As drought conditions throughout the Southern, High Plains and Western regions of the United States continue to wither crops and grasslands, many cattle ranchers are wondering if they should hold on or ship out.
With nearly 450 counties across the United States designated as Primary Disaster Areas by the USDA, many producers are dealing with harsh drought conditions, destructive wildfires, and depleted hay supply. All of these factors are forcing producers to consider herd liquidation.
Ranchers in the hardest hit locations have already been culling their herds, and many who are still holding on will be making some difficult decisions soon.
"After speaking with fellow ranchers, the trigger point will be the 4th of July for some. If there is no precipitation at that time they will start liquidating," says Otero County Commissioner Kevin Karney.
However, many factors dictate whether or not a rancher must sell. According to Karney, producers who stocked hay heavily, or have a lot of carryover foliage from last year's rainfall, are at a much greater advantage.
Still, according to Colorado Extension expert Bruce Fickenscher some life-saving moisture is needed very soon. "We will probably see another herd reduction, especially as conditions in Colorado continue to deteriorate. Prices seem to have held fairly well due to areas north and east getting some decent rains. Also, from the last report I saw, cow slaughter numbers are reported to be higher as well. Other then a few good years, this will be eighteen years of drought in this area, and many herds have not been rebuilt to previous numbers, so the economic and mental stress to producers and to the area is of great concern," explains Fickenscher.
According to the U.S. Drought Monitor, 25 states are reporting some degree of drought. Some are minimal, and others are critical. The states with the most severe drought conditions include Colorado, Kansas, Oklahoma, Texas, New Mexico, Arizona, and Nevada. Numerous counties in these states are battling extreme or exceptional drought.
While current conditions will not have an immediate impact on U.S. meat supplies, and what it means for the 2019 cattle market is up for debate, some producers who are being forced to liquidate their animals early or pay more for feed may see their income suffer.
Farm Service Agency's (FSA's) have loans and programs in place to help farmers and ranchers during these tough times.
Qualified farm operators in the designated disaster areas are eligible for the FSA’s emergency (EM) loans, provided eligibility requirements are met. Farmers in eligible counties have eight months from the date of the declaration of May 16, 2018, to apply for loans to help cover part of their actual losses. FSA will consider each loan application on its own merits, taking into account the extent of losses, security available and repayment ability. FSA has a variety of programs, in addition to the EM loan program, to help eligible farmers recover from the impacts of this disaster.
Other FSA programs that can provide assistance, but do not require a disaster declaration, include: Operating and Farm Ownership Loans; the Emergency Conservation Program; Livestock Forage Disaster Program; Livestock Indemnity Program; Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program; and the Tree Assistance Program. Interested farmers may contact their local USDA service centers for further information on eligibility requirements and application procedures for these and other programs. Additional information is also available online at http://disaster.fsa.usda.gov.
FSA news releases are available on FSA’s website at www.fsa.usda.gov via the “Newsroom” link.