The 2012 drought proved too much for countless acres of row crops to handle last year. As farmers were forced to watch their dying crops starve from no moisture, livestock producers saw the writing on the wall. And early last fall, Kansas’ Brookover Feed Yards Manager Brian Brice knew it was just a matter of time before feedyards would be in the red.
"The margins right now are negative," Brice told AgDay in September. "They’ve been negative all summer with losses up to $200 to $300 a head."
2012, combined with the drought in 2011 that gripped much of the Plains, created losses so steep. Iowa State University Livestock Specialist Shane Ellis says liquidation became some producers’ only option.
"As pastures become in worse condition, forage becomes a little tighter and producers are basically forced into the decision of culling heavier than they normally would," Ellis says.
According to USDA’s January Cattle Inventory Report, the nation’s calf crop has now dwindled to the smallest since 1949.
"The cow/calf operation is the engine behind the beef industry," Ellis says. "And if you’re not producing the calves, you’re not going to have the engine of your industry revved up and going."
The situation proved too much for even meat processors to handle. Cargill announced in January it would have to temporarily close its Plainview, Texas, plant until ranchers are able to rebuild their herds.
The pasture wasn’t any greener for hog producers last summer and fall. Iowa hog producer Todd Wiley had crunched the numbers in October to prepare for the tough road ahead.
"When I take all the numbers and put them together, we’re losing right at $57 per pig, today," Wiley told AgDay.
Just like the cattle industry, pork producers were forced to make a difficult decision.
"For many operations, they’re pulling back into survival mode and cutting back on sow numbers and holding things back as much as they can, because they know for every hog they are producing, they’re going to be losing a tremendous amount of money," Ellis told us last fall.
Despite heartaches in the record books, Wiley says tough times have helped pork producers be resilient.
"I think for the most part, we’re better managers than we were," Wiley says. "We take care of business down the road a little further than we used to. And so, I’m hopeful that the damage, while it will be hard while it lasts, I’m hopeful it will be relatively short-term."
According to USDA, half of all livestock production was located in severe or worse drought last year. The department says poultry farms were the least likely to be in areas affected by drought. However, turkey producer Katie Olthoff lives in the middle of drought-stricken Iowa.
"We’ve tried really hard to minimize our inputs in other areas and tried to be very efficient and use the best management practices possible, so we can make sure that we have big healthy birds going to market," Olthoff told AgDay in October. "And then that’s going to help minimize any losses for us."
Some elements were out of her control, like the scorching heat.
"Overnight one night, we lost 5% of one flock, which is a pretty good loss for us," Olthoff says. "And that’s because it just didn’t cool down, and the heat was really hard on them."
Overall, the livestock outlook continues to be dampened by high feed costs and lower production.
The latest National Ag Statistics Service (NASS) report shows total cow/calf numbers are down nearly 2%. States like Texas, Oklahoma and Missouri continue to see depleting herd sizes. And the total cattle inventory doesn’t paint a promising picture at the lowest level since 1952.
Ellis says it could be 2016, at the earliest, before "normal" enters back into beef supply conversations.
"Looking forward, if we were to have good years from here on out, I would not expect us to have an increased calf crop or an increased number of cows giving birth until 2015," Ellis says. "And if you roll that on through as far as supplies of beef, we're looking at 2016 or 2017 before we actually start having an increased animals going to slaughter and then availability in beef actually increasing."