August 25, 1999 | By: Haven Miller
LEXINGTON, KY

With pastures drying out, Kentucky cattle producers are asking tough questions: Should I sell? Should I buy more feed? Should I wait a while before making a decision?

For some, the answer is obvious.

"If you're out of drinking water for your cattle, you've got little choice but to sell," said Lee Meyer, Extension livestock marketing specialist in the University of Kentucky College of Agriculture. "On the other hand, if you're not in a must-sell situation, you shouldn't panic – you've got some options."

Meyer said the key to management during drought is to avoid letting short-term decisions hurt long-term prospects for making money.

"If you've decided to sell, certainly the open cows go first, and then the steers," Meyer said. "Keeping replacement-quality heifers will position the farm to take advantage of improving prices brought on by the turning cattle cycle. But a lot of producers may be better off buying feed now because corn is fairly cheap."

In deciding whether or not to sell soon, Meyer said producers should look at what their calves are gaining, and calculate whether or not the rate is high enough to keep feeding them.

"If your calves are only gaining a pound a day, that's about 60 pounds over two months, or only about 10 dollars of value as fall prices decline," Meyer said. "At that rate, it will cost you more than 10 dollars in feed to keep those calves, so it might be wise to sell them." If you're calves are gaining as much as two pounds per day, Meyer said the situation is different.

At two pounds per day, those calves will be worth 30 or 40 dollars more per head, meaning you can afford to put decent feed into them, either winter hay or purchased feed," he said.

Meyer said producers concerned about Kentucky cattle possibly flooding the market during drought and lowering prices shouldn't worry. "The feeder cattle market is a national market," he said. "Kentucky supplies less than three percent of that market, so even if we increase our marketings dramatically there won't be a noticeable impact on overall prices."

Nationally, feeder cattle markets are strong. Prices currently are $6 to $10 per hundred weight higher than last year. Meyer said prices tend to decline about five to eight percent going into the peak selling time of October and November. He said these are normal declines that are not caused by drought-induced selling. He also said declining national brood cow numbers will bring higher prices over the next few years, and he is concerned Kentucky producers will cut back their herds just when they should be expanding and miss the profitable years expected soon.

Farmers with Internet access can get information on dealing with drought conditions by logging on to the UK Agricultural Economics web site at http://www.uky.edu/Agriculture/AgriculturalEconomics/hot.html.

Contact: 

Writer: Haven Miller (606) 257-3784
Source: Lee Meyer 606-257-7276