It must have been a wise philosopher who once said, “rain makes corn, corn makes whiskey.” Corn makes beef, too, and this foundational truth about agriculture is proving true across the country where corn and cattle are king.
Widespread drought has prompted a reduction in the nation’s cowherd. In Texas, local law enforcement worked to keep traffic moving around the line to unload livestock to be sold at the Emory Livestock Auction. The line, according to an article in Drovers, stretched a mile in each direction for hours. According to the sale barn reports, the sale brought in 3,494 head of livestock — cattle, horses, sheep and goats. And of those, 2,763 head were breeding stock cattle as opposed to feeder or fat cattle. Breeding cattle are heifers, cows and bulls while feeders and fats are bound for finishing and/or slaughter. The auctioneers began selling at 9 a.m., and dropped the gavel on the final lot around 2 a.m.
Sale barns all across the country are seeing an uptick in cattle sold, blamed on drought conditions, high feed-input costs and steady sale prices. Here in northeastern Colorado, irrigation water is becoming scarce quickly. This comes at an important stage of corn growth as much of the corn raised for livestock feed is tasseling and beginning to set ears. A lack of water now to finish the crop means fewer ears, more sparsely filled ears, and less dry matter. Typically, field corn meets one of two destinies — it can be combined in the fall and is most commonly steam-flaked for livestock-feed, or it can be chopped for silage.
Silage crews will typically roll out in early September to chop corn to load in the field onto a truck bound for a dairy or feedyard. It’s piled and compressed to preserve it and fed throughout the year as part of a ration that is served warm to cattle. It’s one of the most perfect cattle-ration ingredients and it’s a major economic driver in this area.
Silage choppers are grinding their teeth hoping the corn will “make” and there will be plenty to chop and deliver to customers. It takes about the same amount of diesel to chop and haul good silage as it does poor silage, but silage is tested for weight, moisture and other levels and paid on quality and quantity. A chopper’s 300-gallon tank runs about 11 hours. Though trucks and the number of miles driven daily vary widely, many drivers fill 100-gallon tanks each day. Call it comparative suffering if you wish, but as much as I dislike paying to fill my Yukon, it’s much worse to write the check to fill the Peterbilt we haul silage with.
As I’ve said before, an economist I’m not, but supply and demand mean corn prices are likely to be high. Though this is theoretically good news for corn growers, it’s not great news for cattle producers. Any benefit the corn growers are seeing is also likely offset by outrageously high input costs like seed, fuel and fertilizer.
This is all occurring while cattle producers are culling deeper into their herds, completely dispersing, in some cases, and weaning and selling calves early as the feed reserves have run out. This decline in the national cowherd numbers isn’t a decline that bounces back when whatever kind of inflation mess this is levels out. It takes time to rebuild cow numbers and some of those producers will exit the business, some like their hair is on fire. Government data cited by Reuters shows ranchers have already reduced the nation’s cowherd numbers by about 2% from a year earlier to the lowest level in seven years for that date. And as long as it’s not raining, cows will continue to be sold.
The inflation is hitting on both sides, just as then-Sen. John F. Kennedy so famously said, “for the farmer, is the only man in our economy who has to buy everything he buys at retail — sell everything he sells at wholesale — and pay the freight both ways.”
That all said, according to Tyson, consumer demand for beef remains strong and reported sales volumes rose 1.3% in the last quarter. Chicken prices at the meat counter, conversely, were reported 20.1% higher in the last quarter from a year earlier and wholesale white-egg prices reached a record high $3.40 per-dozen, due partly to demand and partly to avian flu outbreaks that killed commercial laying hens.
This isn’t sustainable for cattle producers, and it isn’t sustainable for consumers. I had to laugh to keep from crying the day we had to cull more cows from our herd and hours later my weekly gas and grocery run triggered the fraud alert on my debit card. It truly is eating us alive.
Rachel Gabel writes about agriculture and rural issues. She is assistant editor of The Fence Post Magazine, the region’s preeminent agriculture publication. Gabel is a daughter of the state’s oil and gas industry and a member of one of the state’s 12,000 cattle-raising families, and she has authored children’s books used in hundreds of classrooms to teach students about agriculture.