Soaring feed costs may lead to cattle liquidation.By Amy Bickel
The Hutchinson News
The cowboy's cupboard is becoming bare.
More than two years of drought have taken a toll on ranchers' spring hay supply, which has shrunk to a record low not seen in 56 years. And, with pastures grazed down and start-up moisture for spring hay and grass marginal, fear looms that more cattle will be liquidated across western Kansas' parched landscape.
Tight supplies and skyrocketing prices have had an impact on feedlots like Sublette Feeders in Haskell County.
"The drought has caused a lot of demand and not much supply," said Joe Scott, who operates the feedlot. "It's too high priced to feed too much of it."
So, like many others in the business amid Kansas' feedlot country, Scott is finding different ways to do business. It's a small percentage of the ration already, but the feedlot staff has changed their cattle's menu, cutting back from 20,000 tons of alfalfa a year to 4,000 tons a year - supplementing their diet with other roughages like corn stalks.
The impending drought, however, has those in the cattle business wondering what the year will bring after multiple years of short hay crops and lighter stocking rates on pastures.
Kansas May 1 hay stocks on farms were town 29 percent from last year to 460,000 tons - a number not realized since 1957, according to the Kansas Agricultural Statistics Service. It's also 58 percent below the 10-year average of 1.1 million tons.
Ranchers, however, went into the winter season already short of hay, with Kansas having one of the biggest declines in the nation for December stocks.
In addition, drought played a major role in reducing hay production in many other states in either 2011 or 2012, or both - making the commodity even scarcer. The U.S. inventory, at 14.2 million tons, is the smallest since 2007 and smaller than any May 1 total going back to 1973. It's also down 36 percent from the previous 10-year average.
Hay carryover is usually down somewhat in the spring after a winter of feeding, said Kansas
State Statistician Jason Lamprecht. But in the western part of the state, conditions aren't there to rebuild the supply. Moreover, the cool spring has delayed the first cutting into possibly June - if conditions are even fruitful for a first cutting.
"When it comes to hay, if you get the rain and it starts to grow, you can get a crop," Lamprecht said. "But if it stays hot and dry and it doesn't grow, not only does the production go down, quality is not as good."
Rain, however, comes sparingly and the forecast going into summer isn't looking promising, Scott said. He said his feed yard has only averaged 60 hundredths of moisture per month for the past five or six months.
"That's nothing," he said. "It's hot, dry and dirty and we haven't gotten a decent rain."
At Dodge City's Winter Feed Yard, manager Ken Winter said his feedlot is not nearly stocked to capacity. With the drought, they are feeding a larger percentage of their own cattle, he said.
"This drought is pretty devastating in our part of the country," he said. "We aren't going to have a good wheat crop this year in western Kansas ... There is no subsoil moisture, we are just in bad shape.
"We have such a big turn to make," he said of getting out of the drought. "It's not like an inch of rain will change the looks of things."
He hasn't changed his cattle's rations, he said. Instead, for the small percentage of hay he buys, he is paying a hefty price - over $230 a ton.
Three years ago, according to the U.S. Department of Agriculture, the price was hovering around $125 a ton.
But things are getting better, said Kyle Averhoff, who runs Royal Dairy at Ingalls. They have been able to purchase hay all in a 60-mile radius of the dairy.
Part of the reason is drought conditions in others states are slowly improving, he said, helping maintain much of Kansas' tight supply stays in Kansas.
"Two years ago, you really saw a lot of pressure on our market to the south," he said. "This past year, parts of Texas started getting rain again and guys in Texas aren't shopping in Kansas as much for hay."
Beside being affected by the drought, hay acreage is down somewhat because more acres have been planted to higher-priced crops like corn and soybeans, said Rich Hruska, with the U.S. Department of Agriculture's Market News Service in Dodge City.
Yet, those traveling west will find that things aren't pretty, Hruska said.
The wheat is stunted from the lack of rain. Pastures are hurting. In its latest report, the U.S. Drought Monitor rated the western half of Kansas as extreme to exceptional - the highest rankings.
"Here in the west, it is still very critical," said Hruska, "People see the rest of the nation getting rain, they think the grass is green and growing. But we're a big state and we're a big country and the drought is still a major concern."
"If we don't have rain out there, there will be more liquidation of cows and then everything just keeps trickling down."