“It would be much less expensive to just get out and come back later,” said Dr. Larry Redmon, Texas AgriLife Extension Service state forage specialist. “And that’s the message that we’re trying to convey.”

Many livestock producers have already tried to cut feeding costs by extensively culling their herds, but have held onto enough cows to rebuild their herds if the drought passes, he said.

In some dry years, that might be a good strategy, but not this one, Redmon said.

“It’s unprecedented,” he said. “(We’ve had) the 12 driest months in Texas history, and there’s just not many ways to combat that.”

With grazing and hay supplies next to non-existent in many areas of the state, it’s getting very expensive to buy feed. On average, it’s costing producers “somewhere around a $100 a month to have these animals (cows) stay in the pasture and feed them,” he said.

Another choice is to move cattle elsewhere, most likely another state during this drought, and lease land where there is grazing, Redmon said.

“It could be western Mississippi; it could be eastern Louisiana; or it could be maybe Missouri,” he said. ‘I haven’t talked to anybody this year, but in the past couple of years people have called me from other states and they’ve quoted prices of $20 to $22 per (cow/calf) pair per month. Even assuming that’s $25 or $30 that’s still a far, far cry from $100 a month.”

Of course, one has to add the cost of hauling a trailer load of cattle to the leased grazing, but even with that added cost it still cheaper than trying to buy hay and feed at today’s prices, he said.

“It’s probably going to be $3 to $3.50 a loaded mile –something like that,” he said. “If you just put all that together … the savings could still be tremendous if a person could find a place to put those animals.”

But completely selling out makes more sense yet, Redmon said, given there’s no guarantee this drought will end anytime soon.

“Some people would counter and say it’ll cost more to come back into the business later because conditions will have improved, and more people will be getting back in,” he said. “That’s true. But again, looking at the difference in what it would cost to buy cows and come back in at some later date — versus what they would spend trying to go through this drought — mathematically, it’s just a no-brainer.”

More information on the current Texas drought and wildfire alerts can be found on the AgriLife Extension Agricultural Drought Task Force website athttp://agrilife.tamu.edu/drought/.

AgriLife Extension district reporters compiled the following summaries:

Central: Northern parts of the district received from 2 to 5 inches of rain, but conditions remained largely unchanged. Sale barns were full each Saturday. Cattle were getting thin. All livestock producers were heavily feeding. Hay and water was in short supply. Farmers continued to harvest crops worth harvesting. Many crops were being zeroed-out for insurance purposes.

Coastal Bend: Though light showers were reported in some areas, extreme drought conditions persisted. The cotton harvest was ongoing. Livestock producers continued to sell off herds due to lack of forage. Most watering ponds were dry. Some water wells were also going dry, and some producers were drilling new ones. Many trees were dying or showing signs of drought stress.

East: No rain was received, and the drought worsened. Water levels in stock ponds and creeks were dangerously low. Many trees were dying or going dormant early. Hay was no longer being harvested. Producers were searching for hay to buy. Out-of-state purchases were becoming more common. Ranchers continued culling and selling off herds. Livestock began to show signs of obvious weight-loss.

North: Soil moisture was very short over most of the area. Daytime highs of 100-plus degrees and nighttime lows in the mid-80s continued to be the norm. A few areas received some rain, which might improve pastures if they are not overgrazed and given time to regrow. Without rain, most pastures continued to go downhill. The corn and grain sorghum harvests were nearly complete with yields reported to be slightly above average. Soybeans – those that survived the drought — were also being harvested. Some soybeans were cut for hay and the rest were being plowed under. Corn and milo stalks were being harvested as hay and shipped all over the state. Where there was hay, it was being sold before it was cut. Once baled, hay was being loaded on trucks and shipped out before the baler got cold. Most livestock producers were feeding hay and supplements to cattle. With heavy supplemental feeding and short hay supplies, producers continued to cull their herds and were scrambling to find hay for immediate feeding and for winter. Some livestock producers were selling out. Water was becoming a major concern as ponds were getting very low. Hay producers hoped for late August or September rains so they could possibly produce one more cutting. Trees were dying from the record heat and lack of rain for over 60 days in most areas. Rangeland and pasture conditions were very poor.

Panhandle: Most of the region received scattered showers and cooler weather. Accumulations ranged from a trace to 1.5 inches. The rain and cooler weather was welcomed, but it was not enough moisture to help the very thirsty crops. Soil moisture levels remained very short. Irrigators were watering full swing trying to keep up with water demands. Gray County received hail along with the rain, which stripped the leaves off some cotton and corn. Also, high winds toppled six pivots in that county. The rain greened up some pastures, but more was needed to really make a difference in the very poor conditions. However, the cooler weather did ease water needs and heat stress on cattle. Supplemental feeding of livestock continued. Producers who were trying to hang on to their cattle were buying hay form other states, with hauling costs running $20-$30 per ton.

Rolling Plains: Rain! But the amount varied greatly from county to county. Throckmorton County received from 0.5 inch to 3 inches of rain, while Stephens County received from 0.5 inch to 5 inches. Haskell County received as much as 2.8 inches. Other counties received from 0.1 to 0.8 inch. However, the majority of counties did not receive any measurable moisture. The rain was no help for cotton producers, though it did help wheat growers who would like to plant in September. More moderate temperatures, especially nighttime lows, helped relieve stress on livestock. Cotton was fruiting, but even under heavy watering, fields still looked weak. Producers were weaning and selling calves. Some producers are selling or shipping their cows to out-of-state grazing. Hay was scarce and expensive when available. A few hay producers hoped to have a late-summer cutting. Large trees were beginning to show the effects of too little moisture.

South: Record-high temperatures continued. In Webb County, temperatures of 104 and higher were reported. Some daytime highs reached 108 or even 110 degrees. Rangeland and pastures further declined, forage supplies and stock-tank water levels dropped. Many livestock water tanks had already completely dried out. In Live Oak County, there were record numbers of livestock sales at sale barns. The heaviest livestock culling was taking place in Webb and Zavala counties, where ranchers have completely run out of water resources. Also, feed sources in those counties were very scarce. The western portion of Frio County received 0.5 to 1 inch of rain. Also in that Frio County, the corn harvest was completed, the cotton harvest began and the sorghum harvest was ongoing. Most crops in Jim Wells County were harvested, and fields were ready for fall and winter preparations. In Zavala County, farmers were preparing land for cabbage and spinach planting, and pecan producers were irrigating orchards in the critical kernel-development stage. In Hidalgo County, the cotton harvesting was winding down. In Starr County, farmers were planting sugarcane and fall vegetables. In Willacy County, harvesting of late-planted cotton continued.

South Plains: Some areas received as much as 3 inches of rain. Others got none. The remaining cotton is from two weeks to a month ahead of schedule; and the final stages of flowering or in cut-out. In other areas, cotton was shedding bolls and squares from lack of water. Of the 42,000 cotton acres planted in Garza County, only 8,000 remained. Many producers were planning on an early harvest. High temperatures dropped into the 90s. Most counties were still under burn bans. Some growers chose to dig and harvest peanut vines for hay due to the low pegging rate. White grapes in Yoakum County were harvested, and red grapes were expected to be ready by the end of August. Cattle producers were selling off herds because of shortages of grass, hay and water.

Southeast: The extreme drought did not budge. The month of July closed with a nearly 22-inch rainfall deficit for the year in some parts of the region. Some areas had scattered showers. Grain sorghum and rice fields were being baled and sold for livestock forage. Early July had brought some light rains that allowed for re-growth of grain sorghum. But tests showed very high prussic acid levels. People feeding this forage to livestock were cautioned to test all sorghum grass species before grazing or feeding as hay. Pond levels continued to drop. The condition of cattle continued to decline with the as pastures worsened. Cattle sales were up. Some infestation of red rice was reported in the rice crop.

Southwest: Sporadic showers brought 1 inch to 2 inches of rain to some areas, but most of the region remained completely dry. High afternoon winds created dust storms. Record high or near-record high temperatures of over 100 degrees aggravated the drought. The region remains in wildfire-alert status. Many stock tanks were dry. Forage availability remained well below average for this time of the year. The cotton, watermelon and cantaloupe harvests were all ongoing. Some farmers planted sweet corn for an early fall harvest. Peanuts, pecans and landscape nursery crops continued to make good progress wherever irrigation water was still available. Ranchers were providing supplemental feed for livestock.

West Central: Extremely hot, dry conditions continued. Wildfire dangers remained very high. Some areas reported scattered showers, but not enough moisture was received to make a difference. The heat has destroyed almost everything planted, including gardens. Rangeland and pastures were in poor condition. Trees in pastures were dying at an alarming rate. Stock-water tanks were very low or completely dry. Ranchers were hauling water to most livestock. Hay supplies were very limited. Producers continued to cull livestock herds. More and more livestock producers are selling out. 

Photos courtesy of Texas AgriLife Extension Servive, Robert Burns.

Top right: Desperate for hay, the owner of this baler and tractor was trying to harvest a parched field of grass on a neighbor’s property in East Texas. A spark from the baler ignited hay inside, and the resulting fire spread to more than 100 acres. No houses burned, but the operator lost both machines plus his pickup truck, which was parked nearby, according to witnesses.

Middle left: Dr. Larry Redmon, Texas AgriLife Extension Service state forage specialist, during times of better grazing in East Texas.

Bottom right: The 12 Texas AgriLife Extension Service Districts.

In the Columbia Basin, harvest timelines are running between two and three weeks later than usual. First cutting of alfalfa in the Southern Basin began the last week in May and ended mid-June. Early first cutting was rained on heavily, and damaged hay was either sold directly to area dairies or green chopped.

It’s expected that all of the first cutting in the Southern Basin received at least some rain. Growers in the Northern Columbia Basin completed first cutting during the second to last week of June. It is estimated that between 75 and 80 percent of the alfalfa in the Northern Basin was rained on. Overall, yields were average to above average, but quality was off due to rain damage.

At the end of June, prices for new crop alfalfa in the Columbia Basin were running as high as $260 per ton at the stack for supreme quality. Prices for premium alfalfa were between $225 and $235, and between $215 and $225 per ton for good quality at the stack. In some cases, even fair-quality alfalfa traded above $200 per ton and lower-quality, rain-damaged hay sold for $150 per ton.

Second cutting in the Southern Basin began the last week in June and harvest will be in full swing by the first week of July. As the weather warms, there is some thought that the season will improve. Although growers north of I-90 advise they’ll be limited to three cuttings, hay producers in Othello and Mattawa have indicated the possibility of four.

The market for timothy hay was strong last year, and growers are expecting another year of profitable prices. Most growers in the Columbia Basin completed first cutting timothy during the last week of June, and Kittitas Valley producers should be mostly wrapped-up with first cutting the first week in July.

Interest in timothy is reportedly picking up, with prices mainly between $240 and $265 depending on quality. USDA Market News reported the sale of 600 tons of premium quality timothy at $280 per ton for export.

In Idaho, first cutting of alfalfa was delayed two to three weeks, and rain and cool weather continue to hamper the crop. Any hay cut prior to June 10 was rained on heavily. Second cutting will begin the last week in June. Due to the delay, predictions are that the area is likely to lose one cutting this year, and overall yield will be down 1.5 tons.

Alfalfa is in high demand from dairies, and at the end of June first-cutting supreme-quality alfalfa was selling between $220 and $240 per ton at the stack. Although prices for supreme-quality hay had reached upwards of $260 per ton for early first cutting, dairies are mainly resisting prices above $250 per ton despite limited supplies.

Premium hay had been selling between $225 and $235 per ton, and good hay for near $210 per ton. Low-quality rain-damaged hay sold for $145 per ton. For perspective, premium-quality hay sold for $150 per ton in December 2010.

Harvest timelines are running a week to two weeks behind in Oregon’s Klamath Basin. As of the last week in June, first cutting was between 75 and 85 percent complete. Yields were reported below average, and the area experienced some fairly significant rain on June 28.

A number of growers had not yet begun their first cutting, but planned to be in the field by July 1. (The cool weather allowed these growers to avoid the rain without the crop becoming over mature.) Prices in the region’s hay market were just being established, but USDA Market News confirmed the sale of 400 tons of supreme alfalfa for $250 per ton at the stack at the end of June.

Anecdotally, premium-quality hay had been priced in the $220 to $230 per ton range, and feeder hay between $190 and $200. The Klamath Basin is seeing strong demand from both in- and out-of-state buyers looking to secure inventories.

Primarily the market for first-cutting alfalfa is being driven by dairy demand. With hay acres down across the Northwest and expected lower yields on this year’s crop, dairymen don’t expect prices to soften much during the year. Because many dairies have been forced to buy hay hand-to-mouth, the supply gap between the end winter and first cutting 2011 meant that some dairies were almost out of hay.

At this point, higher milk prices are allowing dairies to cash-flow higher hay prices, and dairies that are desperate for hay are willing to buy at nearly any level of quality to lock up needed supplies.

Generally, exporters are taking a cautious approach to the market, not wanting a repeat of 2008 when prices got so high buyers backed-off. Many exporters were forced to write down high-priced hay inventories when the hay market crashed. Although exporters are anxious about procuring needed supplies, the price of first cutting is too costly given the low quality.

Instead exporters are focused on second cutting, which they hope will be of higher quality. A risk, though, is that if prices remain high and the Northwest is unable to produce a consistent supply of high-quality hay, export customers may turn to other markets for hay.

Good news for Northwest exporters is that the market is strong. According to the most recent data available from the U.S. Department of Commerce, Northwest hay exports rebounded strongly between December 2010 and March 2011.

Last summer began a trend where California hay exports exceeded those of the Northwest (for the first time ever). Referencing the graph below, hay exports from the Northwest in March were up 26 percent from February, and 35 percent year-over-year.

Exports to Japan from the Northwest were up 19 percent year-over-year in March and exports to other countries were up 58 percent. With respect to Japan, concerns over the impact of the tsunami on Northwest hay exports, so far, have proved unfounded.

Japan remains in the market for hay. Recognizing the tight supply situation this year, Japanese buyers have been fairly aggressive in negotiating for hay. Another positive factor is that China’s domestic supply of hay is down this year.

Overall, prices in Northwest alfalfa market are expected to maintain traction due to lower yields and fewer acres in production in 2011. Northwest dairies and exporters will compete heavily for second cutting, and California dairies and exporters are likely to enter the market searching for additional supplies of hay.

The significant hay shortage on the West Coast will likely find only limited relief as additionally new crop alfalfa becomes available. The reality is that supplies are tight, and weather for the remainder of the season will ultimately dictate how short the crop really is.  FG

—Source: Northwest Farm Credit Services newsletter, July 2011

Graphic courtesy of Northwest Farm Credit Service
Graphic sources: U.S. Department of Commerce, Hoyt Report, and USDA National Agricultural Statistics Service (Northwest average alfalfa price includes Idaho, Oregon and Washington)