Drought Aftermath: Long-term Decisions Part 2: Drought Management
Making difficult decisions in the wake of a drought By Lisa Bryant, Communications Specialist A drought can bring some tough decisions to your doorstep, and those choices can impact your operation for decades to come. Do you feed through it? Do you sell off? What does this mean for next year? We asked two cattlemen to help discuss the dilemma producers face. On page 24 of the July/August issue, we began the dialogue with some issues impacting ranches during the drought. In this part of our Drought Management Series, we’ll consider options that will impact your operation for years to come and help you make good decisions to set yourself up for recovery. We asked Colorado rancher Joe Hatch and Nebraska feedlot owner and cattleman Craig Uden some pressing questions and they’ll share their advice below on drought recovery. If you are in a drought now, your grass is probably short, your hay supply may be low, feed prices are suffering from inflation and your options are becoming more limited as we set up for fall and winter. Most livestock experts say it never pays to feed through a drought, but is that the right decision in 2022? Do I feed through a drought? The decision to supplement your cattle can vary, Hatch said. “From an individual business standpoint, think about your financial position. If it’s really good and you have the cash, you can feed cows,” he said. However, with interest rates climbing, he cautions producers to be careful on how much they borrow.
A calf’s growth is dependent on cattle being managed on an inclining plane of nutrition, and if a drought disrupts that, cattle producers will not see calves that perform to their genetic potential and carcass results will often disappoint.
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RED ANGUS Magazine | September 2022
“We are willing to feed cows a little more than we would have been the past two or three years because of where we are sitting in the Craig Uden Joe Hatch cattle market cycle. In the next couple of years where inventory is really declining, calf prices and bred cow prices are going to get pretty high, so we feel like this might be a drought where we could feed hay and it would be a good decision. Most of the time, trying to feed your way through a drought is not a good decision,” Hatch said. “But, we are possibly a year away from record high prices, so you might be able to spend a few hundred dollars a head on hay and end up with a few thousand in a short time if you can make that work from a cash flow standpoint.” Should I keep or cull? “If you sell out all your cows in a drought and so do all your neighbors, you’re going to have to sell them at a discount and buy them back at a premium because that’s what everybody else is doing,” Hatch said. He is anticipating higher cow prices, but a continued climb in interest rates. “If you’re going to lock yourself into a fiveyear fixed loan on cattle, I think you really need to look at what calves will be going for in the years forward and run an amortization calculator to make sure you understand what the interest is going to cost on those cows.”