Farmer Focus: Inputs and loans crushing cattle ranchers
Spring is late, but is finally starting to arrive in Kansas. Our bull sale has come and gone, and the bulls are all delivered, from New York to New Mexico to Argentina.
We have now transitioned to getting cattle worked early, off the feed bill and onto grass as soon as we can.
We normally do controlled burns in this part of the prairie to control weeds and woody invasive plants.
See also: How rising input costs are driving mixed sward rollout
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This year we are rolling the dice and not doing any burning. The downside of this is lower-quality forage. The upside is we can turn out a bit earlier and get them off the feed bill.
We won’t know until the end of summer if it was a good idea or not.
As I drove around delivering bulls this past month, I heard three basic themes repeated over and over by American ranchers.
First, inputs are crushing everyone. The cattle market has actually rebounded dramatically over the past several months.
Normally that would have meant a return to profitability, but it seems as if there is a higher breakeven point, with larger loans to carry.
Second is a much greater demand for feedstuffs. Drought has crept eastward and now 80% of the American cow herd is in drought conditions.
The US Department of Agriculture (USDA) has estimated the cow herd to be crashing towards 30 million.
We hit these numbers in 2014 after nationwide drought, but prices were about 50% higher than now and in “pre-inflation” money to boot.
Before that it was 1953 when the national herd was this small.
Anecdotally, USDA estimates are thought to be still too high.
Third, rural Americans really like Ukrainians. I could 100% see Kansas rednecks stealing tanks with their John Deere tractors or videoing their buddies carrying off land mines with their bare hands while smoking cigarettes.
Lots of western Kansas was settled by Volga Germans. They are another super-tough bunch of rag-tags who got a raw deal from the Russians. Even generations later there are hard feelings baked into people’s DNA.
Basically, everyone around here is cash poor, armed to the teeth, and grouchy. At least something in 2022 is normal.