POSTED: Monday, April 18, 2011 - 10:26am
UPDATED: Tuesday, May 22, 2012 - 4:31pm
EAST TEXAS — High feed and fuel prices coupled with severe drought make this year’s outlook for cattle producers pretty grim, officials say.
Cattle prices are setting records this year at about $118 per hundred weight, according to the U.S. Department of Agriculture. Last year, cattle prices were about $93 per hundred weight.
Estimates by the Texas Farm Bureau put production costs for rural businesses up 85 percent, and Gregg County agriculture extension agent Dennis Smith said low hay production could raise costs even more.
The rising prices might force many ranchers to quit the cattle business, former Texas and Southwest Cattle Raisers Association President Dave Scott said.
“I would have to say they have the best incentives for folks to get out — dry weather and high sale prices,” Scott said. “Usually when the weather is dry, beef prices are down. The cost of corn being so high is also a big factor.”
Smith said the rising costs of hay has been putting pressure on cattle raisers, too. He said ranchers had to use much of their hay reserves this past year because of drought and more hay than usual during the winter because of extreme temperatures.
“Hay supplies were very slim over the winter. Right now is the time we should be able to grow a lot of rye grass, but we haven’t had any rain,” Smith said.
“What moisture is in the ground is being dried by windy weather. There are more people considering selling out, right now.”
Demand for beef is stable because of beef exports, which means the high sale prices will only continue because of supply and demand, he said.
A shortage in cattle raisers could be severe, the men say.
Smith said the number of cattle producers already is at the lowest point since the 1950s.
Hall said a weakening agriculture industry in Texas could be disastrous.
“The trek toward the auction barn has probably already started,” Hall said. “The situation is pretty grim.
“Agriculture in Texas is one of the most important industries behind oil and gas. It’s a $100 billion industry, and if it’s hurt, that’ll be a big blow.
If agriculture takes too big of a hit, Hall said, communities that are agriculture heavy, like those in Northeast Texas, will see some hard times. He said farmers and ranchers who aren’t producing won’t buy new trucks or new equipment.