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Agricultural News

With Dry Conditions on the Rise, Derrell Peel Advises Producers on Strategies to Survive a Drought

Mon, 30 Apr 2018 11:34:23 CDT

With Dry Conditions on the Rise, Derrell Peel Advises Producers on Strategies to Survive a Drought Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel offers producers advice on how to strategize as they plan for the next few weeks with exceptional drought conditions on the rise across Oklahoma.

"The latest Drought Monitor shows rapid expansion of the exceptional drought (D4) area to include about 38 million acres with another 126 million acres of D3 (extreme drought) conditions. Parts of the drought region received some rain in the past ten days; enough to slow expansion of drought conditions, but not enough to reduce drought without additional moisture.

"About two-thirds of the D4 area is in the Texas Panhandle; western Oklahoma, including the panhandle; and southwest Kansas. In this shortgrass prairie region, May is a critical period when summer forage growth begins in earnest. If normal forage growth is absent or significantly delayed, cattle producers will face some critical decisions rather quickly in the next few weeks. Producers need to develop drought management plans now to survive in the face of a potentially extended drought that threatens the entire growing season.

"One strategy is simply to hunker down, try to hold on to everything, and acquire feed resources to try to skimp animals through the drought. There are several risks to this strategy. First, the “get by” strategy of managing cows through a drought may simply postpone drought costs into future years by negatively impacting reproductive performance and future production. It’s important not to keep more animals than you can properly take care of. Another risk is the potential to hold animals but incur so much cost that the financial health of the business is compromised for a long period or the economic survivability of the business is jeopardized. Finally, abusing forage resources during a drought can lead to damage that requires years to recover from and implies reduced future production to allow time for the land and forage to heal after severe use. A comprehensive, detailed plan will help remove as much emotion as possible and will make it easier to make tough, timely decisions and is very important as well for the short and long term mental and physical health of the producer and families involved.

"The sooner a producer can evaluate and inventory resources, the more opportunity will exist to make decisions rather having decisions forced on them. Water, in some cases will provide a harder deadline than feed. Producers relying on surface water must calculate available water supplies and use that to determine how to allocate limited water over time. Additionally, it’s important to evaluate forage and feed resources available today, including standing forage, hay and other feed resources. The drought management plan should be based on that amount of feed availability and assume no or little new forage production. Very critical, but often overlooked, is to evaluate financial resources and realistic limits on additional costs.   

"At a minimum, drought results in some increase in costs. A critical component of the drought management plan is when to switch from “hunker down” to an active plan that involves revising production activities. This might include different production systems such as drylot production of some cattle or relocating cattle to another region. When animal numbers can no longer be maintained it is important to remember that liquidation is not an all or nothing proposition. Make a priority list of what animals to sell and when that decision must be implemented. It may be helpful to determine the last core of animals that would be maintained prior to total liquidation and then work backwards to figure out what order of liquidation would get to that point, if necessary. It’s essential to have action dates and follow the plan. Dates can be revised as needed if conditions change but not having dates results in emotional anguish and the temptation to “hang on for a few more days” that often results in bigger long term consequences.

"We never know how long a drought will last but whether it’s a few weeks or a few months or possibly many months, it’s important, not only to figure out how to survive the drought, but to manage for the post-drought period during the drought. At the end, business survival is an economic question, not a just a matter of how many cattle we can hold onto for another two weeks…or a month…or whatever."



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