Livestock outlook improves outside storm-stricken areas

By Jonathan Knutson

Going into the winter of 2012-13, most Montana livestock producers were discouraged. Expenses were high, commodity prices were low and earning a profit was virtually impossible, says Greg Wichman, a Hilger, Mont., sheep and cattle producer and vice president of the Montana Wool Growers Association.

But now, going into a new winter, producers’ outlooks are much brighter.

“There’s a lot more optimism,” Wichman said.

To be sure, the disastrous early October blizzard that hit livestock producers in the western Dakotas is receiving widespread attention, and rightly so. Ranchers there face major challenges that won’t be resolved anytime soon.

But ranchers across the rest of the Upper Midwest generally are upbeat. Here’s why:

• Pastures and hayfields, stressed badly by drought in 2012, have rallied after a wet spring and fall. For instance, in the Mitchell area, in southeast South Dakota, producers generally have a normal or above amount of hay going into the winter, says Jim Krantz, cow-calf field specialist with the South Dakota State University Extension Center in Mitchell.
• Because the supply of hay has increased, its price has tumbled.
• For instance, a large, round bale of high-quality alfalfa sells for $180, down from $270 to $310 a year ago, at the Rock Valley (Iowa) Hay Auction Co.
• The price of corn, which is widely fed to livestock, is roughly half of what is was a year ago.
• “The lower corn prices have helped,” says Charlotte Meier, executive director of the North Dakota Pork Council.
• Livestock prices generally have risen. “We have cattle prices at all-time highs,” says John Dhuyvetter, area livestock specialist with the North Dakota State University Extension Service in Carrington.

With sheep, “Prices have risen enough where it’s worthwhile raising them again,” Wichman says
Though the outlook has brightened, there are reasons for continued concern.

While many expenses have dropped in the past, pasture rental rates generally have risen, Krantz and others note.

In South Dakota, for instance, the average annual rental rate for pasture is $20 per acre, up from $17.50 an acre a year ago, according to the annual survey by the National Agricultural Statistics Service, an arm of the U.S. Department of Agriculture.

Another concern is former pasture and Conservation Reserve Program land has been converted into farmland because of attractive crop prices, Krantz says.

Less pasture increases competition for, and the price of, remaining pasture. The loss of pasture also hampers producers’ efforts to increase their herds.

Less CRP land leaves a smaller safety net for producers who might graze or hay that land during drought, officials say.

Despite the concerns, though, producers appreciate how many conditions have improved, Wichman says.

“We held on fairly well” during tough times last year. “We just hope these better conditions last a while,” he says.