OSU Extension's Derrell Peel Estimates Cattle Operation Losses from Wildfire Damage Exceeds $26MMon, 07 May 2018 10:53:45 CDT
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 examines the impact being felt by Oklahoma's beef industry in the wake of recent wildfire damage across the northwest portion of the state.
"As expected, drought conditions continued to expand last week after rains two weeks ago resulted in a brief halt to worsening drought in Oklahoma. The latest Drought Monitor indicates that 34.8 percent of Oklahoma is in D3 (Extreme) and D4 (Exceptional) drought including 10.7 million acres of D4 conditions in western Oklahoma and the panhandle. The last 180 days in the Oklahoma panhandle have been the third driest ever while western Oklahoma is the fifth driest on record for this period. April was colder than usual but with warmer May temperatures drought conditions will expand rapidly unless rains come soon. Above average temperatures in the southern plains are forecast for the next two weeks with below average probability of precipitation.
"Iím not aware of any cattle liquidation in the worst drought areas yet. However, hay supplies are tight and if summer pastures do not develop in the next month the situation will be much more critical. Significant removal of cattle could begin by June. The total D3 and D4 drought area in Kansas, Oklahoma and Texas is currently 53.5 million acres. This area has a carrying capacity between 2.0-2.5 million animal units. The drought area and the number of cattle impacted could expand rapidly in the coming weeks.
"The April wildfires in Oklahoma have been the most significant drought impact thus far. The rain two weeks ago helped bring the wildfires in western Oklahoma under control. The fires burned over 348 thousand acres and destroyed numerous houses and ranch facilities. Current estimates suggest that some 1600 cattle died in the fire with numerous others burned and hurt. At least 2100 miles of fence were damaged or destroyed. The burned pastures and hay left many thousands of animals displaced and in need of emergency feed. Demand for hay and pasture from the fire is adding to pressure on diminished hay supplies in the broader drought area.
"My estimates of wildfire losses based on preliminary information currently available sum to a total of $26.4 million for cattle operations. Estimated cattle industry losses in Oklahoma include $16.4 million for fence replacement and repair; $1.4 million for livestock killed or destroyed as a result of the fire plus veterinary costs and reduced value of surviving injured animals; $6.3 million for burned facilities and corrals; $1.6 million for emergency feed; and $0.66 million for burned pasture and hay. These totals do not include any estimates for vehicle and equipment losses or homes or other personal property destroyed in the fires. These estimates may increase as a more comprehensive assessment of the losses is completed.
"The drought can pass with little significant additional impact if rains arrive very soon. Failing that, the drought will become a major issue in the next few weeks."
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