Drought Withers Smallest U.S. Hay Crop in a Century to Boost Cost of Beef

The smallest U.S. hay crop in more than a century is withering under a record Texas drought, boosting the cost of livestock feed for dairy farmers and beef producers from California to Maryland. The price of alfalfa, the most common hay variety, surged 51 percent in the past year, reaching a record $186 a short ton in May, government data show. Hay and grass make up about half of what cattle eat over their lifetimes, so parched pastures are forcing ranchers to find alternative sources of feed, pushing some spot-market corn to the highest ever. Farmers in Oklahoma and in Texas, the biggest producer of hay and cattle, may harvest only one crop from alfalfa and Bermuda grass this year, compared with three normally, said Larry Redmon, a state forage specialist at Texas A&M University. Cattle that usually graze on fields through September or October are instead being sold to feedlots, where they are confined in pens and eat mostly corn. “We’re just running out of grass,” Bo Kizziar, the feedlot manager at Hansford County Feeders, said by telephone from Spearman, Texas. With pastures disappearing, Hansford is moving cattle into its 50,000-head feedlot three months earlier than normal, boosting costs as the company buys more corn, he said. The drought, which is the worst ever in Texas, is compounding a hay shortage caused by farmers shifting this year to more profitable crops, including corn. The U.S. may harvest 57.605 million acres of hay in 2011, the least on records going back to 1909, U.S. Department of Agriculture data show. Corn was sown on 92.282 million acres, the second-most since 1944...more

The shifting production of corn for ethanol, the drought and wildfires are having an effect on cattle producers:

The U.S. cattle herd, including dairy cows and beef animals on feedlots and ranches, totaled 100 million head as of July 1, the fewest at that time of year since at least 1973, the USDA said July 22. As of July 1, the U.S. feedlot herd of beef cattle totaled 10.451 million head, up 3.8 percent from a year earlier, the USDA said in a report July 22, as drought forced ranchers to sell more livestock. Beef producers are culling cows and young females, which means smaller supplies for the next two years or longer, according to Steve Kay, the publisher of Cattle Buyers Weekly, a trade magazine based in Petaluma, California. The cattle and calf herd next year may fall to the lowest since 1952, increasing costs for meat processors including Tyson Foods Inc. and Cargill Inc., he said. “The drought has dried up any hopes for rebuilding the beef herd this year or next year,” Kay said in a telephone interview. “Hay is getting shorter in supply and prices are running higher. The herd liquidation is increasing. The falling cattle herd is going to put more stress on the cattle-processing industry. Beef is going to continue to be more expensive for U.S. consumers.” Feedlots also are accelerating sales to meatpackers, which will ultimately result in lower beef supplies and may send cattle to a record by the fourth quarter, said Don Close, a market director with the Texas Cattle Feeders Association in Amarillo.