Drought slows the pace of rebuilding beef herds
The grass is greener here thanks to some welcome fall rain. But local cattle ranchers say the effects of the summer drought that parched pastures in south Texas and a number of other important beef producing areas of the United States will be as difficult to shake off as dried mud on a cowboy boot.
"I've sold some real good cows that I did not intend to. I wanted to keep them for my breeding stock, but I couldn't afford to," said San Antonio cattle rancher Wilton Steubing.
Many of the nation's cattle producers were forced to reduce their herds this summer when drought and heat burned up pasture lands. Feeding them with supplemental foods like hay became too expensive.
For American beef eaters, who are already paying record high retail prices, this summer's wave of cattle selling could keep prices high. Cattle ranchers in the US have begun rebuilding their herds after six years of liquidation, but the process will be slowed by the drought cattle experts predict. That means a delay in any increase in beef supplies that might termper retail price boosts.
"Expansion is still going on, but this year's drought has slowed the rate," assessed Tom Beall, an economist with the market research service of the National Cattlemen's Association.
Mr. Beall forecasts that the size of the cattle herd in the United States will increase 4 percent this year. But that will not be reflected in higher beef supplies until 1982 he predicted.
Despite the high supermarket beef prices cattle producers like Mr. Steubing are having a tough year. "Somebody else must be making the money because I'm not," he insisted.
Indeed, besides the drought, cattle ranchers have been beset with high interest rates and rising operating costs this year while calf prices have remained about level for the year so far, says mr. Beall. The result is that most cattle producers are operating at a loss or at the break-even level, he said.
Citing figures from the US Department of Agriculture, Mr. Beall said ranchers must sell calves at 86 cents per pound to break even, but are now earning only about 80 cents per pound on calf sales.
Although calf prices are expected to rise later this year, operating costs may also increase because this year's US feed-grain harvest is about 10 percent lower than 1979, according to Mr. Beall.Also , interest rates have been edging up in recent months.
Nonetheless, the long-term outlook for the cattle industry is bright compared with the cattle industry is bright compared with the cattle industry is bright compared with the trend of recent years when low beef prices brought drastic reduction in cattle herds and forced many ranchers out of business. The rebuilding process now under way means beef prices are apt to remain relatively high and stable for the next few years.
"The marginal operators have been forced out, but the ones that remain are optimistic," said Mr. Beall.
Among ranchers in the San Antonio area, the mood has brightened dramatically in recent weeks, thanks to rains that provided the first sustained moisture since last fall.
"We have enough moisture now for seeding some feed grain and some grazing grass," assessed Thurman Kennedy, the agricultural extension agent for Bexar County, which includes the city of San Antonio.
Cattle ranchers are not the only beneficiaries of the rains that have fallen in th eSan Antonio area recently. Farm crops, which account for about 35 percent of Bexar County's agribusiness sales, will require less irrigation and yields could increase.
Overall, any improvement in the agricultural sector here will have significant positive impact on the San Antonio economy. As the largest city in south Texas, San Antonio is a major processing and distribution point for agricultural commodities in a market area that covers 47 counties, according to a study by Texas A&M University.And agribusiness generates 30 to 40 percent of the economic activity in that trade area, the study found.