Cattle leaving Texas in mass quantities

Sep 2, 2011

In the late 1800s, thousands of cattle left Texas heading for northern markets. In 2011, thousands of cattle have left Texas heading north looking for something to eat . . . And drink.

Trucks hauling cattle north is a common sighting in Texas these days. Texas has been assigned the highest category of drought which continues its longlasting grip on the state.

Cattle are leaving for grazing, feedlots or slaughter.

Sale barns report threefold to tenfold increases in consignments. Packers are overflowing. Rivaling that of the 1950s, 2011’s drought with fires and chronic triple-digit temperatures has depleted Texas’ feed and water supply and hay reserves for livestock.

Early weaning, unforeseen feeding expenses, and increased fuel costs have devastated ranch budgets. This drought has also taken its toll on Texas’ cow herds. Texas is the largest producer of cattle in the nation.

Ramifications for the national cow herd are clear.

Dr. David Anderson, Texas AgriLife Extension Service livestock economist, researches cattle numbers.

“With a current loss of about 600,000 cows, 2011 will be the biggest numerical drop in Texas’ beef cow inventory in history and the second largest percentage decrease. We have the lowest numbers of breeding cows ever,” said Anderson. “Based on figures from the Texas Animal Health Commission, more than twice as many beef cows have left Texas in 2011 than in 2010. A large percentage of those cows are from bigger ranches that are primarily going to northern states for grazing.”

Swenson Ranches, founded in 1854 and headquartered in Stamford, TX, has endured severe droughts since its beginnings. But current situations present new challenges that differ from droughts in the past.

General Manager Dennis Braden had cowboyed and managed ranches in New Mexico, Colorado and Wyoming for 35 years before moving to Swensons six years ago where his tenure has been dynamic and positive. However, this year’s drought has dictated Texans in agriculture to ‘up their game.’ Optimum cattle prices, increased global markets for beef, feed yard capacities and a decreasing national cow herd factor in with the drought to present unique management decisions.

“This year doesn’t make sense,” Braden said. “Normally in previous droughts, you start by cutting back on your herd, making cattle numbers fit forage situations. But the national cow herd’s now at the 1950’s cow inventory despite an estimated twofold increase in the population. World demand’s higher than ever.

These all factor in as we rethink management of our cattle and land during this drought.”

“Swensons move big bunches of cattle around every 30 to 90 days depending on pasture sizes. Last year’s great rain produced great standing inventories of grass. But now we’re on the second rotation of last year’s grass . . . There’s just not anything green. We’ve early weaned, same as most ranches,” he said.

If grazing plays out, producers fear prices to replace cows will be cost prohibitive when it begins raining, a concern potentially putting smaller operators out of business. Currently, factors indicate that cow prices will only go up, creating a scarcity in the future. Keeping replacement heifers to rebuild herds creates bigger shortages.

“Right now we can’t afford to sell cull cows,” explains Braden. “I can take a $600 cull cow here, put $500 of feed in her to get her bred and I’ve got an $1,100 cow. I can take that same cow up north, sell her as a bred cow and get $1,400 for her, actually taking a cull cow and make her profitable. When Texas greens back up, there’ll be the demand for good mother cows, maybe the better end near $2,500.”

“I know keeping cull cows doesn’t promote good reproductive genetics, but I question selling culls whose reproductive failure may not be their own fault. Weather has mistreated our cows pretty badly this year. Our calf crop may be 10 percent or lower than normal, but I just can’t afford to sell cull cows if I can find groceries for them. We’re 30 days from being out of grass and 30 days from being out of water on some places. One of our leases completely burned,” he said.

Recently, a ‘West Texas Cartel’ of about 12 ranches got together at an ‘emergency’ meeting to discuss the current state of affairs.

“We’re all in the same fix and didn’t want to wind up bidding against each other,” Braden said. “About half of us felt our best option was locating grass up north. The others felt closer options benefitted them more. States taking in the most cattle are primarily South Dakota, Nebraska and Montana. North Dakota and parts of Wyoming, Colorado and Kansas are good. Southern cattle in high country, getting brisket disease is a concern.”

With that info, Braden and another manager headed north with their ‘Big Chief Tablet,’ containing about 30 phone numbers. One would drive while the other called, leaving Texas with a directive to find homes for 12,000 cows, basically a third of those ranches’ combined cow herds. By the time they hit South Dakota, they’d only placed one cow; a hotel desk clerk in Rapid City said he could put one in his front yard.

“But 30 hours into the trip we’d started getting return calls from guys initially saying ‘no’ then calling back saying they’d found room for 200 head,” said Braden. “After talking to neighbors, kinfolk and other resources, those guys might have put together places for 1,000 cows or so locally. Many places would take fewer cows, but distances between the leases was cost prohibitive.”

“Lots of moving parts in decisions about taking cattle north; confined winter calving, associated hypothermia and Texas cattle nave to calf scour problems can decrease profitability that first year. Southern cattle need time to hair up, which is not a concern for us if we get them there soon because we have English cattle. But you take a poor conditioned cow, no hair, arriving on last day of September and 22 degrees that night and she’ll probably die.“ On their first trip, the two spotted a few mama cows here, a few yearlings there, but mostly no cattle reflecting the national cattle inventory. But Braden feels that country is in excellent condition after passing the transition from Texas brown to Ireland green.

“Trips up there have been very productive, making contacts and locating grass for potentially 18,000 head. There’s still some horsetrading to do. The hay price issue is driving Texans crazy. It’s hard to nail down the northern boys because they don’t know what hay prices and weather is going to do,” Braden emphasized.

Some ranches taking in cattle provide minimal care: salt, minerals and checking fences. Others put out hay. Most won’t calve out, but may know someone locally who will contract to do that. Some are leasing the Texas cows instead.

“The economic benefit of sending cattle north is great until you take our Texas overhead into consideration. Then it gets pretty darn tight,” explains Braden.

“We have three ways for this ranch to reduce overhead. First, we quit pasture mediation, which is not a great option after years of hard work. Secondly, maintenance and improvements stop. The third option is layoffs. Fewer cattle in Texas means less work for cowboys. Some ranches are moving employees with their cattle. Fortunately, I work for a company who would rather carry some pretty high overhead before considering layoffs,” he said.

Still, where go the cattle, there go the jobs.

“If it starts raining today, we’re probably at least a year or two away from bringing cattle home, giving our country time to recover. If we get into a lease where we like them, they like us, and economics stay like they are, we may be looking into leaving those cows up north, rebreeding them to calve later. There’s possibilities for expansion,” Braden said.

“When Texas greens up, we’ll be able to restock ranches with our northern cows’ replacement heifers, and with bought cows if we can afford them.”

At this point, homes for about 8,000 Texas cows have been put together by this group. Searching together for leases in northern states has worked well. Braden feels if similar opportunities had presented for smaller producers to locate lease country collectively, they might have been able to hang on to their cows.

Despite obstacles facing drought-stricken states, Braden thinks short supply with good demand could eventually create opportunities in the cattle industry nationally and abroad and feels there will be some real money to be made in the cattle market the next five years—especially if it starts raining. — Ginger Elliott, WLJ Correspondent