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Drought-Fueled Cattle Sales May Ease Rising Beef Costs for Tyson
A prolonged drought from Kansas to Texas probably forced U.S. ranchers to sell more cattle to feedlots last month, signaling increased supplies for meat processors including Tyson Foods Inc. (TSN) and lower beef prices.
Deteriorating pasture conditions in the southern Great Plains and record cattle prices prompted the sale of 1.935 million head to feedlot operators, up 4.2 percent from March 2010, according to a Bloomberg survey of 14 analysts...
Drought Withers Smallest Hay Crop in Century to Boost Beef Costs
The smallest U.S. hay crop in more than a century is withering under a record Texas drought, boosting the cost of livestock feed for dairy farmers and beef producers from California to Maryland.
The price of alfalfa, the most common hay variety, surged 51 percent in the past year, reaching a record $186 a short ton in May, government data show. Hay and grass make up about half of what cattle eat over their lifetimes, so parched pastures are forcing ranchers to find alternative sources of feed, pushing some spot-market corn to the highest ever.
Farmers in Oklahoma and in Texas, the biggest producer of hay and cattle, may harvest only one crop from alfalfa and Bermuda grass this year, compared with three normally, said Larry Redmon, a state forage specialist at Texas A&M University. Cattle that usually graze on fields through September or October are instead being sold to feedlots, where they are confined in pens and eat mostly corn.
“We’re just running out of grass,” Bo Kizziar, the feedlot manager at Hansford County Feeders, said by telephone from Spearman, Texas. With pastures disappearing, Hansford is moving cattle into its 50,000-head feedlot three months earlier than normal, boosting costs as the company buys more corn, he said...
DECATUR (CBSDFW.COM) – For 17 days straight, the Dallas-Fort Worth Area has reached triple digit temperatures.
With the hot weather and lack of rain, nearly the entire state remains in a serious or severe drought. Currently, 246 of Texas’s 254 counties are under a burn ban.
That is creating a surplus in the number of cattle heading to auction, as livestock owners can’t afford to feed them and are looking to sell.
Jess Elrod, of Sanger, has been in the cattle business all of his life, but right now, keeping his cows seems to cost more than they’re worth.
“The hay prices and feed prices have gone up and the grass is all burned up. There’s nothing to eat,” he said. “The grass is like it is in December or January, and the grass that’s left doesn’t have any protein in it. Anything that you can do without needs to go to town.”
That’s why Elrod and many other cattle raisers are thinning out their herds by taking some to market early.
“We typically run between 1,200 to 1,500 a week,” said Roland Davie, of Decatur Livestock Market. “Today we’ll be close to 3,000. Last week we were at 2,700.”
On a typical week there would be about three full cattle pins at the Market, but Monday, they had to use more than double that because of the heat index.
Operators asked some ranchers to wait a week before bringing their cattle in.
“We can take more cattle. We have a capacity to take 3,500 to 4,000,” Davie said. “But as hot as it is we didn’t feel like it was best for the cattle.”
Some cowmen said they won’t be able to wait much longer because their pastures just aren’t producing without rain.
Ultimately, the drought will affect what customers will pay for beef at the grocery store, cattle owners said.
Since a mature cow only has one calf per year, it will take years for the ranchers to rebuild their herds. That could cause the price of beef go up as early as the end of this year.
Drought accelerating beef cow liquidation
Expanding extreme drought conditions in Oklahoma and other southern Great Plains states seems to be causing a significant acceleration of cattle liquidation in the region.
In Oklahoma, the combined total for federally reported auctions the past two weeks has shown a 56 percent increase in feeder cattle sales and a 205 percent increase in cow and bull sales compared to the same period one year ago.
The auction totals include significant numbers of double-stocked summer stocker cattle from the Osage country that are typically marketed this time of year. However, the totals also include large numbers of cows and lightweight feeder cattle that are not typically marketed.
Originally posted by WeRpeons
reply to post by Thunderheart
The price of meat has been going up in price lately. If it doubles in price, sales of beef will drop drastically. Chicken prices will rise because the demand for chicken will go up. Pretty soon we'll all be forced to eat healthy and become vegetarians! Maybe that will be the answer were looking for to fight the obesity epidemic in America.