As ranchers in drought areas sell cows, others buy
Monday, September 19, 2011
CHAMPAIGN, Ill. (AP) — The drought in the Southwest may help 29-year-old Chad Bicker get to his goal of being a full-time farmer and rancher by the time he’s 40.
As farmers in Texas and other bone-dry areas sell cattle because they can’t grow hay or afford to buy feed, Bicker has been buying animals for his farm in Illinois. He has 25 cows and hopes to have 35 by next year.
“You’re seeing a lot of people get out of the cattle industry just because of the (drought),” Bicker said. “ . . . It’s a chance for us to expand.”
Cattle experts in areas not affected by drought say they’re seeing a lot of farmers like Bicker take advantage of rising beef prices and cattle sales in dry areas to expand their businesses. Beef prices have risen because of strong export demand from Asia and a relatively low supply in the U.S.
And, even with farmers like Bicker adding cows, experts say it won’t be enough to offset the losses from the drought and ranchers cutting animals over the past five years because of rising land and feed costs. Iowa State University economist Shane Ellis said he didn’t expect the total number of cattle to increase in the U.S. for at least another four years.
While the beef industry had already been shrinking, the pace accelerated this year when ranchers in Colorado, Oklahoma, Texas and other dry spots thinned their herds or sold off their cattle altogether because they couldn’t grow hay and buying it and other feed was too expensive. The U.S. has about 31 million beef cattle, down 5.6 percent from 2006, the Department of Agriculture said this summer.
Many cattle are being sold at stockyards like the one just outside Joplin, Mo. The Joplin Regional Stockyards sits in the middle of a big ranching area that’s been dry this summer. Most of its buyers this year haven’t been from the area on the Oklahoma border, spokesman John Harmon said.
“A lot of our stock cows go to northern Missouri, and a lot of them are going into the southern tier of Iowa,” which have had more rain, he said. “Our guys right now, they’re just trying to hold everything together with the cows they got.”
Bicker, who grows soybeans and raises cattle near Lena, about 130 miles west of Chicago, said he’s added a handful of cows through auctions, as well as buying direct. He and his wife both have full-time jobs in town while he works on expanding the farm.
To do that, he bought pasture this year, enough that he says he could probably grow to 50 head before he has to buy more.
“It’s exciting times,” Bicker said, “but it’s also a lot of sleepless nights.”
What makes it sleepless are the factors that have caused others to downsize or get out of the business: Feed prices are high because corn prices are high. Strong demand for corn and soybeans also has pushed up land prices in states like Illinois and Iowa.
Bicker said he bought the pasture that was offered to him because if he didn’t, someone else would almost certainly buy it and plant corn. And, there’s competition among ranchers. One that Bicker approached about buying cattle said no because he had plans of his own to expand.
Big ranches are growing too in areas that have had enough rain. The number of cows in Montana grew this year, while it declined in other parts of the West and Northwest, said John Paterson, a beef cattle specialist with the extension service at the University of Montana.
“Our guys are feeling pretty good right now, to be honest with you,” Paterson said. “We’ve had nice rains, good grass.”
Rick Mindemann and his family have about 250 cows on 4,300 acres in eastern Montana — a herd they expanded by about 20 percent this year because their green, healthy pastures could support it.
Mindemann also has another 120 Angus cows in Concord, Wis., where he lives. He breeds those cows to sell to other ranchers who are growing and expanding, and he’s seeing plenty of business that he expects to continue as long as the weather holds.
“It’s very profitable to be in the cattle business, and I think it’s going to continue on indefinitely,” he said. “The population is expanding at this point, and we’re feeding the world.”
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