Agricultural News
OCA Executive Director Compares Current Drought with 2011, Previews Upcoming Convention
Fri, 20 Jul 2012 15:56:13 CDT
As the 2012 drought continues to worsen across Oklahoma and a large part of the Midwest, Scott Dewald, executive director of the Oklahoma Cattlemen's Association, compared it to last year's catastrophe for the state's cattle producers. In some areas, he told Ron Hays during a recent interview (which you can hear by clicking on the LISTEN BAR below), some producers are not being hurt as badly as last year, while others are seeing a continuation of the hardships of last year's drought. All in all, he says, many of his organization's members remain cautious and in "drought management mode."
"While we were at the epicenter last year, if you consider far western Oklahoma and you look at the northeast corner of the state of Oklahoma, they never came out of it. Those guys continue to be dry and so they've suffered drought conditions where the middle two-thirds of the state of Oklahoma experienced some good rains early this year. We grew a lot of hay; put a lot of hay up. And, so, some hay's been put in the barn.
He says the demand for that hay is not as high this year because, "we've already, and I hate to use the term, but we've liquidated a lot of those cows, so there are fewer mouths to feed."
Even with fewer mouths to feed, Dewald says producers are likely to see their feeding costs continue to rise due to the hot dry weather across the corn belt.
"The other thing about this year's drought that may have as much if not more impact than last year's drought is the fact of what it's doing to corn prices and soybean prices in the Midwest. If we can't grow corn and we can't grow beans, we could see some extremely high costs for protein and for feed. And so that is, obviously, going to have an impact as well."
There has been a significant drop in cattle prices as producers move more animals to market because of the drought. Feedlot operators are bleeding red ink and Dewald doesn't see that trend changing any time soon.
"In Oklahoma, I think what you're going to see is another year of a lack of production. If you can't grow grass, and you don't have feed, you just can't produce pounds of beef. We're in the business of producing pounds of beef and if you can't do that, you just lose that productivity.
Farmers and ranchers are optimistic by nature, Dewald says, and most are trying to make the best of a bad situation.
"So we always have that hope that we'll get into August and it will be one of those very mild Augusts and we'll start to get those rains this fall. We are starting to see some of those ponds dry up, but not nearly as bad as last year because of those early rains."
Dewald said a lot of producers he's talked with are trying to do what Oklahoma cattlemen have been doing for a long time-simply holding on.
"A lot of them were already in 'drought-management' mode coming into this summer because they were trying to let those pastures heal up, so they weren't restocking in huge numbers. There was still that skepticism that the drought wasn't over. So I think that abundance of caution, if you will, and being in that management mode of managing for drought I think will pay dividends to these guys. They're not going to have an oversupply of cattle to get rid of in this down market economy."
The ongoing drought will certainly be one of the major topics of discussion during the Oklahoma Cattlemen's Association that kicks off July 26 in Midwest City, but it won't be the only topic on the table, Dewald says.
"We started planning this thing back in January and February, lining up speakers in March. And I honestly thought that while the cattle market outlook has always been a popular function of our event, I thought this is one of those years that's not going to be that complex or complicated of a deal so it may not have as much interest as usual. I spoke to the speaker the other day, Don Close, who used to be at Texas Cattle Feeders and is now with Bravo Bank and I said, 'Don, I think your topic is going to be the most important topic of the day.' It's what's going to happen with the grain markets, what's corn and beans going to do. What's going to happen in the wheat market? What's going to happen in the cattle market? What's going to happen with demand?
"All these things are very, very topical. So, it's surprising that over the course of four months, you have a huge shift as you see the drought in the Midwest particularly affecting the grains."
"In November there's going to be an election, balloting on the six state questions, one of which is to lower from five percent down to three percent the cap on how much ad valorem taxes can go up. I see no reason why we wouldn't 100 percent support that notion on that state question. We'll obviously have a discussion about the state questions and what they're going to be faced with when they get to the ballot box in November.
"I think there will also be a lot of discussion in the hallways, not necessarily in our business meetings, about the politics and what's going to happen with the 2nd Congressional race? What's going to happen with some of the state House races and some of the Senate races? What's going to happen with the presidential election? I think there's going to be a lot of discussion about that.
"We'll continue to have discussions about water and what's going to happen with the water issues. Of course, until the task force that the governor and the chiefs have put together on water and who essentially owns it in the far southeastern part of the state, there's not a lot of things we can do or say, but we do need to be fairly informed on that.
Dewald says registrations have been coming in at a quick clip and he expects a good crowd. He said the trade show has been sold out for some time.
For more information on the Oklahoma Cattlemen's 60th Annual Convention and Trade Show, please click here.
Click on the LISTEN BAR below to hear more from Ron Hays and Scott Dewald.
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