May 19, 2013

Ranchers: Rebuild of herds months away

The Flint Hills looked startlingly green last week. Many of the ponds were full. Black cattle wandered the range, grazing peacefully.

The Flint Hills looked startlingly green last week. Many of the ponds were full. Black cattle wandered the range, grazing peacefully.

All was well.

But that is a pretty hard-fought condition, said rancher Dallas Korte as he looked over his herd among the rolling hills of southeast Butler County.

He’s had to deal with thinner grass and higher feed costs. He’s had to truck in water. And he trimmed his herd by 30 to 40 percent by selling off older and problem cows.

Korte and ranchers across the state welcomed the spring rains, if they got them, but say any recovery is still fragile. They are months, if not a year or more, away from starting to rebuild herds.

And the degree of optimism varies with the degrees of longitude.

Eastern and central Kansas ranchers have seen substantial rains and, so far, are feeling some optimism as farm ponds fill and grass thickens. Western Kansas ranchers are still deep in the grips of the drought and remain wary.

A lot will depend on summer moisture in Kansas and across the country. Average or more rain in June, July and August will produce bountiful hay and corn harvests, leading to lower expenditures for animal feed. If the rains don’t come, there may a further shrinkage of the Kansas cattle herd.

“For right now, they are maintaining the herd they have and if the rains continue and they continue to see grass grow, they will maintain the herds,” said Scarlett Hagins, communications program manager for the Kansas Livestock Association. “In the drier areas, they may have to start making harder decisions. They have made the easy culls. We are going into our second or third year of drought.”

Stay off the grass

Ranchers cut herds to reduce the strain on their most important resource: their grass.

Ranchers have to think longer term. Cattle are on a three-plus year cycle. Sell a healthy cow today, and it will take at least three years to raise its replacement to where it can produce calves. And ranchers may spend years, even decades, improving the genetics of their stock through generations of cattle.

So ranchers are used to planning beyond one year for their livelihood, including the health of their pasturage. That’s why, they said, that even if rains are plentiful, they would give their pastures a summer or a year to recover before they restocked their herds to pre-drought levels.

This spring there was very little burning on the Flint Hills, Korte said. Ranchers worried the grass was so dry the flames would take off. Korte said he also avoided burning to keep the year-old dead grass as mulch to hold in as much ground moisture as possible.

According to the U.S. Department of Agriculture, as of May 1, Kansas hay stocks were down 29 percent from 2012 and the lowest they have been since 1957.

In western Kansas, pastures are an even more critical state.

David Cross ranches in Edwards, Kiowa and Comanche counties, south and east of Dodge City.

Last summer, he weaned his calves early and sold off 25 percent of his herd. As it continued dry last fall and winter, he sold off more.

Rains in western Kansas were still short this spring, but for now he feels comfortable with the size of herd and believes that the grass can heal itself.

“I absolutely don’t like where I am,” Cross said with a laugh. “It’s going to be alright, but it’s a character-builder.”

The ripple

The impact of the drought on the beef production chain goes on and on.

The total number of cattle on Kansas farms and ranches, as of Jan. 1, was down 4 percent from 2012.

Following a surge in cows and calves sent to slaughter in the summer and fall, the number has dropped way off. The number of calves on ranches as of Jan. 1 – those that were kept after the first culling in the summer and fall of 2012 – was the lowest number since 1938.

A few feedlots and even a slaughter plant have closed in recent months because supplies are so much lower.

Short supply usually means high prices.

Derrell Peel, livestock marketing specialist at Oklahoma State University, said he expects prices for feeder cattle generally to stay high, even as some cow-calf producers are selling out. The margins for feedlots will remain “horrible,” he said.

The price of fed cattle is at near record levels, and while it may see a little seasonal drop in the summer, he expects the price to hit new highs in the fall.

“I have some optimism on prices, but in terms of profitability, that’s another story,” Peel said, because of the high costs of feed.

Daniel Mushrush owns an operation near Strong City that raises registered bulls and bred cows. He sells to ranchers seeking to improve bloodlines.

He expects a boom when ranchers in Texas, Colorado, Oklahoma, Kansas, Nebraska and Missouri decide it’s time to rebuild their herds quickly by buying pregnant cows. Many of those ranchers aren’t going to want to wait three years; they will want to accelerate the process.

But, Mushrush said, he isn’t hearing from those ranchers, yet. That tells him that they’re being cautious and conservative.

That means he also has to be conservative, although he did buy some additional stock this spring.

“We hedged our bets; I guess you could say we jumped in with one foot,” he said. “But when the rains finally come, we want to be holding cattle.”

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