Missouri cattle farmers brace for fallout from drought

Monday, August 20, 2012 | 6:00 a.m. CDT; updated 10:49 p.m. CDT, Wednesday, August 22, 2012
The drought has had a detrimental effect on Brian Lease and other Missouri cattle farmers.

CLARK — Brian Lease always wanted to be a cowboy.

“I got into the rodeos and started working on big ranches out West, but my wife and I moved back here so I could get to staking my own land.”

That was 32 years ago. Now, Lease has 220 head of cattle on more than 400 acres just north of Boone County and owns Central Missouri Feed and Supply.

Lease said he’s lived through droughts before but never one like this.

“The temperatures were higher during the drought that hit in the 1980s, but it rained eventually,” Lease said. “There’s no sign of that happening any time soon right now.”

With no rain and input costs such as forage and grains on the rise, many cow-calf producers in the state are sustaining serious financial losses and being forced to slaughter their cows.

“We’re in one of the worst situations for cattle producers we’ve ever seen,” said Scott Brown, research assistant professor in the MU College of Agriculture, Food and Natural Resources. “This is of record proportions, and Missouri is ground zero.”

Because of the drought’s effect on livestock, analysts forecast an 8 percent increase in the retail price of meat, dairy and poultry that will likely begin in the middle of next year, Brown said.

According to the USDA, 99 percent of pasture conditions in the state were in “poor or very poor conditions.”

Input costs

Sami Jo Freeman, director of communications for the Missouri Cattlemen's Association, said that it’s the input costs and price of cattle that drive prices up for consumers.

“Cattle eat forage and grains, and we need water for those to grow,” Freeman said. “Right now, it’s also too hot for mother cows to be bred, because their bodies are focused on surviving the drought.”

Hay prices are also on the rise.

“I’ve seen round bales of hay for $75,” Lease said. “Before the drought, you could get it for $35. With extreme input costs, it just makes everything more expensive.”

Hay production was also 30 to 50 percent less than a normal year, Lease said.

Freeman said that many farmers simply can’t afford to feed their cattle with the current price of feedstuff.

Cattle farmers “are asking themselves if they could stay in this game and do what they love to do,” Freeman said. “Lifetime producers are sticking in it, but I think the newer guys are having the toughest time.”

Lease said his feed costs are about 40 to 45 percent higher than they were a few months ago. “A lot of my customers, including me, are using corn gluten pellets — a protein that enhances whatever forage the cows are being fed.”

The beef market

Because of the high costs of hay and other feedstuffs, many farmers are beginning to slaughter their brood stock to cut losses — a strategy Brown likens to a double-edged sword.

While selling might afford some short-term relief, killing their breeding inventories would leave farmers with fewer cattle in the spring.

Don Mayse, owner of Show Me Farms near Columbia, said he's down to feeding his cattle hay left over from last year.

"Sending cattle to slaughter is not the answer for me,” Mayse said. "When you sell your brood stock, you can’t produce the same amount of offspring as the year before.”

"Cow-calf producers are having to sell their spring calving cows a lot sooner than they would normally to sustain forage supplies,” Freeman said. “It’s a combination of the corn crop being very low but also the loss of forage."

According to the USDA, 20,922 cattle were sold during the week of Aug. 3 in Missouri. This time last year, it was 10,609.

The price of cattle has also dropped from highs in early spring, Lease said.

“Last year, a heifer would have been around $2,000, but you couldn’t get $1,300 at the auction,” Lease said.

“A lot of farmers have to be prepared for situations like these,” Lease said. “You have to ride it like a business, and you need to have a real understanding banker.”

From farm to table

Brown said that consumers won’t see any immediate difference in meat prices, even with the increased number of cattle being slaughtered.

“Consumers shouldn’t expect to see any noticeable difference in meat prices until the middle of 2013,” Brown said. “There’s still a lot of uncertainty. This year’s corn crop also isn’t in the bin, so we don’t exactly know what the harvest will look like yet.”

Brown believes some farmers are going to leave the industry. “It’s a tough decision for some folks to make," he said, "but it’s also hard not to have been affected by this point."

Lease hasn’t quite reached that point yet, but he’s prepared for the worst.

“If I don’t have enough big round bales of hay to get the cows through the winter, then I’ll have to liquidate around 30 cows,” Lease said. “Those 30 cows are my factory.”

Supervising editor is John Schneller. 

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