Signs of market improvement for cattle producers

Texas cattle producers should expect far better market conditions in 2021 despite recent disruptions and losses, according to Texas A&M AgriLife Extension Service experts.

David Anderson, Ph.D., AgriLife Extension economist, Bryan-College Station, said the Texas cattle market is recovering from the week-long winter storm and is still slowly rebounding from COVID-related price declines between March and July of last year. However, conditions appear to be aligning for producers to see price gains after all the turmoil.

Winter storms cause disruptions to the Texas cattle market each year, Anderson said, and despite the severity and duration of Winter Storm Uri, the market is expected to rebound similarly as logistics return to normal and herd health improves.

“We get winter storms every year, so we often see market disruptions due to weather,” he said. “If we get a storm in the Plains, and we can’t move cattle from feedlots to processing plant, you get a price disruption. If there are big storms in population centers like Chicago or the East Coast, and people aren’t able to go out to restaurants for a few days, it can disrupt prices. But those types of disruptions don’t last long.”

The winter storm caused widespread backups in the movement of cattle through the logistical supply chain from the producers’ inability to move cows to market. Trucks were also unable to deliver processed meat to grocery stores and consumers stayed home to avoid icy roads. Normalcy returned as the various links in the supply chain began moving.

For instance, cattle processing was down 54,000 head the week of the storm, but rebounded by 114,000 head the following week, Anderson said. 

Cattle producers recovering from losses

Texas cattle producers’ recovery from the winter storm will take time, but Anderson said expected beef price increases through 2021 could reduce the long-term impact.

“Some producers lost cows and calves, and most fed a lot more hay and supplements to keep their cattle warm,” he said. “So, if ranchers doubled their ration of hay over the duration of the storm and you multiply that times the Texas herd of 4.7 million cows, then you’re talking a big number.”

Anderson’s conservative estimate of statewide livestock losses is $228 million, which includes sheep, goat, dairy and broilers. Ranchers also likely incurred damages to their operations, including equipment and water systems, and higher costs associated with extra hours and effort spent to help their herds survive.

There was also concern about the cost of weight losses and recovery, Anderson said. Animals were burning rations to stay warm rather than growing and adding weight during the frigid conditions.

Live weights for Texas and Oklahoma steers were 1,361 pounds before the storm compared to 1,251 pounds the week of the storm, a notable drop. Anderson said he expects weights post-winter storm to rebound, but weights may stay below last year. 

Ron Gill, Ph.D., AgriLife Extension beef cattle specialist, Bryan-College Station, said the extremely low temperatures, snow and freezing rain will cause some weight losses in cattle. However, those type of losses are comparable to a heavy rain event causing mud bogs that cause cattle to expend more energy for movement, while cold and muddy compounds losses.

Gill expects some ranchers will experience lingering effects, such as calves born during the storm showing signs of lung development issues or frostbitten ears, which can cause discounts at sale barns. But he believes the majority of ranchers avoided severe losses because most operations prefer to schedule calving before and after February.

“South and East Texas are predominantly fall and winter calving, so most were on the ground by the end of January, and then others start a few weeks into March,” he said. “So, I think most cattle producers avoided major losses, but they still incurred higher costs and might have some lingering issues with individual animals.”

The winter storm’s effect on wheat grazing potential could also impact input costs more, Gill said.

Better than last year

Overall, Gill and Anderson said Texas cattle producers are better off than a year ago. COVID-19 caused a string of disruptions from restaurant closures to processing plant shutdowns that caused beef prices to nosedive.

Anderson said fed cattle prices were $94 per hundredweight by July compared to $119 per hundredweight this time last year. Fed cattle prices have continued a steady recovery to $114 per hundredweight after ending 2020 at $110 per hundredweight. 

Both Anderson and Gill expect fewer cows and calves to be available throughout 2021 as the Texas herd contracts. That, combined with improved restaurant demand as COVID-19 vaccinations increase, could help prices maintain upward momentum.

“As far as inventory, we’re meeting demand, so we can serve our export demand, which helps producers, and supplies won’t be so high that they hurt domestic prices,” Gill said. “We’re in a much better position than last year because the system is working. That was the big issue with the COVID-19 disruptions, which had a much bigger impact than several days of weather disruptions.”       

AgriLife Extension district reporters compiled the following summaries:

CENTRAL

Warmer weather with highs in the 70s and low 80s brought much-needed relief after below- freezing temperatures. Wet conditions continued and slowed fieldwork. There was some standing water in low areas. More wet weather was in the forecast and could put corn planting a little behind schedule. Producers were still trying to assess how much of the oat crop was lost. Some crops were recovering steadily following the deep freeze. Some showed green near the ground, so they may survive, but other fields looked totally dead. Winter wheat exposed to almost three continuous days of subzero temperatures was shedding damaged tillers. Closer examination over the next week should confirm the extent of plant injury and recovery. Wheat should enter jointing stage once warmer temperatures resume. Producers worked to repair water lines and wells and get water back to livestock. Cattle were in fair condition with supplemental feeding. There was some concern that bale availability may tighten a bit due to high demand and some winter forage losses from the freeze.

ROLLING PLAINS

Temperatures warmed. Winter wheat conditions were poor to good with areas starting to show more damage from the freezing temperatures. Cattle producers continued supplementing cow/calf and stocker operations with protein supplements and hay where forages were limited.

COASTAL BEND

The effects of the winter storm and freeze were still being monitored. Preparations were made for the freeze, but the region was not set up for an extended freeze event. Many producers spent several days repairing equipment and water systems that froze. Soil moisture levels were good after prolonged dry conditions, and temperatures were warm enough for corn to germinate. Some fieldwork took place, including fertilization, spraying for weeds, and planting and replanting corn. Some planned corn acres shifted to grain sorghum. More corn and sorghum will be planted soon if fields remain accessible. Some possible benefits of the freeze include setback or suppression of huisache trees and brush. Ryegrass and clover pastures were recovering, but oat pasture recovery remained in question. Some cattle losses were reported. Cattle also lost some body condition with the cold weather, but most calves were still doing well. Hay and protein were being fed to livestock, but hay was in short supply. The cattle market remained steady.  

EAST

Recovery from the severe winter weather began. Freeze damage was evident on ryegrass and cool-season forages. Hay was in short supply across the district, and where it was found, prices had increased. Many crops were damaged or lost including vegetables, citrus and blueberries. Trees took a hard hit as well. Rainfall made the ground saturated. Pasture and rangeland conditions were fair to poor. Subsoil and topsoil conditions were adequate to surplus. There were many cattle losses in the region, otherwise, livestock were doing fair to good with supplemental feeding taking place. Wild pigs caused damages in several counties. 

SOUTH PLAINS

Moisture conditions improved slightly over the past couple of weeks with the recent snowstorms. Farmers were assessing damages to their irrigation systems from the recent cold snap. Wheat was in poor condition due to drought conditions. Cattle were still on supplemental feeding and will be until spring grasses start emerging.

PANHANDLE

Most of the district reported short to very short soil moisture levels, but northwestern areas reported adequate soil moisture. Pasture and rangeland were poor to very poor. Oats were in fair condition.  Winter wheat was in poor to fair condition. The cold temperatures burned most above-ground leaves on wheat. Wheat growing points and crowns were still viable in some fields, and damage should not hurt wheat yield potential. Top-dress fertilizer and mid-season weed control on wheat began. Cattle were receiving supplemental feed on rangelands. Most cattlemen were continuing to feed cake, minerals and hay to sustain cattle and newborn winter calves. Stocker cattle gains were back on track after the cold blast. 

NORTH

Temperatures were warmer. Soil moisture levels were surplus to adequate across the district. A line of thunderstorms delivered 1 inch of rain after snow melt off from the winter storm. Additional rains left soils saturated in some areas. Warmer temperatures and sunshine helped start drying fields enough to access. Wheat fields were negatively impacted by the winter storm. Many fields were freeze burned but not as bad as expected, and the crop should recover. Some producers reported calf losses but also some cows. One producer lost two show pigs. Most producers had to purchase additional hay. Some honeybee losses were reported as well as dead birds. Exposed poultry and sensitive vegetable crops were hit hard but could have been worse. Some producers reported sheep and goat losses.

FAR WEST

Temperature highs were in the low 80s with lows in the upper 20s. No precipitation was reported. Nonstop wind and gusts of up to 30 mph likely depleted any soil moisture delivered by the winter storm. Livestock were in overall good condition despite grasses and rangelands worsening. Pecan acreage was expected to stay the same other than trees that were transplanted. Effluent water from the City of El Paso was being used on a small scale at this point and, eventually, Rio Grande river water will be released for irrigation. Some last-minute tree pruning occurred. Livestock were recovering from the winter storm, and producers continued to work on restoring water and power. Producers were still finding cattle that died during the storm.

WEST CENTRAL

The warm week that followed the historic arctic front was spent assessing damages, fixing water leaks and checking on livestock and crops by producers. Growers got back in the field to prepare for spring planting. Tree damages, such as broken limbs due to ice loads, were common but assessing their long-term health will take some time. Grazing was in short supply and the cold temperatures set wheat fields back two weeks. Cattle losses were not as bad as expected with most deaths being calves born during the event. More issues with sheep and goats were being reported. Exotic animals suffered the most severe losses with producers reporting losing 50% of entire herds.

SOUTHEAST

Snow, ice and rain improved soil moisture levels. Conditions were good with warmer weather, but damage to forages and vegetables were widespread from the excessive cold. Some livestock losses were reported along with damage to agriculture infrastructure and equipment. Winter wheat and ryegrass were damaged by freezing temperatures. Livestock remained stressed and were eating high rations of hay. Producer supplies of hay were dwindling. Lee County reported windy conditions. Rangeland and pasture ratings were very poor to fair with fair ratings being most common. Soil moisture levels were adequate to surplus with adequate levels being most common.

SOUTHWEST

Temperatures were warmer, and some rainfall was reported. Pasture and rangeland conditions were good to poor with better quality reported in areas that received more moisture. Gonzalez County reported corn planting had begun. There were reports of oat and wheat damage due to the winter storms. Gillespie County reported some producers had been without power for 10-14 days. Peach producers were hopeful their trees did not sustain severe damage from the arctic front. Real County reported that lambing and kidding was underway. Caldwell County reported sheep and goat markets remained good while cattle prices struggled. Producers continued to provide supplemental feed for livestock. Pneumonia issues among livestock were rising. The assessment of crop, livestock and wildlife losses continued.

SOUTH

Soil moisture levels were adequate to short for most of the district with some areas in southern parts of the district reporting short to very short soil moisture levels. Conditions were much colder than normal before turning mild, and some producers were holding off on corn and sorghum planting to avoid a late freeze. Early planted corn and sorghum will be replanted. Pasture conditions declined due to the freezing temperatures and drought. Livestock continued to receive supplemental feed. Warmer temperatures and sun helped some forages recover. New growth in mesquite trees was reported. Most landscapes were impacted by the arctic front, and many plants were not expected to recover. Oat fields had rebounded and were improving. Jim Wells County reported temperatures were between 18-32 degrees for 42 consecutive hours during the winter storm. The freeze impacted livestock producers, but no animal losses were reported. Additional supplemental feed will be required due to winter forage damages. The freeze affected a significant number of wells that provide water to crops and livestock. Cameron County reported unseasonably hot and dry conditions followed the winter storm. Citrus trees were browning, and remaining fruit was falling to the ground due to the freeze. Sugarcane was brown but expected to provide a ratoon crop. Vegetables were also affected, but onions, potatoes and cabbage were expected to survive. Corn and sunflowers that were planted in parts of the district just before the freeze seem to have survived. Freeze damage assessments continued as the full extent of the winter storm will be determined over the coming weeks. Cotton plantings will begin soon. Watermelons were being replanted after the freeze.