EAST TEXAS -- After several months of drought, the only thing flooded in East Texas is the market for culled beef cows. Even so, with cow prices hovering at only 35 cents per pound, specialists and county agents with the Texas Agricultural Extension Service are still recommending that producers continue to actively cull their beef herds.
"For many producers, the best alternative they have to is take the 35 cents per pound and put the money in the bank where it's much more likely to produce a positive return on their investment," said Dr. Greg Clary, extension agricultural economist.
Clary and other extension faculty recently met at the Texas A&M University Agricultural Research and Extension Center in Overton to assess the drought situation and identify survival strategies for regional producers.
If they've got cows more than 5 or 6 years old, farmers are going to need at least three or four highly profitable years just to offset the additional feed costs they would incur during the drought. With no relief in sight, producers could easily add another $100 to $150 to production costs trying to hold onto cows.
Clary used figures reported from the Standardized Performance Analysis program, which looked at the financial and production performance of 70 beef cattle herds throughout East Texas.
From SPA records, during 1992 to 1997, the average cost to raise and wean a calf in East Texas, not taking into account such things as opportunity cost, was about 87 cents per pound. Calves are currently selling for 65 cents per pound.
"Right now, the market doesn't really justify spending more money to keep cows around. We're already losing money on calves, so why keep cows around that will lose more money?" Clary said.
With pastures at an 80 percent loss and hay cuttings nearly non-existent, feeding a beef cow becomes an expensive proposition. And it's a situation likely to worsen, said Dr. Don Dorsett, extension forage specialist.
"Right now, a 2-inch rain would only cool things off. It will take a 3- to 4-inch rain to start things growing again," said Dorsett, who is based in College Station.
Figuring a cow's forage needs is easy, Dorsett said. One inch of a thick bermudagrass pasture will supply about 250 pounds of dry matter per acre. A cow will eat about 2 percent of her body weight a day of dry matter. For a 1,000 pound cow this means she'll eat about 20 pounds a day.
"That's if the grass is dry. If it's green she'll eat 3 or 4 percent," Dorsett said.
From simple calculations, it's easy to see that if a producer isn't out of forage already, he or she will be soon, Dorsett said. And many pastures in East Texas do not have even the inch of thick grass left.
"Feeding supplements and purchased hay is not really a viable alternative to aggressively culling herds when you analyze the bottom line," Clary said.
"What a lot of people may be overlooking is that during the last few years farmers have lost a lot of equity," he said. "If they spend too much now, they've may never recuperate. That may cost some their farm. Many producers are not in a position to borrow their way out of this."
TOP AGEC