OKLAHOMA CITY – Entire herds of cattle in Oklahoma and Texas are being sold prematurely because high temperatures, drought and fire have destroyed pastures, and inflation has driven up prices for hay and diesel.
Thus, the outlook for Oklahoma cattle ranchers is bleak but not utterly hopeless, officials contacted recently by Southwest Ledger indicated.
Sales of cattle have “picked up,” Ben Hale, owner of Western Livestock Commission Co. in Oklahoma City and of the Comanche Livestock Auction in Stephens County, told the Ledger on Aug. 4.
“We’re selling a little more than normal” at Comanche, where approximately 1,500 head were sold on Aug. 3, he said.
In addition, Hale said he had “big runs” at his livestock auction in the Oklahoma City Stockyards: 9,500 head sold on Aug. 1, compared to approximately 2,000 a year ago, and 13,000 head of cattle sold on July 18, compared to approximately 3,500 cows at the same time last year.
“It seems like everybody is culling cows they should have culled last year,” Hale said. “It’s been an odd year,” he added.
“We’re seeing substantially more livestock this year” than in the past, “probably twice what we usually run,” Mike Petit, livestock manager at the Waurika Livestock Commission Co., told the Ledger. “A little over 2,500 head” of cattle were sold on Aug. 3, compared to 1,200 to 1,300 usually seen this time of year.
“A few weeks ago we had pickups and livestock trailers backed up three-quarters of a mile,” Petit recalled.
“We are seeing producers downsizing,” said Michael Kelsey, executive vice president of the Oklahoma Cattlemen’s Association. “And we wonder how many of those will come back into the business.”
Kelsey was unable to say with any precision how many producers are liquidating and quitting the business versus those who are selling off now but plan to regroup when circumstances improve. “We’ve had these conversations around the coffee pot and the tailgate.”
But this much is known: The average age of Oklahoma cattle producers is increasing. According to Troy Marshall, state statistician with the U.S. Department of Agriculture’s National Agricultural Statistics Service, the average age of an Oklahoma producer in 2017 (the last time a national agriculture census was performed) was 57.0 years; in 2012 (the ag census is performed every five years) it was 56.2 years.
“The trend line continues to go up,” Kelsey said.
Sale prices are high
Livestock sale prices are “very good,” Petit said. “The market is very strong on cows and calves.” Smaller calves in the 200-300 pound range “are not in great demand,” but prices for yearlings and cows are high. The Waurika Livestock Commission Co. has had buyers from Minnesota, Colorado and Kansas, he said.
Cattle prices “have held really well,” echoed Kerry Givens of Comanche County, Oklahoma Farm Bureau’s District 4 Director.
During the 2011-13 drought in the southern U.S., small cows “would bring 20 cents a pound,” Givens said. Today, though, small-frame cows “are bringing in the 40s and 50s, and some larger cows are bringing 80 to 90 cents a pound,” he said. “So prices are about twice as high as they were a decade ago.”
However, the decision whether to sell is not just financial, Kelsey said. Many producers spend years building up a herd, “so the emotional and mental cost” of liquidation is “substantial.” Some farmers/ranchers may simply rent out their land in the future, he said. “We may see fewer producers come back into the business when the weather turns around.”
“These cows that are being sold at sale barns would normally have four to five or more productive years on pasture,” said podcast producer “Grace The Shepherdess.” Instead, she said, “They’re going to feedlots and then to slaughter this fall. Instead of producing calves, they’ll be in freezers.”
Farmers and ranchers who sell their cows and calves before they’re ready are thinning the herd, leaving little with which to start next year, Don Armes of Faxon noted.
The increase in the number of heifers entering feed lots is important “because these females are the reproductive engine responsible for replacing the cattle inventory that is lost to slaughter,” the Oklahoma Farm Report on the Radio Oklahoma Network pointed out on Aug. 2. “More heifers entering the slaughter pipeline now not only means a smaller cattle inventory for 2022, but a smaller calf crop for 2023 and beyond.”
As more and more cattle are sold, it could be harder to find replacement livestock next year, Givens said. “It’s not like going to Walmart and getting 20 to 30 cows off the shelves.”
A few producers “are being forced to sell out at the moment, because there’s nowhere to go with their herds,” but for some the downsizing appears to be temporary, Petit said on Aug. 4. “One guy this week sold 105 cows. He needed to do some fencing and other repairs, and he had no water, so he decided to sell his cows and make improvements to his property while everything is stressed.”
Water supplies scarce
Pasture and range land conditions “are worsening,” the Oklahoma Farm Report observed. In Oklahoma, 45% of range and pasture land was rated as poor to very poor condition on Aug. 1.
The drought has caused not only pastures to dry up, but farm ponds have also shrunk or entirely evaporated. “Some farmers/ranchers “have to haul water, which is incredibly expensive and time-consuming,” Kelsey said.
Givens, who has a cow/calf operation south of Cache and is a cattle order buyer “for people in this area,” said he is taking this opportunity to deepen a pond. “It’s dry and I needed to clean out the silt that has built up over the years.”
Rather than rely on ponds, some producers have installed windmills or solar-powered pumps and water tanks, Kelsey said.
Rainfall providing even nominal relief from the drought is spotty. Kelsey said he spoke to some ranchers in Arnett, in Ellis County in northwest Oklahoma, “and they said they were in good shape – but 20 miles down the road was a different story.”
If Oklahoma receives adequate rainfall, “I think we’ll see a very high market next year,” Petit said. “But it’ll take more than a couple of light rains. We need a heavy soaker.”
“We go through cycles,” Givens observed. “I think next year will be better than this year.”
“We think the price for cattle will be really strong,” Kelsey said. “What we don’t know is the input costs, such as energy prices, and the weather. We see some positives but also some challenges ahead.”
According to the Oklahoma Farm Report on the Radio Oklahoma Network, the majority of the Sooner State continues to lean below a 40% to 50% chance of precipitation through Aug. 14.
Delivery costs can be
as high as price of hay
Farmers/ranchers “can’t afford hay, and a lot of their pastures are completely grubbed out,” meaning they’ve been “eaten into the ground” by hungry cattle, and ponds and creeks “have dried up.” Corbitt Wall, a livestock market analyst and auctioneer, made those observations during a podcast interview with “Grace The Shepherdess,” who raises sheep and some cattle in the Dallas area.
“If you don’t have access to pond water, or wells, and don’t have access to a rural water district, everything dries up,” Hale said. “If you have a supplement it helps those cattle that eat the grass, even though it’s dried up,” he said. “But when the fire wipes out all that grass, or the cattle overgraze…”
“Hay is exorbitant,” Wall said. Cattle owners “can’t afford it.”
Oklahoma state Rep. Mike Dobrinski of Okeene told the Ledger that a round bale of hay that typically sells for $75 “right now costs $150 to $200.” Wheat fields in which one-third of the crop typically would be reserved for hay “they’ve had to cut for the grain,” and this year yields have been “about half of what they have been.”
Wall agreed with Dobrinski. “There’s not enough growth to put any hay up,” he said.
The wheat that’s available is being used to replant a crop for next year, Hale said, so there’s little to none available for hay.
Hay is “next to impossible to find right now,” Kelsey said. “Almost nobody has any, and those who do have some won’t sell because they’re saving it for their own animals,”
“There are isolated pockets of hay, although only about a third of what producers usually have,” Givens said. “It’s hard to find and it’s expensive.”
Also, the quality of the hay may be poor. “It’s drier and doesn’t have the texture or protein we’d have in a normal year,” Givens said. “Some of it is what we used to call ‘bar ditch hay’.”
Because of the lingering drought and the scorching heat, Oklahoma farmers/ranchers have been able to “put up only about 20% of their normal hay crop, so they won’t have enough to get through the winter,” Scott Blubaugh, president of Oklahoma Farmers and Ranchers Insurance, said recently.
Armes told the Ledger that one of his neighbors located some hay for sale in Nebraska. “But it’d cost $6 a mile to drive 200 or 300 miles up there to get it.”
A rough rule of thumb is that it costs “$6 a loaded mile,” Kelsey confirmed. “That’s twice as high as it’s traditionally been.”
Diesel prices in southwest Oklahoma on Aug. 4, according to GasBuddy were:
$4.29 to $4.39 per gallon in Lawton.
$4.57 to $4.79 per gallon in Altus.
$4.99 a gallon in Blair.
$4.79 per gallon in Duncan and Marlow.
$4.51 a gallon in Hobart.
$4.31 to $4.53/gallon in Oklahoma County.
“Sometimes the freight will cost what the hay costs,” Hale said. Corn is another example, he said. Corn costs about $9.66 per bushel delivered, “and $2 of that is the delivery cost.”
Fertilizer is another expense. “Grace The Shepherdess” said fertilizer costs “nearly tripled from January 2021 to January 2022.” For example, urea, the most commonly used nitrogen, soared from $320 to $920 per ton, she said.
Drought “has so many challenges to it,” Kelsey said. Because of the “intense drought,” input costs are “atrocious.”
“Diesel is up. Freight costs have gone up. Fertilizer, a petroleum by-product, has gone up,” Hale said. Nevertheless, “We’ve been here before,” he said. “We’ll get through it.”
Kelsey concurred. “It will not be an easy business, but Oklahomans are resilient and optimistic.”