Livestock Producers Face Tough Decisions during Drought

Alabama livestock producers are considering ways to manage costs during this drought just as producers in other regions of the country are. Many may be considering selling calves early to reduce herd numbers. But Harlan Hughes, an emeritus professor of economics at North Dakota State University, says optimal drought strategies may depend on when in the cattle cycle the drought is occurring.

Dr. Walt Prevatt, an economist with the Alabama Cooperative Extension System, agrees.

“Calf prices are high now so it may make more sense to hold on to those calves and feed them,” says Prevatt. “Then producers will be able to sell heavier calves at higher prices.”

In this drought, there are high calf prices, projected higher prices for bred cows and projected lower replacement prices after the drought.

That means the optimal drought strategy for 2006 probably isn't the same as the optimal drought strategies for past droughts.

Hughes recommends producers separate de-stocking decisions from depopulating decisions. De-stocking, a production decision, means removing cattle from pastures, while depopulating is an economic decision and concerns selling cattle. They are different management decisions that are affected by different variables.

Posted by at July 11, 2006 02:01 PM | TrackBack