Ranchers send cows to slaughter as drought sears pasture

Aug. 10 (Bloomberg) -- The grass in Melvin Korte’s 280 acres of pasture in northern Missouri is dead, burnt away in the worst drought in the Corn Belt in more than a half-century. Now he’s doing all he can to keep his herd of 63 cattle alive.

He’s using up winter hay and buying feed at prices more than a third higher than three months ago. Later this year, he may bale the dead corn stalks from his neighbors’ fields for feed. “There’s not much nutrition in it,” the 65-year-old farmer says. “But it gets something in the animals’ stomachs.”

Feed-rationing may help Korte save two-thirds of his herd as he and other cattle farmers struggle to feed animals grazing on the brown and barren fields. Otherwise, “liquidation” is the alternative. Without the government-backed insurance available to corn and soybean farmers, cattle-producers may be suffering the most under the drought, responding to higher costs by sending cattle for slaughter early, with some eventually selling their herds entirely.

“You tough it out,” said Korte, whose farm near Curryville is about 70 miles northwest of St. Louis. “People will be deciding how much they need to sell based on whether it rains or not or if they can make it through the winter.”

Missouri, the sixth-biggest U.S. cattle producer, has the nation’s worst-quality pasture, with 99 percent in poor condition or worse as of Aug. 5, according to the U.S. Department of Agriculture. The drought may further thin a national herd that at the start of the year was the smallest since 1952, even as meatpackers including Tyson Foods Inc. and Cargill Inc. boost short-term slaughter, adding to the beef supply, said Bill Lapp, a former chief economist for ConAgra Foods Inc.

Higher Prices

Cattle prices gained about 8 percent since mid-June through yesterday on the Chicago Mercantile Exchange, as the drought tightened its grip on central U.S. Corn, the main ingredient in livestock feed, surged 63 percent in the same period. Today, the grain surged to a record $8.49 after the USDA cut its estimate for the U.S. crop to a six-year low.

The Corn Belt just went through the third-driest June-July period on record, according to the government.

As ranchers try to avoid the higher feed costs, they are pushing younger cattle through the food chain faster. At the Callaway Livestock Center in Kingdom City, about 100 miles west of St. Louis, animals normally sold at 700 pounds are coming to market 100 pounds lighter, and up to twice as many are being sold each week, said rancher Claude Niemeyer.

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