July 6, 2013 - Cattle Ranchers and Drought (HUFFINGTON POST GREEN) JAN 13, 2012

U.S. Drought In 2013 Hurts Cattle Ranchers With Dry, Poor Wheat Crop

Reuters | Posted: 01/14/2013 1:00 am EST

 

* Wheat pastures wither as drought persists

* Cattle moved to feedyards sooner than expected

* Record high cattle, beef prices seen this year

By Theopolis Waters

CHICAGO, Jan 14 (Reuters) - Oklahoma rancher Kent Donica has given up. The drought that has ravaged pastures on his ranch and throughout the region has won.

Since last September, Donica has sold nearly all of his 800 cattle because there is no pasture to feed them and he now works as a ranch hand nearby to make ends meet until it rains again.

Last autumn he had hoped his winter wheat crop would feed his cattle and keep his ranching business going. The wheat also would reduce the need to buy high-priced feed like corn, which would wipe out earnings from the cattle he fattens and sells.

But the worst dry spell in half a century stopped the wheat crop from sprouting properly, depriving Donica's herd of the green shoots that would have sustained it through winter.

Donica is not alone. Across the southern Plains, the worst ever starts to the winter wheat crop have put in jeopardy ranches that depend on wheat pasture for cheap feed, raising the prospect of higher beef prices this summer.

U.S. farmers, squeezed by high prices for corn and other fodder on one hand, and drought that has parched pastureland on the other, are cutting back their herds in a bid to survive. The U.S. cattle herd has shrunk to 91 million animals, the smallest in 60 years.

More pain seems to be on the horizon for ranchers after the USDA on Friday reduced its estimates for corn stocks, sending Chicago Board of Trade corn futures sharply higher. Meaning anyone feeding corn to cattle, hogs, chickens and other animals, will pay more for it.

"The drought has absolutely put me in a survival mode and I finally decided there was no way to fight this," said Donica, who now tends a nearby rancher's cattle to pay expenses.

"If we don't get some rain pretty quick, it will be the end of the world in Oklahoma as far as the cattle business is concerned," said Donica, 47, whose ranch is near Ardmore, Okla.

Kansas, Oklahoma, and Texas, which have all been hurt by drought, are important pieces in U.S. cattle production accounting about 25 percent of the nation's herd, including dairy. The share is even larger for beef cattle, with the three states currently fattening 46 percent of the supply.

Already the shrinking herd is driving up cattle and beef prices, which could further accelerate the decline of beef consumption in the United States, which has fallen more than 16 percent per capita in the last decade.

Farm lender Rabobank forecasts U.S. cattle prices will soar to a record high $140 to $145 per cwt this spring as numbers decline.

The shrinking herd will reduce beef production, with USDA forecasting a 4.3 percent drop this year from 2012.

The smaller U.S. cattle herd and the resulting drop in beef production has lifted retail beef prices to an all-time of $5.15 per lb in November, surpassing the previous peak of $5.09 in January 2012.




POOR WHEAT CROP

Winter wheat is a key link in the economic chain of the U.S. cattle industry. Animals that graze on the tender shoots in the fall and early winter before snow covers the ground tend to put on more muscle than they would eating grain like corn, which boosts their value at auction.

Only a third of the U.S. winter wheat crop at the end of November was rated "good to excellent" by the U.S. Department of Agriculture and the crop has deteriorated since then.

"We essentially have no wheat pasture. There are very few cattle on wheat in Oklahoma at this time and many of them will probably not make it through the winter," said Darrell Peel, Oklahoma State University extension livestock marketing specialist.

Peel expected ranchers to continue selling off their herds to avoid buying high-priced feed.

The sting of the poor state of the winter wheat crop in the southern Plains is being felt as far away as Tennessee and Ohio where farmers, who specialize in rearing calves then selling them off to ranchers like Donica, are struggling to find buyers.

This year, stocker cattle in the Ohio Valley are going to go to auction barns or feedyards a lot sooner, said Sam Roberts of United Producers Inc, a farmer-owned and operated livestock marketing cooperative based in Columbus, Ohio.

"Many of those cattle will wind up being moved to feedyards in the Midwest at a lighter weight than they would normally," said Roberts, an assistant vice president of corporate marketing at United Producers Inc. (Editing by K.T. Arasu and Bob Burgdorfer)

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• In this Dec. 28, 2012 photo, corn stalks stand in a snowy field near La Vista, Neb. Despite getting some big storms in December, much of the U.S. is still desperate for relief from the nation’s longest dry spell in decades. And experts say it will take an absurd amount of snow to ease the woes of farmers and ranchers. (AP Photo/Nati Harnik)

• In this Dec. 28, 2012 photo, Bales of corn stalks are covered with a dusting of snow near La Vista, Neb. Despite getting some big storms in December, much of the U.S. is still desperate for relief from the nation’s longest dry spell in decades. And experts say it will take an absurd amount of snow to ease the woes of farmers and ranchers. (AP Photo/Nati Harnik)

• Severe Drought Threatens Midwest Corn Crops

  PRINCETON, IN - JULY 17: Drought-damaged corn grows in a field on July 17, 2012 near Princeton, Indiana. The corn and soybean belt in the middle of the nation is experiencing one of the worst droughts in more than five decades. Indiana was the nation's fourth largest corn producer in 2011. (Photo by Scott Olson/Getty Images)

• Severe Drought Threatens Midwest Corn Crops

  FRITCHTON, IN - JULY 17: Corn plants dry in a drought-stricken farm field on July 17, 2012 near Fritchton, Indiana. The corn and soybean belt in the middle of the nation is experiencing one of the worst droughts in more than five decades. Indiana was the nation's fourth largest corn producer in 2011. (Photo by Scott Olson/Getty Images)

• In this July 26, 2012 photo, dead fish float in a drying pond near Rock Port, Mo., as a turkey vulture paces the shore. Multitudes of fish are dying in the Midwest as the sizzling summer dries up rivers and raises water temperatures in some spots to nearly 100 degrees. (AP Photo/Nati Harnik)

• Severe Midwest Drought Continues

  WYATT, MO - JULY 18: A buoy used to help guide barges rests on the bank after the water level dropped on the Mississippi River July 18, 2012 near Wyatt, Missouri. Some barge operators have lightened their loads or stopped running altogether on the lower Mississippi because of low water levels. (Photo by Scott Olson/Getty Images)

• Midwest Farmers Continue To Struggle Against Extended Drought

  CUBA, IL - AUGUST 03: Grass, dried from heat and drought, struggles to survive in a cattle pasture August 3, 2012 near Cuba, Illinois. Cattle being raised in the pasture used to be self-sustaining. This summer's drought has forced the farmer to truck in water, after the pond dried up, and extra feed, to supplement the dry grass, from another farm nearly 20 miles away. Farmers in the Midwest and elsewhere continue to struggle after than half the counties in the United States have been designated disaster areas, mostly due to drought conditions throughout the Midwest. (Photo by Scott Olson/Getty Images)

• Midwest Farmers Continue To Struggle Against Extended Drought

  NEW HARMONY, IN - AUGUST 03: Corn dead from drought sits in a field August 4, 2012 near New Harmony, Indiana. More than half of the counties in the United States have been designated disaster areas, mostly due to drought conditions throughout the Midwest. (Photo by Scott Olson/Getty Images)

• The last remaining water in a drought-stricken rural pond reflects the sky and clouds near Calumet, Okla., Friday, July 20, 2012. The nation's widest drought in decades is spreading. More than half of the continental U.S. is now in some stage of drought. (AP Photo/Sue Ogrocki)

• Cattle graze in a dry field near Calumet, Okla., Friday, July 20, 2012. (AP Photo/Sue Ogrocki)

• Rows of corn stalks stand under a cloudless sky south of Blair, Neb., Monday, July 23, 2012. The drought-damaged field was cut down for silage. (AP Photo/Nati Harnik)

• Central Illinois cattle stand in a pasture struggling from lack of rain and a heat wave covering most of the country, Friday, July 20, 2012, in Farmingdale, Ill. The nation's widest drought in decades is spreading. More than half of the continental U.S. is now in some stage of drought, and most of the rest is abnormally dry. (AP Photo/Seth Perlman)

• In this July 19, 2012 photo, a herd of cattle belonging to Kendal Grecian drink from a water tank at his ranch in Palco, Kan. Grecian spent years meticulously breeding his cows to improve the genetics in each generation, but with Kansas in one of the worst droughts seen in decades, he's struggling to find enough grazing to feed 300 cows, plus their calves. He hopes to get by with selling only a quarter of his herd, but there are no guarantees with the drought expected to linger through October. (AP Photo/John L. Mone)

• A field of corn withers under triple-degree heat north of Wichita, Kan., in Sedgwick County Monday, July 16, 2012. The drought gripping the United States is the widest since 1956, according to new data released Monday by the National Oceanic and Atmospheric Administration. Fifty-five percent of the continental U.S. was in a moderate to extreme drought by the end of June, NOAA's National Climatic Data Center in Asheville, N.C., said in its monthly State of the Climate drought report. That's the largest percentage since December 1956, when 58 percent of the country was covered by drought. (AP Photo/The Wichita Eagle, Mike Hutmacher)

• Boats sit on the bottom in a dry cove at Morse Reservoir in Noblesville, Ind., Monday, July 16, 2012. The reservoir is down nearly 6 feet from normal levels and being lowered 1 foot every five days to provide water for Indianapolis. (AP Photo/Michael Conroy)

• A Great White Egret looks for food on a lake drying up from lack of rain Saturday, July 21, 2012 in Chandlerville, Ill. Wildlife as well as livestock, and crops are struggling from the dry weather and a heat wave covering most of the country. The nation's widest drought in decades is spreading. More than half of the continental U.S. is now in some stage of drought, and most of the rest is abnormally dry. (AP Photo/Seth Perlman)

• Boats sit on the dry, cracked bottom in a dry cove at Morse Reservoir in Noblesville, Ind., Monday, July 16, 2012. The reservoir is down nearly 6 feet from normal levels and being lowered 1 foot every five days to provide water for Indianapolis. (AP Photo/Michael Conroy)

• A cow looks for something to eat as it grazes in a dry pasture southwest of Hays, Kan., in a July 6, 2012 photo. The nation's widest drought in decades is spreading. More than half of the continental U.S. is now in some stage of drought, and most of the rest is abnormally dry. (AP Photo/The Hays Daily News, Steven Hausler)

• Corn stalks struggling from lack of rain and a heat wave covering most of the country lie flat on the ground Monday, July 16, 2012, in Farmingdale, Ill. The nation's widest drought in decades is spreading. More than half of the continental U.S. is now in some stage of drought, and most of the rest is abnormally dry. (AP Photo/Seth Perlman)

• The gate is closed on a boat ramp leading to a dry cove at Morse Reservoir in Noblesville, Ind., Monday, July 16, 2012. The reservoir is down nearly 6 feet from normal levels and being lowered 1 foot every five days to provide water for Indianapolis. (AP Photo/Michael Conroy)

• Farmer Joe Fischer holds ears of corn showing the variety of kernal development Thursday, July 12, 2012, at Fischer Farms Inc. in Owensboro, Ky. Normally the silks would already be brown, Fischer said. "There is no pollen left because the silks were delayed. . . because it has been too hot and dry," Fischer said. All five Owensboro-area counties have been designated primary disaster areas because of drought. (AP Photo/The Messenger-Inquirer, John Dunham)

• Devin Davis of Paul Tree Farms uses a special water canon to water 30,000 trees on the 60 acre farm Saturday, July 21, 2012 in Pleasant Plains, Ill. The trees as well as livestock, wildlife and crops are struggling from lack of rain and a heat wave covering most of the country. The nation's widest drought in decades is spreading. More than half of the continental U.S. is now in some stage of drought, and most of the rest is abnormally dry. (AP Photo/Seth Perlman)

• A pontoon is anchored on a mud flat as the owner could not reach their dock at Morse Reservoir in Noblesville, Ind., Monday, July 16, 2012. The reservoir is down nearly 6 feet from normal levels and being lowered 1 foot every five days to provide water for Indianapolis. (AP Photo/Michael Conroy)

• This Thursday, July 5, 2012 photo shows dry soil in a corn field in western Kentucky. Persisting drought conditions have endangered corn fields in western Kentucky. (AP Photo/The Paducah Sun, Allie Douglass)

• Illinois Farms Hurt By Continued Midwest Drought

  OLMSTED, IL - JULY 26: A corn plant grows in a field parched by drought on July 26, 2012 near Olmsted, Illinois. The field, farmed by Kevin Ulrich, was one of several in the drought stricken region of Southern Illinois that were visited by officials from the United States Department of Agriculture's (USDA) Farm and Foreign Agriculture Services (FFAS) department and Farm Service Agency (FSA). Seventy percent of Illinois, the nation's number two corn producing state, is classified as experiencing some level of drought.(Photo by Scott Olson/Getty Images)

• Burnt stalks lie on the ground among rows of corn damaged by drought in a parched field in Louisville, Ill. on Monday, July 16, 2012. Over ten days of triple digit temperatures with little rain in the past two months is forcing many farmers to call 2012 a total loss. Rows of corn sit under high temperatures, burning and crisping until the stalks eventually fall, burning into the dry soil. (AP Photo/Robert Ray)

• Four rows of corn left for insurance adjusters to examine are all that remain of a 40-acre cornfield in Geff, Ill. that was mowed down Monday, July 16, 2012. Over ten days of triple digit temperatures with little rain in the past two months is forcing many farmers to call 2012 a total loss. (AP Photo/Robert Ray)

• Jack Maloney checks on corn on his farm in Brownsburg, Ind., Monday, July 16, 2012. With no significant rainfall since May 3 and the bleak outlook for rain, Maloney expects a total loss on his corn and soybean crop. (AP Photo/Michael Conroy)

• A dry field of corn is seen near Fremont, Neb., Monday, July 16, 2012. The drought gripping the United States is the widest since 1956, according to new data released by the National Oceanic and Atmospheric Administration. (AP Photo/Nati Harnik)

• Jack Maloney displays a drought-damaged ear of corn on his farm in Brownsburg, Ind., Monday, July 16, 2012. With no significant rainfall since May 3 and the bleak outlook for rain, Maloney expects a total loss on his corn and soybean crop. (AP Photo/Michael Conroy)

• An empty dock sits on the bottom of a dry cove at Morse Reservoir in Noblesville, Ind., Monday, July 16, 2012. The reservoir is down nearly 6 feet from normal levels and being lowered 1 foot every five days to provide water for Indianapolis. (AP Photo/Michael Conroy)

• Leaves become dry and brittle on stalks of corn in a parched field outside Effingham, Ill., Monday, July 16, 2012. The drought gripping the United States is the widest since 1956, according to new data released Monday by the National Oceanic and Atmospheric Administration. This summer, 80 percent of the U.S. is abnormally dry, and the report said the drought expanded in the West, Great Plains and Midwest last month with the 14th warmest and 10th driest June on record. (AP Photo/Robert Ray)

• A dry field of corn is seen near Fremont, Neb., Monday, July 16, 2012. The drought gripping the United States is the widest since 1956, according to new data released by the National Oceanic and Atmospheric Administration. (AP Photo/Nati Harnik)

• The sun rises Sunday, July 15, 2012, in Pleasant Plains, Ill. Corn stalks are struggling in the heat and continuing drought that has overcome most of the country. All of Illinois is officially in a drought, and Illinois Gov. Pat Quinn plans a trip to southern Illinois to discuss the state's plans for responding to dry conditions. (AP Photo/Seth Perlman)

• Joe Fischer checks on his corn field Thursday, July 12, 2012, at Fischer Farms Inc. in the 3700 block of Fisher Road in Owensboro, Ky. "We've been in a drought for the last three weeks," he said. Fischer farms the property with his brother Tony Fischer. They planted 900 acres of corn with 30,000 plants per acre. "We have no idea what our yield will be," Joe Fischer said. U.S. Agriculture Secretary Tom Vilsack has designated 26 Kentucky counties among more than 900 counties in 29 states as disaster areas. (AP Photo/Messenger-Inquirer, John Dunham)

• In this photo taken June 27, 2012, farm worker Juan Carlos walks to an irrigated soybean field near England, Ark. The U.S. Agriculture Department has granted a disaster declaration for 69 of Arkansas' 75 counties due to the drought. (AP Photo/Danny Johnston)

• Midwest Farmers Continue To Struggle Against Extended Drought

  CUBA, IL - AUGUST 03: Cattle try to keep cool in the remains of a farm pond in a pasture heavily damaged by drought August 3, 2012 near Cuba, Illinois. Farmers in the Midwest and elsewhere continue to struggle after than half the counties in the United States have been designated disaster areas, mostly due to drought conditions throughout the Midwest. (Photo by Scott Olson/Getty Images)

• Midwest Farmers Continue To Struggle Against Extended Drought

  CUBA, IL - AUGUST 03: Cattle nibble the remains of grass in a pasture heavily damaged by drought August 3, 2012 near Cuba, Illinois. Farmers in the Midwest and elsewhere continue to struggle after than half the counties in the United States have been designated disaster areas, mostly due to drought conditions throughout the Midwest. (Photo by Scott Olson/Getty Images)

• Steve Niedbalski chops down his drought and heat stricken corn for feed Wednesday, July 11, 2012 in Nashville Ill. Farmers in parts of the Midwest are dealing with the worst drought in nearly 25 years. (AP Photo/Seth Perlman)

• Illinois Gov. Pat Quinn, second left, peels away the husk of a drought-ravaged ear of corn, only to find it had no kernels, as Illinois Farm Bureau President Philip Nelson, right, looks on during visit to the Laird Family Farm in Waltonville, Ill. on Monday, July 16, 2012. Quinn says the state will offer an array of debt restructuring and loan programs to farmers and ranchers affected by the drought. Drought is affecting much of the Midwest, where almost a third of the nation's corn crop has been damaged by heat and drought so severe that some farmers have cut down crops midway through the growing season. (AP Photo/Jim Suhr)

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• Severe Midwest Drought Continues

  WYATT, MO - JULY 18: Corn plants struggle to survive in a drought-stricken farm field on July 18, 2012 near Wyatt, Missouri. The corn and soybean belt in the middle of the nation is experiencing one of the worst droughts in more than five decades. All 114 of Missouri's counties have received disaster designations because of drought. Last year this area, which sits across the Mississippi River from Illinois, was ravaged by flooding after the Army Corps of Engineers blasted a hole in a levee to save the town of Cairo, Illinois from the rising Mississippi. (Photo by Scott Olson/Getty Images)

• Severe Midwest Drought Continues

  VINCENNES, IN - JULY 18: Corn plants struggle to survive in a drought-stricken farm field on July 18, 2012 near Vincennes, Indiana. The corn and soybean belt in the middle of the nation is experiencing one of the worst droughts in more than five decades. Indiana was the nation's fourth largest corn producer in 2011. (Photo by Scott Olson/Getty Images)

• In this July 26, 2012 photo, dead fish decompose in a drying pond near Rock Port, Mo. Multitudes of fish are dying in the Midwest as the sizzling summer dries up rivers and raises water temperatures in some spots to nearly 100 degrees. (AP Photo/Nati Harnik)

• This photo from July 31, 2012 shows a beached air boat as bathers walk in the nearly dry Platte River near Yutan, Neb., Tuesday, July 31, 2012. The latest U.S. Drought Monitor survey shows an increase in extreme drought conditions in four Plains states but a slight decrease in the overall area of the lower 48 states experiencing some form of drought. (AP Photo/Nati Harnik)

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