Natural Gas Shortage Forces Feedyards to Reformulate Feed, Packing Plants Pause Production 

The energy crisis in Texas is now a battle residents have faced for consecutive days. With several days of record cold temperatures, the strain on natural gas supplies are amplified right now. And as residential and electrical needs are prioritized for natural gas supplies available, the shortage is cutting into production for major food suppliers like the feedyards.

“Late on Friday, the Texas Railroad Commission basically put out an order to prioritize the top two uses of natural gas, one being human resource needs, the second being natural gas as supplies electrical generation facilities,” says Ben Weinheimer, vice president of Texas Cattle Feeders Association.

Photo Credit: Madeleine Bezner, Texas Cattle Feeders Association 

Weinheimer says Texas Cattle Feeders immediately started having conversations with state officials and gas companies. While resources needed to meet human needs took priory, Texas Cattle Feeders also had their own priority: taking care of animals during the record cold.

“Our feedyard members predominantly use steamed flake corn to include in their rations, which requires the use of natural gas boilers,” adds Weinheimer. “The initial accommodation that our members have been able to make is to idle those boilers back to a point where they're on low fire, essentially to keep everything from freezing up, and then switch over on a temporary basis here to dry rolling or cracking corn.” 

The adjustment wasn’t small. Texas Cattle Feeders Association represents feedyards spanning across Texas, Oklahoma and New Mexico, with members feeding about 6 million head of cattle, or 28% of the nation's fed beef.

“Essentially, it's affecting all of our membership areas,” he says. “Since our feed yards are well located throughout Texas, but predominantly in the Texas Panhandle and South Plains, which includes the Oklahoma Panhandle in western Oklahoma, and then on into eastern New Mexico, a lot of that region is on the same natural gas distribution system. And it's also on the same electrical grid for the for the western U.S.”

The Texas Cattle Feeders Association says while the temperatures have been frigid, the winds have been calm with not a ton of wet snow in their area. That combination has made it a little easier to care for cattle despite the record cold temperatures.  It’s the natural gas shortage that’s making the situation so unique.

Weinheimer says it’s been a constant balancing act with nutritionists at the feedyard to make sure the ration adjustments still meet the energy and nutrient needs of the cattle.

While some in the cattle industry know the switch from flaked corn and wet distillers to feeding cracked corn was a necessity, they fear there could be a huge increase in cost of gain.

“I think largely, you will look at it as a fairly short-term impact,” adds Weinheimer. “In the big scheme of things, cattle will be able to recoup some of that loss of gain here in the weeks and months going forward. It definitely depends on where they're at in that in the feeding period, cattle that are headed to harvest, you know, in the next week or two, it's going to be much more difficult to get those additional pounds back here the next few weeks. But beyond that, over the next three to four weeks I think we could definitely see things start to level back out to normal.”

“From a feedlot standpoint, how this is going have an impact on the cattle is still unknown,” says Derrell Peel, livestock specialist at Oklahoma State University. “I think it probably won't show up here for a week or two, but we'll start to see some of these really heavy carcass weights we've had, those will probably finally come down as a result of that. And certainly there's been some movement disruptions as well. It's hard to move cattle around in this kind of weather.

Packing Plant Problems
 

Some of those cattle may be held at feedyards a little longer. That’s as reports show some packing plants in the Texas Panhandle are having to shut down, which include suspending production at Caviness Beef Packers and Tyson for the time being.

Drovers reported Tyson Foods said in a statement, “To ensure the safety of our team members and animal welfare during this period of extreme weather and comply with energy restrictions, we have temporarily suspended or scaled back operations at some of our locations. We are in close contact with energy companies to minimize disruption and fulfill customer orders.”

While several packing plants are facing natural gas shortage issues, the rolling temporary energy blackouts are also causing hiccups on the packing plant lines. However, compared to the severe packing plant disruptions the industry faced this past spring during the pandemic, this is fairly short-term.

“I guess we all know in terms of supply chain disruptions that we can call this one very short term,” says Weinheimer. “And thankfully, it's a five day or six day weather issue, and given what we've dealt with in terms of supply chain disruptions eight or nine months ago,  this is very short term and something that I think we'll see the whole supply chain get back on track here just in a matter of days.”

Personnel as a Priority

Weinheimer says it’s not just animals having to suffer through the extreme cold. He says Texas Feeders are also trying to keep their employees safe, many of whom are putting in extremely long days, some even staying through the night to make sure the cattle have water available. He credits those individuals for keeping the feedyards operation rolling and pivoting so quickly to adjust feed needs.

“Our people are pretty good about knowing how to scale cattle up and down on those different types of rations,” he says. “So, while we're definitely expecting to see a performance decrease, we don't expect to see, you know, a tremendous increase in morbidity or mortality.”

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Feedyards, Packers Disrupted By Weather and Energy Shortage