main reason that most of the cattle are in town. There's a tremendous amount of feed shortage in the country and they're (ranchers) liquidating herds. Anything that isn't in the production — that's going to produce a product this spring like a bred cow, or something, that's pretty much coming in to town (to be sold at auction)."
Loughlin added that feeder cattle prices at the Belle Fourche sale barn are up roughly $10 to $20-per-hundred pounds higher than they've been in the past few years.
Justin Tepper, manager of the St. Onge Livestock Auction, said he's seen similar prices at his operation. He chalks the price surge up to pure supply and demand.
"One of the reasons that beef trade in general is better is that our export market is extremely good, so exporting more beef has trickled down to better cattle markets. And due to the droughts down south a year ago and the drought now up here cattle numbers are at extreme lows," he said. "Cattle numbers, to me, are just going to be low and I think as we go forward we're going to see a better market to come, too, just through supply and demand."
Tepper added that when prices are higher expenses are usually higher as well. Devin Stephans, a rancher who sold some cattle at the St. Onge sale barn last week, echoed Tepper's statements.
"Prices are high but compared to expenses it's not a windfall by any stretch of the imagination," he said. "We sold some today that we normally would've held on to, but it would've cost too much to carry them on 'til spring."
Things aren't exactly status quo for ranchers in South Dakota right now, but they're manageable. If the drought continues into next year, however, ranching will turn into a very tough business.
"One year of drought, everybody can kind of maneuver around and make different decisions to make it happen, but the second year becomes very difficult," Tepper said. "We grazed off a lot of the old grass this year and got by, going into next year there's no carryover grass left anywhere, so that can be really tough," he said.
Loughlin said things will get very serious in the area if the drought continues, and that ranchers will likely have to ship stock to areas that have feed, which could be many hundreds of miles away.
"We're seeing that right now in the bred cow sales. We're selling bred cattle — there's not a lot that are staying locally, they're going to where there's feed," he said.
But Loughlin is trying to stay optimistic, just like the majority of ranchers in the region.
"In this area if we would happen to get some moisture this winter and this coming spring, I think we could see all-time highs (prices) in the bred cattle, and also in feeder cattle, and steers and heifers to go to grass this spring," he said.