January January2015 2015——Issue Issue22
Moving on Passing the ranch to your heirs PAGE 10 PRSRT STD US POSTAGE PAID BRYAN, TX 77802 PERMIT # 23
JAMES THOMPSON ARRESTING THE RUSTLERS ‘MAKE-IT-OR-BREAK-IT’ JAMES THOMPSON Straight from Stopping modern-day the horse's cattle mouth. thieves.
Straight from Producers try to therecover horse'sfrom mouth. 2011 drought.
PAGE 3
PAGE 6 3
JAMES THOMPSON SETTING THE RIGHT TRAP
JAMES THOMPSON ALTERNATIVE INCOME
PAGE 4 3
PAGE 9 3
Straight The best from way to thecapture horse'sferal mouth. hogs.
Straight from Ranchers seek the newhorse's sourcesmouth. for profits.
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January 2015 — Issue 2
The Land & Livestock Post
News From the General Manager Modern cattle rustlers are driven by prices, drugs L
O
By JANELLE STECKLEIN Associated Press
KLAHOMA CITY — The duo didn’t fit the picture of the rough, horse-riding characters portrayed in old westerns. The 20-somethings drove up in a shiny pickup. They wore baggy pants and sweatshirts. Each tucked a single leg of his pants into an expensive looking pair of cowboy boots that clearly hadn’t seen a day of hard work. Despite this being Oklahoma City proper, one complemented his look with a pair of spurs, which jangled as he moved. The rough characters of old answered to no one, but this pair had a healthy amount of respect for one person in particular: Mom.
The Land & Livestock Post
Apprised by state agriculture agents Paul Cornett and Donnie Crain that her son and his friend were under investigation for stealing cows, she demanded loudly to know why her son hadn’t mentioned it. His reply: He forgot. The men — whom agents later identified as Conilius Demar Wright, 23, and Tyvenski Kewaun Long, 24 — were charged in Canadian County last month with stealing livestock. Wright faces three counts of larceny, while Long is charged with two counts. Both also face a conspiracy charge. The penalty for stealing livestock is up to 10 years in prison. If Wright and Long struck an unusual
See RUSTLERS, Page 7
January 2015 — Issue 2
and seems to be the only thing humans aren’t making more of — except in Hawaii. I heard land still is being made there. Well, I don’t think I can afford a plane ticket to Hawaii, much less any land there. In fact, and this may be hard for some of you dear readers to believe, me being a media mogul and all: I don’t think I could afford to buy any land at all. Despite my economic standing, however, I will some day be a landowner. Granted, some people are JESSE WRIGHT going to have to die in order for me to acquire this land, and not just any people. If it were someone truly evil who had to die in order for me to get my land, I’d be all for it, the sooner the better. But, since it is my parents who would have to buy the farm in order for me to have a farm, I’m in no rush. Besides, as of now I have all the benefits of being a landowner, free reign of the place, without any of the
responsibility. But there are responsibilities that will need to be passed on, and if you have land it is something you will have to think about at some point. In our cover story we take a look at passing on the land, and some factors you should consider. We also have some news from The Samuel Roberts Noble Foundation as well as other stories from around the industry. I hope you enjoy it, and thanks for reading. ’Til next time,
• For more information about content or advertising, contact Jesse Wright at jesse. wright@theeagle.com.
3
News
Feral hog sounder size should determine trap choice By Michael Porter The Samuel Roberts Noble Foundation
Photo courtesy of The Samuel Roberts Noble Foundation
Trapping probably is the most effective feral hog control technique available to most land managers. Aerial gunning can be fairly effective but should be implemented over large areas (a few thousand acres), requires a helicopter, and can be relatively dangerous considering the necessary low altitudes and slow speed. Ground hunting is fun but not particularly effective at reducing swine populations. No toxicants are legal but are being investigated. Many different trap technologies are available: cage or box traps (Figure 1); circular spring panel traps — probably the least effective among the options discussed here — (see example at bit.ly/ SpringTrapPhoto); corral traps (Figure 2); drop nets; BoarBuster; and others. Trap size should be matched to feral hog sounder size. A sounder is a herd of
The goal when using a trap should be to capture an entire sounder at one time. feral hogs primarily comprised of one or more adult sows and one or multiple generations of offspring. A sounder is the primary social unit among feral hogs. One or more mature boars will spend time with a sounder when trying to mate with a sow but then will move on searching for another sow. The goal when using a trap should be to capture an entire sounder at one time. Feral hogs are relatively intelligent and can learn quickly, so a portion of a sounder remaining outside a tripped trap often learns to avoid the trap. Cage or box traps can be effective management tools when dealing with small sounders, e.g., fewer than than six individuals or individual boars. Cage or box traps may capture
See HOGS, Page 5
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January 2015 — Issue 2
The Land & Livestock Post
News Hogs, from Page 4 many hogs over time when hogs are abundant, but usually do not capture enough whole sounders to prevent population expansion and train many feral hogs to avoid traps. When dealing with sounders of more than about six individuals, larger traps such as corral traps, drop nets or the BoarBuster are more appropriate. In past years, corral traps and drop nets represented some of the best known tools for capturing feral hogs. Ongoing research at the Noble Foundation, however, led to the development of the BoarBuster trap. BoarBuster (available commercially in 2015) marries the technology of remote monitoring and triggering with the best aspects of previous trap designs. BoarBuster captures whole sounders with a single trapping. In testing, the trap captured as many as 39 feral hogs in a single drop. Appropriate baiting and train-
Photo courtesy of The Samuel Roberts Noble Foundation
There are many different trap technologies available.
ing protocols should be practiced to increase the likelihood of trapping a whole sounder. Use of infrared-triggered cameras is very helpful to learn sounder size and pattern feral hog activity. It is important to remove feral hogs from a trap as quickly as practical. Other sounders or individual feral hogs might travel by a trap containing hogs and learn to avoid it. Also, it is unethical to leave trapped animals in a trap very long because they might escape, injure themselves or others, or suffer due to weather exposure or anxiety. When a trap cannot be checked at least once a day, it should be shut, tied open or removed so it cannot capture animals, especially nontarget animals. For more information, go to noble.org/feral-hogs/.
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The Land & Livestock Post
January 2015 — Issue 2
5
News
2015 could be a ‘make-it or break-it’ year for producers By RoBeRt BuRns Texas A&M AgriLife Extension Service
D
epending upon the weather and consumer tolerance for high prices, 2015 could be a make-it or break-it year for beef producers, according to a Texas A&M AgriLife Extension Service expert. Of course, it’s all about supply and demand, said Stan Bevers, AgriLife Extension economist in Vernon. In Texas and the rest of the U.S., cow inventory numbers are down, largely due to recent droughts. This means calf supplies are down as well. And as many parts of Texas have come or seem to have begun to come out of the drought, livestock producers are avid about rebuilding herds or at least having stocker calves to take advantage of available winter wheat grazing, Bevers said. All in all, this means producers
6
are seeing some extraordinary prices at the sale barn. “Calf prices have been pretty much record prices throughout the year,” he said. “Every time we think we’ve reached a new plateau, we just wait a week or two weeks and they go higher. It’s not uncommon right now to see 450-pound calves bringing around $3.60 a pound, which puts them somewhere in the neighborhood of $1,600 a calf, which is extraordinary and more than we thought we’d ever see.” In the Rolling Plains area, where Bevers is stationed, as well as many other parts of Texas, the rains came at just the right time to really stimulate the planting and growth of winter wheat pastures. The good forage availability is likely to contribute to driving calf prices even higher throughout much of 2015,
See PRODUCERS, Page 16
Texas A&M AgriLife Extension Service photo by Robert Burns
Cost of replacement heifers and cow/calf pairs continued to break all historical records during the fall as producers sought to rebuild herds, according to a Texas A&M AgriLife Extension Service economist. Replacement cow prices are expected to level out during the winter, but then climb higher with spring green-up.
January 2015 — Issue 2
The Land & Livestock Post
News Rustlers, from Page 3 image of those accused of rustling livestock when confronted by state agents on a weekday afternoon last month, officials in the Department of Agriculture, Food and Forestry say it’s because the crime, itself, has changed. In some parts of the country, thieves looking for a quick buck target televisions and jewelry. In Oklahoma, enterprising criminals with a little bit of knowledge of livestock — who are lured by payouts of thousands of dollars — target cows. By the start of November, nearly 1,200 cattle were reported stolen from pastures across Oklahoma, said Jerry Flowers, chief of the 10-agent unit tasked with investigating agricultural crime in Oklahoma. By the year’s end, he said, it could be as many as 1,500. Between theft of equipment including tractors and trailers, and cattle rustling, the Oklahoma’s agricultural industry has lost more than $4 million
Illustration courtesy of www.americancowboychronicles.com
Cattle rustlers were dealt with swiftly and harshly in the Old West. Rustling continues to be a problem today, although methods of punishment have changed. this year, he told the McAlester News-Capital (bit.ly/1xat7lJ). Wright and Long told the state agents they took the cattle to buy marijuana and pay bills, Flowers said. The two had not yet entered a plea by Jan. 2. Methamphetamine is the biggest inspiration for cattle theft, Flowers added, though heroin is an increasing contributor, as well. He estimated that 80 percent of the cases that his agents process are drug related. “It’s really becoming a real big problem,” he said. “We get involved in the narcotics end of this thing pretty much routinely.” Flowers’ unit recovers about 40 percent of the cattle reported stolen each year. It files about
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See THEFT, Page 8
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The Land & Livestock Post
January 2015 — Issue 2
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News Theft, from Page 7 200 felony charges a year, many built on paper trails that especially are painstaking in cases when cattle aren’t recovered. The thing that makes gently lowing cattle such a tempting target is price. A 450-pound heifer calf can sell for $1,575. Targets also are becoming more convenient. The industry is attracting a new kind of producer: city and suburban dwellers who invest in a small swath of land in the country, then buy and raise a few head of cattle for supplemental income to pay for things such as vacations. Gone are the days when huge herds roamed the prairies. These days the typical herd size is around 40, said state Sen. Eddie Fields, R-Wynona, chairman of the Oklahoma Senate Agriculture and Rural Development Committee. But the new livestock farmers rarely brand their cattle, Fields said. That can make tracking ownership tricky and frustrate investigators’ efforts to differentiate one missing black cow from another. Even branding isn’t a guaranteed protection. Fields always brands his cattle but still fell victim himself at his Osage County ranch about a decade ago. Someone made off with 10 head. He said the cattle just went missing one day, and there were few leads. The thieves never were caught. Today more than 45,000 Okla-
homans raise beef, and cattle outnumber people in the state nearly 2-to-1. Cattle are the state’s No. 1 agricultural commodities, said Michael Kelsey, executive vice president of the Oklahoma Cattlemen’s Association. And stealing them is easier than most people might think, he said, though it still takes know-how. “A lot of those thieves, yes, they’re connected to meth abuse, but they also have connection to cattle,” he said. “There is some practical experience that is beneficial to the thieves.” Flowers said Wright and Long worked at a sale barn for about two weeks before using their new skills to take cows. Cattle thieves — Flowers calls them “outlaws” — generally gamble that days will pass before a rancher notices a few missing cows from a large rural pasture. That allows rustlers enough of a head start to offload the merchandise at sale barns across the state or in another states, then pocket and spend the proceeds. “It’s frustrating,” he said. “It’s expensive. It can even be life threatening. You pull in on somebody doing something like that, you don’t know what they’re going to do.” Operators of sale barns are stepping up to deter thieves from taking advantage of them to dispose of stolen livestock. In addition to videotaping the arrival and unload-
ing of trailers, barns keep an extensive paper trail of the seller and buyers, said Terry Chapman with the Oklahoma Livestock Marketing Association. Those records are turned over upon request to Flower’s unit. Auction operators work closely with law enforcement to deter thefts. They also report suspicious activity, which was actually what led to the recovery of J.D. Thomason’s cows. Chapman said the biggest challenge for everyone is identifying the people who are selling stolen cattle - quickly. A single day can mean the difference between recovery and a cow being sent to a slaughterhouse. That’s nearly what happened to Thomason, who operates a ranch in the southwestern corner of Payne County, about 45 miles outside Oklahoma
City. He didn’t know three of his pregnant cows were gone until Flowers’ investigators — through dogged, old fashioned door-knocking — tracked them to his pasture. Thomason said he made the mistake of leaving several panels in a field. The rustlers, who drove miles out of their way looking for prey, capitalized by using the panels to build a pen. They pulled up a trailer and lured his cows away — likely with a bag of feed, he said. Thomason said he’s out in his fields often, but as cattle tend to roam, it can be diffi-
cult to get an accurate count. The rustlers took the cows to a sale barn — which coordinates cattle auctions across the state. The thieves were caught red-handed, and the cows reunited with a thankful Thomason, Flowers said. Court records show Long and Wright have been charged with stealing the cattle. It was the second time in the past six years that Thomason had fallen prey to thieves. The first time, he said, he lost nine head of cattle from the same pasture. Those were never recovered.
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January 2015 — Issue 2
The Land & Livestock Post
News
Texas ranchers seeking alternative income streams By BETSY BLANEY and EMILY SCHMALL Associated Press
GAIL — The Muleshoe Ranch’s profits were chopped in half when the drought withered pastures, dried up stock tanks and forced the owner to move most of his cattle out of state. Three years later, the sprawl-
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Published by Bryan-College Station Communications, Inc., P.O. Box 3000, Bryan,Texas 77805. E-mail: thepost@theeagle.com All offices are located at 1729 Briarcrest Drive Bryan,Texas 77802. POSTMASTER: Send address changes to The Eagle, P.O. Box 3000, Bryan,Texas 77805-3000 The Post is printed in part on recycled paper and is fully recyclable.
ing 33,000-acre West Texas ranch again is populated with cattle, thanks to improved rainfall. But John R. Anderson no longer is taking chances with his bottom line. The fourth-generation rancher is exploring alternative incomes to ensure his business can survive another hit from Mother Nature, including leasing part of his land for quail, deer and antelope hunting. “The drought opened our eyes to we need to be more diverse,” said Anderson, who ranches near Gail, about 70 miles south of Lubbock. “Our mind isn’t closed. If there’s something we can do we’re going to go for it, if it makes economic sense.” His counterparts in the nation’s top beef-producing state are doing everything they can to make up for the smaller profits since the drought, which began in early 2011, forced a widespread culling of herds. Though limited supplies have prompted a record rise in beef prices, more ranchers are leasing part of their property for hunting or selling water to oil companies or desert plants and mistletoe to nurseries. Some are even taking side jobs to make ends meet. The changes may be permanent, and the ongoing drought is
AP Photo/Betsy Blaney
Like many ranchers who suffered through the state’s driest year ever in 2011,owners of the Muleshoe Ranch in Borden County have worked since to diversify their incomes with other enterprises including leasing water and hunting acres for deer, antelope and quail. among the main factors that have altered indelibly the state’s centuries-old cattle ranching tradition, says Texas and Southwestern Cattle Raisers Association vice president Richard Thorpe. Hunting leases are perhaps the most popular way ranchers have diversified their incomes. Anderson will lease his land for as much as $5 an acre; other places charge thousands of dollars per gun.
See INCOME, Page 17
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News
Where there’s a way, there’s a will Transferring your ranch to the next generation
Y
By RoBeRt FeaRs Special to The Post
ou’ve put your heart and soul into building a ranch of which you are proud. What happens to it when you’re gone? Successful ranchers are good stewards of their land and wish for continued good stewardship after their death. How can they be assured that this will happen? The desired answers to these questions can be delivered through proper estate planning and executing the necessary paper work. Estate planning should involve the whole family. Schedule family meetings to discuss the ranch’s future after you are gone. Explain to family members what you own and how it is managed. Explore how family members feel about the ranch. Do any of the children enjoy and want to continue the ranch lifestyle? Are the children passionate about the land and cattle? Chances are that one or two prefer to stay on the ranch while others want an urban lifestyle. On several occasions within the past three months, it has been observed that the daughter wants to stay on the ranch and the boys want to enter non-agricultural professions and live in a city. So it may be a daughter who operates the ranch after you are unable to do so.
When to give
“It is very important to leave the ranch to the son or daughter who will be a good shepherd of the land,” said Kent Schuster, an attorney with offices in Hearne and Austin. In addition to being an attorney, Schuster has a master’s degree in range science which was driven primarily by his love of the land. He relies on his range management background frequently when dealing with legal issues concerning rural lands. “When planning the transfer of a ranch to the next generation, it must be remembered that immobile assets or real property, such as land and buildings, are transferred by deed,” Schuster said. “Mobile assets such as equipment, recreational vehicles and automobiles are transferred by title. “Ranchers can give their land to heirs or friends while they are alive with a deed. This is called an inter vios gift. They can also bequeath their land to heirs or friends through a last will and testament. This is called a testamentary gift.” Schuster said, “There are several types of deeds, including but not limited to quick claim deed (deed without warranty), special warranty deed and general warranty deed. “A quick claim deed transfers whatever ownership interest a person has in a property. It makes no guarantees or promises as to the percentage of a person’s
ownership interest. “A general warranty deed transfers ownership and guarantees that the property has no other owner(s) than the grantor/seller, has not been sold to anyone else and that it is not under any undisclosed liens or restrictions. The grantor will defend the title against any third-party claim. The general warranty deed is the best and strongest deed in Texas.” The special warranty deed has the same guarantees as a general warranty deed, but the warranty of title is limited only to anyone claiming to own an interest through the grantor or his heirs and assigns. The seller guarantees that he or she will compensate the buyer if the title is not clear through his chain of title according to the Courthouse records. This is why title insurance is usually required with a Special Warranty Deed. The common legal document used to transfer property from a decedent to his or her heir is a will, which is effective only on the grantor’s death. Almost anything can be written into a landowner’s will with one restriction. Heirs have to be living and/or born 21 years beyond the date of death. This means that you can leave property to your children, grandchildren and possibly, great grandchildren if they are born within 21
See INHERIT, Page 11
Photo by Robert Fears
If the ranch generates a large amount of income from minerals, then an heir can use his or her share of royalties to buy the ranch from other siblings.
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January 2015 — Issue 2
The Land & Livestock Post
News Inherit, from Page 10 years of your death. “There are several ways to leave a ranch to just one of the children,” Schuster continues. “For example if Pete wants the ranch and Bob has no interest in it, you can leave the ranch to Pete through a will and buy a life insurance policy of equal value with Bob as the beneficiary. When you pass away, Pete gets the ranch and Bob gets the insurance money,” Schuster said. A lot of ranchers are “land rich” and “cash poor.” In this situation, you may not want to leave your ranch to three children when only one of them is interested in it. This may force a son or daughter to sell land in order to buy the interests of the other two. If the ranch generates a lot of income from minerals, then the one heir can use his or her share of the mineral income to buy the ranch from the other two siblings. Land can be deeded to a son or daughter with a life estate which allows the parents to continue to live on it as long as they are alive. Depending upon how the life estate is written, the father or mother can continue to take part in the ranch operation. Some life estates are written in a manner to allow the parents to sell a portion or mortgage the entire ranch if cash is required for continued operation, medical expenses or other necessary needs. The ad-
vantages of this transfer method are that the son or daughter feels connected to the land and takes an active role in the ranch operation. He or she is apt to take good care of the ranch after your death because of their prior involvement. “A ranch does not necessarily have to be left to one child,” explains Schuster. “It can be deeded to any number of children as an undivided interest which means they will share equally in the profit and loss. As an example, there are four children and one of them is interested in running the ranch. Yo u can give a fourth interest to this person before your death. This action gets him or her involved and helps to maintain their interest in the operation. Under this arrangement, the person gets onefourth of the profits and losses. The other children receive their interests after your death.” Schuster suggests initiation of a limited liability company and deeding the ranch to the company when its asset value is high enough to cause inheritance tax issues. Shares of the company then can be divided equally among family members. Every year, the parents can give company shares to the children in amounts equal to or less than the annual gift tax exclusion. This can be done until all of the company shares belong to the children. This form of ownership also provides a good liabil-
See WILL, Page 12
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News Market, from Page 13 ity shield, particularly if the ranch has a hunting enterprise. “When land is transferred to heirs through a will, there is a step-up in basis used for federal tax assessment,” Schuster said. “For example, if the ranch was originally purchased for $40,000 and is worth $140,000 at time of death, your heirs will be allowed to value the land at the $140,000 rate at the time of death for estate tax purposes. So if the ranch is sold soon thereafter, they can avoid large capital gains. If they retain the land, they may have less capital gain exposure in the distant future.” If none of the children are interested in the ranch, then you probably know of a neighbor or another rancher who is a good shepherd of the land. This person may be interested in a long term lease after your death. The lease can be granted through a will with the stipulation that lease proceeds are divided equally among the heirs. “Good land stewardship should be a key factor in the selection of a lessee,” Schuster said.
Mobile assets
“In most wills concerning farms or ranches, I add the clause, ‘ give all my land, cattle and improvements thereof to _________,’” Schuster said. “Improvements include buildings, water wells, mobile homes and
equipment. This clause stipulates that the person inheriting the land also inherits everything on it. Naturally if the land is leased and the lessee has cattle, horses and equipment on the ranch, they are not included in the will.” Transfer of mobile assets occurs more smoothly if there are written records that show inventories. Cattle numbers are assessed easily if production records have been kept and the animals are individually identified. Identification methods can include ear tattoos, ear tags, brands or, in cases of small herds, detailed written descriptions. Production records should include animal births, deaths, sales and purchases. Equipment inventory can be obtained from depreciation tables used for income tax returns. It is a good idea to keep an accurate, up-to-date inventory of other items such as feeders, hand tools, veterinary supplies, feed and tack. Death of a family member is a traumatic experience and attention often is diverted from activity on the ranch. Employees, visitors or others may use the opportunity to clean out the tool chest, medicine cabinet or the feed room. These actions could cost the estate thousands of dollars. “The most important point to remember is to avoid waiting until you are on your death bed before deciding what you
Photo by Robert Fears
A clause should be placed in a will that stipulates the person inheriting the land also inherits everything on it, including the cattle. want to do with your property,” Schuster said.. “I have been called to hospital rooms to hastily prepare wills without much consideration on how assets
should be handled. The dying person leaves his ranch to children who have no interest in it. After the funeral, they hire a Realtor and the land is sold for
a subdivision. “We owe more than that to our ranching heritage and continued conservation of our land,” Schuster said.
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January 2015 — Issue 2
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News
Carry capacity influences the value of leased land By Dan ChilDs The Samuel Roberts Noble Foundation
Profits from grain and livestock enterprises generally impact the rental rates on lands that are used to grow these commodities. During highly profitable times, rental rates for land usually trend higher. Likewise, when profits are lower, rental rates will trend lower. How quickly rental rates adjust depends to a certain degree on how fast profitability changes for the underlying commodity. A good example of rental rates adjusting to profitability can be observed for corn. General profitability of growing corn during the period of 2008 to 2013 trended stronger. In the state of Illinois where corn is commonly grown, the University of Illinois reported1 rental rates moved from an average of $152.72 per acre in 2008 to an average of $196.13 in 2013. This is an increase of about 28 percent. Current projections are for the profitability of the cow-calf sector to set record
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highs for 2014. These record profits are also having an impact on rental rates for pastureland where cows are grazed. Pastureland leased for grazing cows is commonly negotiated by the acre. Some consideration is given to the amount of open ground, type of base grass and condition of the stand. Another factor is the animal unit year (AUY) — the carrying capacity in terms of the number of cows that can be grazed on the property during the growing season or year-round without jeopardizing the integrity of the grass stand. Often, however, AUY capacity is neither estimated nor considered. An AUY is more specifically defined as the amount of grass needed to sustain a 1,000-pound cow for 12 months and her calf for seven of those months. It is generally accepted that an animal unit will consume an average of 26 pounds of grass per day. Estimating the number of AUYs provides the amount of potential grass or “feed” the property is capable of produc-
ing. Knowing the carrying capacity of a property is helpful to the landowner by allowing them to know how much grass or feed they have for sale and, likewise, for the tenant to know what he or she is buying. Not many livestock owners purchase a sack of feed without knowing what it weighs or having an idea of the quality of feed in the sack. Rental rates that are based on carrying capacity provide information both to the landowner and the tenant concerning the amount of feed being transacted. This knowledge should allow each party to make a more informed decision, which could lead to a more equitable and longstanding agreement between the two parties. A variable in carrying capacity for land with improved forages, e.g., bermudagrass, love grass or old world bluestems, is fertilizer. Applying nitrogen fertilizer to these forages can increase carrying capacity considerably. The cost and ap-
January 2015 — Issue 2
plication of the fertilizer is generally the responsibility of the tenant. Therefore, carrying capacity is normally calculated without any fertilizer added. However, because the potential is there for increased forage production, land with an improved forage base will generally rent for a higher amount than land with a native grass base. Once carrying capacity is determined, a price can then be negotiated for the lease value of the property. An index used in some leases to stay current on profitability is the price per hundredweight of a 500-pound steer calf the first week of August. August is used because it is often the average price for the year. The price per hundredweight becomes the annual grass lease fee for the year per animal unit. For example, if a 500-pound steer calf was bringing $300 per hundredweight, then the annual lease per cow per year would be $300. This amount would not include care for the animals, only grass.
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January 2015 — Issue 2
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News Producers, from Page 6 Bevers said. “Here in North Texas, we have probably had as near as good of wheat pasture as we have in the last four years,” he said. “That’s putting pressure on producers to put stocker calves on wheat pasture in order to glean a few more dollars from them.” Longer term, there is some evidence total U.S. herd numbers are being rebuilt, Bevers said. There’s a lot of evidence, at least in Texas, that producers already are starting to rebuild herds as large parts of the state move out of the drought, Bevers said. But rebuilding continues to be an expensive proposition. “We’re seeing producers retaining their heifers or buying females of various sorts and ages,” he said. “It is not uncommon for young cow/calf pairs currently to bring well over $3,000,” he said. “Five to six or seven years ago, $1,200 to $1,500 was unheard of.” Bevers said he expects the high replacement prices to continue to be stable as colder weather sets in. Producers may hold back during the winter as they do not want to bring more females in until they see what the weather and forage supplies are going to be. “But come spring, March and April, when things start to green up again, chances are we’ll see another run up on
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these females,” he said. “At some point, we’ll get stocked up again and prices will go down, but I don’t see that happening at least until the fall of next year.” What will ultimately govern calf and replacement prices will be the prices consumers are willing to pay, Bevers said. “That’s the black swan, the unpredictable event: How high can the prices consumers pay at the supermarket go before they start cutting back,” he said. “Lately, demand has actually gone up, despite high prices. But consumers are buying more hamburger and less steaks and roasts.” One factor that makes it unpredictable is that it takes as long as a year and a half for calf and replacement females that are bought today to affect consumer prices, Bevers said. Consequently, consumers won’t be affected by current calf or cow/calf prices until well into 2016. There will be no regional reports for this issue of Texas crop, weather. By agreement with the U.S. Department of Agriculture, AgriLife Extension county agent reports are collected by the agency’s National Agriculture Statistical Service in Austin and then routed to the appropriate regional offices. This year, as it did last year, the statistical service suspended collecting the county reports for December. The district reports will resume when the
service begins collecting them again, usually the first or second week of 2015.
Coastal Bend In the Coastal Bend area, optimism also is high, and producers are rebuilding herds too, said Levi Russell, AgriLife Extension economist in Corpus Christi. But the different climate and breeds of cattle affect producer decisions about rebuilding, he said. First, 500-pound steers are running about $2.80 a pound, and choice cow/calf pairs are running about $2,300, considerably cheaper than in other parts of the state. Prices are lower for a number of reasons, according to Russell. One, calves have to be shipped considerably farther north to the feedlot areas. And because of the warmer climate,
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will still induce people to hold back some females as there’s an opportunity to rebuild with the rangeland and pastures that we have. With calf prices as high as they are and likely to stay high for at least the next few years, you could easily pay off the investment in a young pair in two or three years.” And the fact that the region was hit hard by the drought, as hard as parts of West Texas and the Panhandle, doesn’t seem to be discouraging producers from taking a long-term view, Russell said. “Could the rains tail off again?” he said. “Well sure, but I think there are a number of people holding back heifers and taking advantage of the favorable price projections and improving rangeland and pastures.”
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there’s more Brahman influence, which also means they don’t grade as well and tolerate the winter cold up north as well as the crosses used in Central and North Texas. “If the calves are worth less, then the breeding stock is worth less, because any capital asset is based on the cash flow you get from it,” Russell said. Another reason south Texas calves are cheaper is that stocker cattle are not common in the area because there is not much winter wheat grown for grazing and pastures aren’t suitable. Still, the prices are historically high for the area. But many producers are resisting the temptation to take replacement heifers and cows to the sale barn for quick money. “There’s some skepticism, but at the same time, price projections for the next few years are high,” he said. “And this
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January 2015 — Issue 2
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News Income, from Page 9 From the beginning of the drought through last year, the amount of land designated for hunting- and wildlife-management use increased by about a third to 4.1 million acres. The extra income offers financial stability to ranchers who have not yet fully replenished their numbers — down about 18 percent from 13.3 million cattle in Texas and at the lowest point nationally since the early 1950s. Several months after becoming a partial owner of the Bar L Ranch with her fiance two years ago in North Texas, Mandy Dauses realized the profit margins were thinner than she expected, due in part to having a smaller herd that was culled by nearly three-quarters. She now works full-time at a veterinarian’s clinic and spends nights and weekends tending to the ranch, catching stray cattle and custom-baling hay for extra income.
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“Even though we don’t have as many (cattle), they’re bringing in so much money we can justify smaller numbers and still operate,” said Dauses, whose ranch in Kemp now holds about 120 head of cattle. While industry groups don’t keep count of how many ranchers are generating alternative incomes, they have noticed an uptick amid continued concerns of water scarcity and poor grazing conditions. Ranchers more often are turning to hunting ventures because wild animals do not require grass to feed on, cattle raisers association spokeswoman Stacy Fox said. “They realize they can make a lot of money without as much input,” she said. Some are marketing hunting opportunities and corporate retreats to the oil and gas industry, particularly in West Texas’ Permian Basin and the Eagle Ford shale formation in South Texas where production is booming.
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January 2015 — Issue 2
The Land & Livestock Post
News Drought, from Page 16
Panhandle/South Plains
Out here, people are taking advantage of what we had, which was some decent rain in the summer, especially August and September” said Ted McCollum, AgriLife Extension beef cattle specialist in Amarillo. And though the Texas High Plains has had some relief from the drought, it hasn’t had the turnaround that many other parts of the state have, McCollum said. “There are some areas in the Panhandle that are still wanting for rain,” he said. “We had moisture and grew some grass, but you don’t have to dig very deep to find dry ground.” Though the good summer rains began recovery of rangeland in many areas, winter wheat for grazing remains a mixed bag, McCollum said. Where it was planted early and benefited from rains in August
TE PRIVA Y T A E TR
rk An a l C
and September, or it was grown under center pivot irrigation, stands are good. Where it was planted late, stands are short and not suitable for grazing. Wheat was planted late because the preceding crop was late being harvested or the late summer rains prevented growers from getting into fields to plant, he said. “So we’ve kind of had two ends of the spectrum when it comes to wheat,” McCollum said. As elsewhere, Panhandle stocker calf prices are historically high. The first of December, across the primary auctions in the Panhandle, 450500 -pound steer calves were trading from about $2.80 to 3.25 a pound, while lighter end of 500 pound steer calves were going for $2.80 to $3, depending on quality and lot size, he said. But even with calf prices so high, any Panhandle wheat that’s grazable likely will have stocker cattle on it, he said. “If you look at what the prices for light calves were back
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earlier in the fall, stocker cattle producers can project a pretty good net margin in the spring,” McCollum said. As for restocking cow/calf herds, that’s a different matter, he said. True, the improved range conditions are prompting some livestock producers to bring their cowherd numbers up, but there’s some holding back. Most cow/calf operations will be on rangeland or perhaps on retired U.S. Department of Agriculture conservation reserve program acres, and a return to full-fledged drought conditions could change everything, according to McCollum. The prices of cows alone are holding some people back, he said. “The first of December, young to middle age cows that are three to eight months bred — meaning they will be ready
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to calve sometime after Christmas — were bringing $1,700 to $2,700 in Amarillo,” McCollum said. “I’d say the restocking of those areas is fairly tentative right now. There are folks waiting to see if the summer of 2014 was a good year in the middle of a drought or if the drought is actually broken. “Some of these guys are little
January 2015 — Issue 2
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January 2015 — Issue 2
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