"Right now, we're in the fear-driven side" of the livestock market, Terry Hayhurst said. "Everybody's afraid what [prices] might end up doing. We don't know where that outcome is. The good Lord's the only one that knows that." Staff photo by Jim Avelis
TERRE HAUTE — You will probably see fewer cattle grazing in Indiana pastures this fall as the drought of 2012 drives costs higher for livestock farmers.
While many people are focused on the impact of the drought on corn and soybean farmers, its impact on livestock producers may be the most dramatic, said Chris Hurt, a Purdue Extension agricultural economist.
The Wabash Valley “obviously, is in very deep trouble with regard to several things,” Hurt said Friday. “One is pastures.” Land for grazing is “pretty much gone,” he said. “So probably a lot of the cattle are having to be fed with hay that was produced this spring. Or, if [farmers] are having to buy feed, that’s tremendously expensive.”
Many livestock producers, anticipating higher costs, are “liquidating” their herds, Hurt said. That means more beef being processed and taken to market months ahead of normal. And that means lower beef prices, at least in the short term.
“Higher feed costs cannot be passed on to the consumer in the short run,” Hurt said earlier this month in a Purdue Extension news release. “So animal industries have to take these losses or begin to liquidate animals.”
Eventually, however, higher prices will appear in the grocery stores as livestock supplies decline and higher input prices remain, Hurt said.
Michael Beull, owner of Wabash Clay Custom Meats, a custom meat processing business in Clay City, said he is seeing appointments for beef processing well above normal for this time of year.
“I have a much higher amount of beef business on the books than I [normally] do this time of year,” Buell said.
“That’s unusual. My opinion is, yes, that’s a reflection of the fact that many hobby farmers and some professional farmers are indeed getting rid of livestock.”
Terry Hayhurst of Hayhurst Farms in southern Vigo County agreed the drought and higher feed prices are driving more cattle farmers to market early.
“I understand everybody being concerned because these are unheard of conditions we’re in,” Hayhurst said. He has been farming in southern Vigo County since the 1980s and “I’ve never seen a year as dry as this,” he said. Even the drought of 1988 was not this bad, he said.
Another source of livestock feed is silage, which is made from corn or other green plants harvested and allowed to ferment in silos. The drought has even impacted the ability to convert corn into silage, Hayhurst noted. More acres are required to get the same amount of silage.
And some corn, because of dry conditions, contains too much nitrogen to be safe for animals to eat, he said.
“All these factors start kicking in and causing the problems and start building on one another,” Hayhurst said.
“Right now, we’re in the fear-driven side” of the livestock market, Hayhurst said.
“Everybody’s afraid what [prices] might end up doing. We don’t know where that outcome is. The good Lord’s the only one that knows that.”
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