Thu August 2, 2012
Bad Weather is Forcing Kentucky Livestock Producers to Make Tough Decisions on Sales
The drought that has impacted so many parts of region is also presenting major challenges to livestock producers. The lack of corn crop this year has led to higher feed prices for cattle, and that is forcing livestock producers into a difficult decision: do they sell their cattle now at a loss, or hold on to those animals in hopes of getting better prices down the road?
It's a situation playing out in places like the Farmer's Livestock Market in Barren County, where auctions are held Monday afternoons.
Several hundred livestock owners and buyers from throughout southern and central Kentucky were present recently, sitting in stadium-style seating, as cattle were brought out one at a time through a double-door entrance. The animals are paraded around an elevated booth where two workers sit. One is the auctioneer, and the other helps point out those who have placed bets on the livestock.
The whole process lasts no longer than 30 seconds, usually. A winning bid is placed, and the animal is shooed through a double-door exit on the other side of the auctioneer’s booth. One farmer in attendance on this day told WKU Public Radio these auctions usually go from 2pm to 11pm.
These auctions are part of the nitty-gritty of getting things like hamburgers, steaks, and milk on to our dinner tables. And for many livestock producers in our region, the drought that decimated this year’s corn crop is presenting a dilemma on what to do about cattle sales
“We’ve moved several cattle much earlier than normal. You just run out of pasture, and the feed costs are really too high to get them fed,” said J.J. Childers, who runs an 800 acre farm in Larue County.
The lack of rainfall and extreme heat devastated the corn crop that should be going to market now. Much of that corn would have ended up in cattle feed. This means feed costs have skyrocketed, placing a major financial strain on livestock producers, like Childers.
“The feed cost sometimes gets to $125 a ton for some of these mixed rations. Now it’s around $240, and some are thinking it might get as high as $300. So, you’re looking at over twice the cost of production,” said Childers.
Those higher costs led Childers to conclude it was in his best interest to sell his cattle earlier than usual, in order to avoid paying high feed prices over the next few months.
That’s something Mike Bullock has seen a lot of lately. Bullock is an agriculture instructional specialist with Bowling Green Technical College. He spends much of his time speaking with farmers about the quality and quantity of their crop yields and livestock production.
Bullock says the glut of livestock going on the market recently has caused an overall decline in the number of heads of cattle being raised by producers.
“Right now, nationwide, I think the beef numbers are the lowest they’ve been since the 1950s. And you also have to look at what the population and the needs were in 1950 versus what the population is today,” said Bullock.
So what does this mean for consumers? Bullock believes in the short-term, the high volume of cattle on the market could cause beef prices at the grocery store to drop a bit, or at least stabilize.
But by next spring, the opposite will happen.
There will likely be fewer cattle on the market, and that should lead to higher prices for lovers of burgers and sirloin steaks.
It should be pointed that not all cattle producers are selling early. A few producers who spoke to WKU Public Radio at the recent cattle auction in Barren County said they were willing to roll the dice and hold on to their animals in the hopes that prices will rebound later.
All of this fluctuation and uncertainty is a lot to take in for those of us who don’t pay much attention to agriculture on any given day. But many of the farmers in our region say the drought and high cost of animal feed is part of an up-and-down cycle they live with.
Barren County livestock producer and farmer Bill Chase says he remains optimistic. Besides, he says—if it wasn’t for the drought, corn farmers would have cashed in this year because of the record-high prices on commodities markets.
“You know, it’ll be another 14, 15 months down the road before another corn crop gets made. But after that, it’ll probably be better than ever,” said Chase.
Chase and other farmers in the region have their fingers crossed that next year will bring better news than 2012.
Impact of Drought