Monday, February 10, 2014

Do Grass Fed Beef Profits Weather Drought Better?

Tough Times Coming for Grain-Finished Beef

Grass fed beef face tough price battle with higher inputs - not so grass finished beef. ref: Drought Shrunken Cattle Herd Portends Future Profits

This interesting observation stuck out for me:

"The message for cow-calf producers is to hold onto the cows if possible," Hurt says. "The short-term losses of the next 12 to 14 months will be replaced by large profits in late-2013, 2014 and 2015."

The anticipated "golden days" are based on reductions in per-capita beef supplies, leading to higher retail beef prices, and an expected return to more normal crop conditions in 2013.

While that could revive some optimism in the cattle industry, Hurt was quick to point out that most thoughts of herd expansion would be pushed off until late-2013.

"The exception is for producers in areas of the country that have abundant forages," he says. "For them, buying cows sold this fall from distressed owners appears to be a strategic move."

Last year, many cows were shipped up to Iowa to out-last the dry Texas/Oklahoma weather. This year, the drought was longer and more widespread, so I didn't hear about this being done so much.

Our cows stayed right where they were. When our corn turned out to be a bust, it became forage. Especially since there have been a lot of weeds grow up in between, which need to be grazed down before I replant to wheat this fall. (Far better to maintain our cows and grow our calves than cut it all down. What they don't eat, they stomp - and the biotics living in their manure adds to that mulch-effect.)

The concept is to manage your grazing well to begin with and then convert any other land you have into grazing (or haying - if you can't get cattle to it).

If your cattle are grass-based, not supplement-based, they'll continue to hold their condition right on through the worst of times. But when you manage your pastures, you don't run out.

Our stockpile is weak, but we saw this coming and got our hay put away. And that hay will go over the pastures we want to rebuild (were actually former crop ground). Extra hay stays stored (if we only put out as much as we actually need.)
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