TROUBLES IN TEXAS

Well, almost a month since I posted....Between the "BEYOND SEVERE" drought, wildfires and a hay shortage....

The situation here is very dire. There is little forage left and hay is in short supply...and what is available is coming in from other states at 4 to 5 times the normal price. Hundreds of thousands of acres have burned in the numerous wildfires and lakes/rivers are literally drying up.

These are pictures of a couple of wildfires that have added to the misery.

Just as Americans across the Gulf Coast after "Katrina" and those hardy "East Coasters" now, We will PERSEVERE...for we are not only Texans, but Americans to boot!!

Will be back to posting very soon.

NEW "KID" on the BLOCK!

"Roses" has a new baby bull calf. She is an outstanding Mom!

TEXAS DROUGHT THREATENS NATIONAL BEEF SUPPLY

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.


Beef is the No.1 selling protein in the United States. Last year, consumer spending on beef totaled $74.3 billion. Per capita consumption of beef in 2010 was 59.6 pounds while per capita spending for beef was $240, according to industry research firm CattleFax.

 In the state that gave birth to the cowboy and spawned the culture of cattle drives, modern-day ranchers are fighting for survival. Severe drought (the worst in 44 years) and several million charred acres from wildfires have delivered a devastating "gut" punch, forcing ranchers to take drastic measures to save ranches across Texas. The state's livestock industry has lost $1.2 billion under withering conditions, according to the Texas Agrilife Extension Service, a service branch of Texas A&M University.

In Texas and other states with large cattle herds, the beef supply chain starts at the ranch. Ranchers own a herd of beef cows, each of which gives birth to a calf once a year. The mother nurses the calf and the pair graze on grass through the summer and into the fall, whereupon the fattened calf is sent to market.

This year, ranchers should be reaping the benefits of high prices, low supplies and high demand for their beef. The demand for calves from feedlots, where cattle add hundreds of pounds before slaughter, seems insatiable. Without rangelands full of nutritional forage, cows will struggle for nutrients. The herd will lose interest in breeding and cows may not provide enough milk for their calves, bringing the critical first step of America's beef cycle to a halt.

Among all meat production, beef producers typically incur some of the highest production costs. For example, costs for raising cattle are much higher than for poultry farming. Cattle producers pay more for each animal, grazing lands, fertilizers, feed and processing systems versus poultry farmers. Also the time it takes to prepare cattle for sale is much longer compared to other meats. It takes just 46 days for chicken to be market ready, but can take up to two years for beef.

Exacerbating the situation further is the shrinking number of cattle available for consumption. As beef producers struggle with the escalating drought, rising business costs, and mounting debt, more of them are selling their heifers for meat production, instead of breeding them to expand the herd. In Texas, the largest producer of cattle in the U.S., the "state herd" is down nearly 18% since 2008. In fact, ranchers and farmers across the country are shrinking their herd sizes bringing the nation's cattle herd count to it's lowest since 1958.


ADDING SALT TO THE WOUND:

The outlook for more rain looks grim. The National Weather Service's Climate Prediction Center forecast below-normal rainfall for Texas over the next month at least.

MERRY CHRISTMAS!

I'll be back the first week of January...2011!

CATTLE BARONS - TODAY

PART 2.2 of The Series: A LIVING WAGE FROM COMMERCIAL CATTLE

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.

A cattle baron is a man who possesses great power or influence in the activity of herding/caring/selling of cattle. - Unknown

 The Civil War devastated economies in the South and in particular Texas. However, Texas had a distinctly singular and bountiful resource. Millions of longhorn cattle roamed wild across the state. Due to the ravages of the war and the steady stream of immigrants, beef was in heavy but short supply across the nation. To complicate matters further, Texas had plentiful supplies of beef but, no distribution system (railroads)...Kansas (three states and hundreds of miles away) had the rail heads to get the beef to market. 

In the late 1800's, some daring and intrepid cattlemen rounded up longhorns by the millions and herded them north across Texas, Oklahoma, and into Kansas. In doing so they gave rise to two, distinctly American, icons: the Cowboy and the Cattle Drive.

"Driving Cattle circa 1887
(John Grabill)

In less than two decades, following the Civil War, great herds of these longhorn cattle were rounded up and driven north to the rail heads in Kansas. These wild and unpredictable bovines were only worth about a dollar a head in Texas, but upon arrival to the shipping points in Abilene, Dodge City and Wichita, a single longhorn could fetch as much as forty dollars. More than six million longhorns made the three-month trek north. Often referred to as the greatest migration of livestock in the history of the world, cattle drives and the cowboy became living legend. 

Ranch Brands on Marker
 Doan's Crossing, Texas
Learn More

The moving of several thousand wild head of cattle, at one time, over five hundred miles of rugged prairies, encounters with murderous outlaws, and hostile indians brought fame and fortune to a select few. Men such as Charles Goodnight, Oliver Loving, John T. Lytle, the Blocker brothers, and a host of others took enormous financial as well as personal risk (Loving was killed in an Indian attack while leading a cattle drive) to reap the considerable rewards. 


Legendary ranches were born as well. 

The Y.O., XIT, JA, King Ranch, 6666, Waggoner, and Matador Land and Cattle were among the largest providers of cattle at that time (Side Note: With the exception of the Matador, all of the above named are still active cattle ranches today). These men were literally "Barons of the U.S. Cattle Market" and wielded considerable influence in the pricing of beef.

That was then...This is now.  

The open range became fenced pasture land. Cattle are now "driven" to market in eighteen wheelers via a modern highway system. Charles Goodnight, Oliver Loving, the XIT, and 6666 no longer influence the pricing of beef. In fact they are now merely characters and entities of a romantic and colorful past...just "history"as they say.

"Driving Cattle" - Modern Day

Today there are only four "cattle barons". Their decidedly unromantic names are Swift, Cargill, National Beef, and Tyson. These conglomerates are well financed, ruthless buyers of beef "on-the-hoof". Together they control and process 69% of the beef produced in the United States. In doing so, these "Big Four" heavily influence the price of live cattle.

"The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways." - President John F. Kennedy

LITTLE KNOWN FACT:

Many of the cattle drives were "staffed" by cowboys between the ages of 15 to 20. There was such a shortage of labor that many of the "cowboys" were actually...cowGIRLS. Many of whom cut their hair and made themselves appear as boys to get a job that was dirty, physically exhausting, and paid about a $1.00 per day. 

To learn more about the considerable influence and heroism of women in the American West visit the National Cowgirl Museum and Hall of Fame in Fort Worth.  Learn More Here

PART 3: A Living Wage From Commercial Cattle: What Goes Up...

LIFE AT THE "CRAPS TABLE"

PART 2.1 - of The Series: A LIVING WAGE FROM COMMERCIAL CATTLE

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.

"When you are ranching and farming, you have to take what the buyer offers." (John Hodges)

Few people are formally trained in the study of economics, but everyone makes economic decisions.
Any attempt by an individual to earn or spend money involves economic decision making. Earning and
spending or buying and selling influence the way our economy functions. It is this economic influence that also makes the cattle market move each day by establishing prices for cattle and putting beef on the consumers’ table.

Economics is also thought to be a mathematical science by many people since economists are
constantly working with numbers trying to predict the outcome of some economic event. Actually, economics is the study of human behavior. Economists try to relate how people will react to changes in supply and demand, to higher or lower interest rates or to increases in the cost of production.

Beef cattle marketing is also a study of human behavior. Cattle prices are determined by how much beef people choose to buy and sell in the market place. If people want to buy more beef than is available in the marketing channel, then the price of beef is bid up rationing the beef among buyers. If producers need to sell more beef than people are willing to buy, then the price of beef will be forced downward to move the excess supply.

Cattle producers often say that to make money in this industry you must buy low and sell high, but that only works when the individual who is selling has some way of influencing the price. Since the overwhelming majority of beef is sold via auction, the price the individual producer receives is thus dictated by commission agents (Buyers) representing the interests of large feedlots and/or beef processors. Which means they will try to buy at the lowest price possible....

We learned (above) that economics is based on human behavior and the supply/demand function of pricing. So, a producer could just hold his/her cattle until demand is high and thus improve the price...simple, right? Uh...no. The cattle being sold today will not be available to the consumer for 6-12 months. The price received today is based on a "best guess" of what consumer demand will be at a future date...which means the "buyer" will hedge the price against unknown factors...thus, no matter what the individual producer does, the selling of cattle in the auction process is nothing more than a "roll of the dice".

PART 2.2: A Living Wage From Commercial Cattle: Cattle Barons - Today

Sometimes, life just seems to make sure you are doing the things that you should be doing...

These past few months have been spent tending to "family"


New postings 
coming SOON!