After a prolonged, severe drought, the delegation of corn farmers witnessed some of the first rainfall last night. This will be a happy occasion to the corn and cattle farmers in the Amarillo, TX area, one of whom indicated that one of his farms had seen less than 1 inch of rain from August 2010 to August 2011. In fact, the countryside here looks brown and desolate with one cattleman indicating that the grass never broke dormancy and turned green throughout all of 2011.
The cattle feed yards are suffering through this drought too, seeing more and more cattle sent to market and more and more cattle entering feedlots at lower weights when there just isn’t enough pasture to feed them. Illinois Corn, together with Iowa and Nebraska corn, are here to learn more about the state of the industry and to invest in relationships built between the Midwestern corn sector and the Texas livestock sector.
Some facts the delegation learned yesterday:
- Feed yard capacity across Texas, Oklahoma, and New Mexico is approximately 3.2 million with most of that being in Texas.
- One-third of the cow herd in the U.S. is located in extreme drought areas.
- Texas cow liquidation due to drought conditions = 600,000 head.
- Cow kill in Texas is up 28 percent.
- Herd size in the U.S. has declined to the same level as 1940.
- Increased carcass weights have offset about 75% of the herd decline since 1975. Ranchers have become skilled at growing animals with increased efficiency.
- Industry expecting record high prices in 2012, though these high prices are also predicted to be the break even prices.
As your Illinois Corn delegation continues to learn more about the status of the cattle industry in Texas today, we will certainly be praised for bringing the rain from the Midwest to the South. Though despite their delight, experts predict it will take years for the industry here to recover. Even after the rain comes again in earnest, Texas expects at least 6-12 years before they see a return to previous cattle numbers and only then if all other market signals fall into place for cattle feeders in the state.
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