Rising demand in East Texas has cattle prices on rebound

Ranchers who could hold on in drought are finding profits

02/08/2013 10:06 PM

03/14/2013 2:52 PM

FORT WORTH -- Scorched by drought, some West Texas ranchers are still reducing their herds while cattle raisers on the wetter east side of the Lone Star State are cautiously restocking, creating a "bull market" for some sellers.

"Fort Worth is kind of the line where it all changes. There are a lot of people that are reducing, but cattle prices are as good as they've ever been so it's easy for some guys to sell a few more," said Robbie Schacher of Schacher Auction Services, which is auctioning 500 commercial heifers today at the Fort Worth Stock Show. Last year's auction topped $1 million in sales.

"The people in East Texas who had to sell out two years ago are restocking, and that's driving the prices," he said. "Compared to three years ago, prices are a third to double better."

Bryan Carroll, a manager at 44 Farms in Cameron, said the drought and subsequent sell-off is now paying dividends for ranches that held on to stock.

"For the people in our area, it's been a bull market," he said. "People who were able to get through the hard times, they are reaping some of the benefits right now," he said, noting that 44 Farms reduced its herd of 1,500 by a third.

"A lot of the other big bull sellers dispersed or went out of business. So there's a shortage of bulls and replacement stock out there. Now that there has been some rain, people want to restock, but they are having a hard time finding cattle so you get a premium for the cattle that you do have," he said.

The Texas herd has been reduced by 22 percent, or about 1 million head, over the past three years, according to the Texas A&M AgriLife Extension Service.

"At one time last year, we had Texas cattle in 30 states. There's still not enough grass to feed the herd. They are not coming home, they are staying in the north or going to market," said Jack Chastain, executive secretary of the Fort Worth-based Texas Hereford Association.

"We've got fewer cattle but we're experiencing record high prices for seed stock," he said.

The 89.3 million cattle in the U.S. on Jan. 1 was 1.4 million less than last year, making the nation's cattle herd the smallest since 1952, according the U.S. Department of Agriculture's latest report.

Some of those reductions have come from the T Bar N ranch in Clarendon which has reduced its herd of 500 by 75 percent.

"The drought and the price of feed forced us to reduce," said Nikolyn Williams of the ranch in the bone-dry Texas Panhandle, where a Plainview meatpacker closed last month due to the tight cattle supply.

"Our plan is pretty much like everybody's plan, we are going to try to hang on to what we've got and rebuild from there," she said.

"The plus part is that we've got it down to the best stuff. Looking forward to when we come out of the drought, we are going to be seeing a lot of new techniques like embryo transfers because people are going to want to come back with nothing but the best," Williams said.

That stage is already set, said Schacher. "The herd's been culled. When we get finished with all this we are going to have a very top-notch cattle herd in Texas," he said.

Jeannie Griswold of the Griswold Cattle Company in Stillwater, Okla., which is selling 40 head at the auction, said the drought has been bad, "but we're trying to hold on to everything. We've really tried to hold on to our genetics. I think cattle are going to be in big demand."

Carroll agrees with that assessment.

"It's just like the stock market; you have to ride the waves," he said. "If you see green out in your pasture, you feel like you need more cattle."

Steve Campbell, 817-390-7981

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