Midwest Drought Means Less Corn For Texas Cattle
NORTH TEXAS (CBSDFW.COM) - It takes Texas grass to raise Texas cattle but it takes Midwest corn to get them ready for market. Last year the drought in Texas meant little grass. This year the Midwest drought means less corn. In both cases this means less money for Texas cattle ranchers.
To raise Texas cattle is really to be a grass farmer. You harvest that grass with cows. Last year? Not much grass.
"I've been through some droughts before but I've never seen anything like this drought we had last year," said Pete Bonds, a second-generation cattle rancher in Saginaw.
Bonds had to cut his herd down last summer from 7,000 head to 3,000. He couldn't afford to truck in hay to feed them, so he sent them to market instead. Ranchers all over the state were doing the same, so prices were low.
It also means Bonds now has fewer calves to sell this year. Rain has allowed his pasture to start to heal. He says it'll take three to four years for there to be more grass than weeds again. If the rains keep coming, it will take between three to five years to get his herd back to full size. The problem is drought elsewhere.
America is the world's largest corn producer and this year's crop isn't doing well. The USDA is forecasting the smallest corn crop in more than 20 years, forcing corn prices up to record highs. More than half of the Corn Belt (centered on Iowa) is in extreme drought.
To make matters worse, the drought peaked in July, right when the corn was pollinating. Rain has started to show up in the Corn Belt, along with cooler weather but there aren't many actual kernels on the cobs. The harvest has just started and already it is showing a very low bushels-per-acre ratio. The irony is that there are so many acres. Farmers planted more corn than since the 1930's.
About 70-perent of the U.S. corn crop goes to animal feed.
Texas is America's largest cattle producer. Cows start on Texas grasses but finish on Midwest corn in feedlots. When the corn gets more expensive the ranchers get less profit. Last year's drought mean fewer cows.
Summing up the plight Eldon White, with the Texas Cattle Raisers Association, said, "So now they are in the position to try to pay their bills with calves that they are selling in the market are bringing less."
Midwest ranchers have flooded supermarkets with beef for the same reasons Texas ranchers did last year; the Midwest drought meant no Midwest grass. But what about next year?
Next year there will be less in the meat section of your grocery story -- period. Corn doesn't only go to feed cattle; it also feeds American hogs and chickens.
Hog farmers are setting records with the number of hogs going to slaughter. They are trying to beat the spike in corn prices and make more profit on the hogs they have. They won't add more with corn prices so high.
The situation is different with raising chickens, you can't send them out to pasture. With a stress on corn supply farmers will simply raise fewer chickens.
In the world of supply and demand less is more. As in meat will cost you more.
Jeff Ray is the Environmental Reporter and Meteorologist at CBS 11. You can follow him on Twitter: @CBS11 Jeffrey. Email with comments or story ideas to jaray@cbs.com
