Last summer’s blistering drought gave cattle producers plenty to talk about at the Cornbelt Cow-Calf Conference this weekend.
This year, the conference was geared toward looking at different options relative to Iowa’s variable weather, said Byron Leu, CCCC steering committee member and ISU Extension beef program specialist.
Astoria, Ill., producer Steve Foglesong told cattle producers to “think outside the box.”
“They need to make decisions they would not normally make when addressing high feed costs and shortages of hay,” Leu said.
In addition to eight presentations covering everything from confinement feeding to pasture to cover crops, attendees could meander through 48 exhibits to see the latest equipment and chat with area farmers.
Dr. Lee Schulz, assistant professor and extension livestock economist at Iowa State University, said cattle farmers are smart and easily able to adapt during drastic circumstances.
“But they should be ready if dry weather persists to make some decisions,” Schulz said.
A worrisome outlook from John Deere
John Deere Ottumwa Works general manager Andy Hansen presented John Deere’s outlook on cattle economics Saturday afternoon.
“This drought may not be unprecedented, but it’s serious, serious business,” Hansen said. “Feed prices are higher and corn prices are going to be through the roof at least until next fall and maybe beyond if we have another summer as dry as this last one.”
Another scorching summer could force farmers to feed hay earlier and haul water to the herds, and herd liquidation could cause prices to decline, he said.
Cattle producers are also struggling with shipping costs since the Mississippi River is so low.
“There’s not enough water in the Mississippi to get barges all the way down to New Orleans,” Hansen said. “Federal mandates say there has to be 9 feet of water in there at all times and 40 feet at the mouth, but the [Army Corps of Engineers] is struggling to make that happen.”
Therefore, feed that has to be exported must be trucked to New Orleans, which is much more expensive than using a barge, which can hold 100 rail cars of grain, Hansen said.
He said “it’s a completely different world now that China has 4 million people in its middle class.”
This means there is now a greater demand for beef, pork and grain stocks from China, he said.
This year, corn prices are expected to average $7 per bushel for the 2012-13 crop year, he said. Wheat prices are expected to stay strong and will be driven by strong overall grain prices and poor winter wheat weather, he said.
“If — and that’s a huge if — we get normal amounts of moisture this year, that will take a lot of pressure off these prices next fall,” Hansen said.
In terms of ethanol, Hansen said it’s dangerous when the federal government mandates a particular solution.
“I would a lot rather them incent something around improving energy efficiency rather than mandate ‘X’ amount of gas has ethanol in it,” he said.