Well here we are. at the beginning of a new year. And with this new trip around the sun brings both optimism for what the future can hold. As well as potential challenges. While I will mention the optimism it is also important to plan ahead for any speedbumps that may be coming to us.
While yes it is always good to look at the future with the hope it is also important to take a more realistic approach. As they say “hope for the best but plan for the worst”.
Now you may be saying that this is not a good way to look at things but it does producers no good to look at things with blinders or “rose-colored glasses”. In order to make the best future possible you need to look at any potential roadblocks so they don’t surprise you. Here are 4 potential problems I think that cattle producers should look at for going into 2022:
Drought in cattle country
Now this one should come as no surprise to anyone really. This topic is covered ad nauseum in every agriculture publication and for good reason. It is a well-known fact, especially here in Texas, you are either currently in a drought or you are about to be in one. In the past year, many areas of the western United States suffered from a pretty bad drought with it slightly improving toward the end of the year.
Drought is something that every cattle operation out there should plan for. Having a good plan in place will enable you to ride out this problem and not degrade your forages and pasture. Producers that focus on increasing flexibility as well as maximizing the health of resources are more likely to find solutions during this time that minimize painful decisions with limited resources.
Options
There are many options producers can choose from but timing is key. If you do not make the choices at the right time then your place can suffer and what you can do next will be limited. When or if you receive rain during certain times of the year will determine your planning. Rain received between last year’s killing frost and this year’s spring green-up results in a greater yield of forage vs mid-to late-summer rain. The amount of moisture that you have available will determine what steps to take. Such as early weaning or culling, need to take place. If you are looking for more ideas on how to plan for drought then check out the report from the University of Nebraska at Lincoln called “Managing drought on the ranch”.
While during this time making sure that your animal’s energy and protein needs are being met it is also important to keep an eye on their drinking water. As the weather starts to get warmer the amount they will need to consume will also go up. During the hot summer days, it is easy for them to drain a stock tank completely dry.
Increase input costs
I do not have to tell you that over the past year the price of everything has gone up. Though it has slightly leveled off fuel has gone to about twice what it was just a year ago. As the price for fuel goes up that means that everything else will also go up with it. Even fertilizer has increased in price in just a short amount of time. Though there is not much you can do to combat this it just means that you will have to be smarter with the decision that you make.
Generally, the two choices here are to either decrease costs or to improve efficiency, While the first option can be helpful there is only so much that you can remove before the overall quality of your end product goes down as well. It is better for you, in the long run, the be more efficient than “least cost”.
It is important to monitor your operation’s performance and see what is working and what is not. Keep what is giving you the best returns and get rid of what is not. You may need to be a little cold when it comes to making these choices but it will help you move forward.
One way to manage costs
One way that you can be more money-wise is when it comes to putting out fertilizer. The first step is to make sure that you even need to use fertilizer in your place. A simple soil test will tell you if this cost is necessary or not for you. I talked about how to do gather samples for a solid test in a previous article “Don’t hold back your soil test”. Another thing you can do to add nitrogen to your soil is to plant legumes as a cover crop. It will provide forages for your cattle to graze and provide nitrogen for your soil.
Government policy changes
Since we had someone new get elected into office the changes they bring to ag policy is another challenge that producers face. The politics part aside this than be a very irritating subject for producers. With the larger and larger disconnect between ag producers and everyone else, it’s getting to be more and more policy is being based on unsound “science”.
While there are many new things coming through the pipeline so far there are 2 main ones that people are talking the most about right now. They are Waters of the United States and Biden’s “plan” to deal with the meatpacking monopoly.
Waters of the United States:
This was a law that was passed during the Obama administration and was controversial even then. The main issue with this law was how they defined what was and what was not under the jurisdiction of what was “navigable” waters and thus what was under Federal control. From what I am aware of the way they worded it even thing like ditches and even low spots in pastures qualifies.
During the Trump administration, they tried to change up the wording to make it more clearly defined. This is so as to prevent any potential overreach. However, as I said before we have a new administration. Many of whom were part in passing it in its original form. Another thing that is causing some issues is there have been some court rulings benefiting government overreach.
Meatpacking Monopoly:
As most of you are aware there are basically 4 companies that control all of the meat-processing here in the United States. Recently the Biden administration has announced their intention to do something about this to “make things fair”.
As a disclaimer, I will say that what follows next is just my opinion. So should be taken with a grain of salt.
I do not hold much hope for anything that they will try to do will make things any better. It has been my experience that government involvement tends to make things worse. At best what will happen is just them throwing a bunch of money at it while claiming that they helped. At worst it will just be a continuation of what is already happening with the government picking winners and losers, mostly just based on who provides the most “campaign contributions” to them.
As I said earlier with the growing divide of people being more and more separated from the farm it is of utmost importance that you the producers make your voices heard so we can get a fair chance.
Cattle market outlook
Now onto the part that most people are the most concerned about. Will my calves bring in a good price when I go to sell them? I am happy to tell you that as it stands right now the answer to that is yes.
Most economic forecasters have an optimistic outlook on the new year. This will be a continuation of the marketing improving towards the end of last year. Now I will remind you that this is all speculation and it is subject to change at any time.
A driving force in this is a steadily increasing demand. This is in both the domestic as well as international markets going into 2022 and 2023. Couple that with the lower cattle numbers and that means prices going up.
