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Published Thursday, September 03, 2009 6:05 AM

Texas cattle prices remain steady despite harsh drought

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Eagle photo/Stuart Villanueva
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Eagle photo/Stuart Villanueva
The Navasota Livestock Auction, lighter-weight calves are being sold because ranchers are trying to get their cows in shape for winter and help with forage regrowth.
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Eagle photo/Stuart Villanueva

It's no secret that ranches have had a tough year: As the economy dried up, so did the stock tanks and grazing grass.

But a silver lining is emerging as cattle prices remain constant.

"Prices have been holding steady for the last couple of months," said David Anderson, livestock economist with Texas AgriLife Extension, based in College Station.

He said steers weighing 500 to 600 pounds were bringing an average of $101.27 in the week ending Aug. 21.

"That's about what it had been for the last two months before that," he said.

Heavier cattle have shown slight price declines, he added.

Anderson explained that during the 2006 drought, cattle prices were lower and fluctuated more because the state's cattle inventory was larger.

According to the Texas Agricultural Statistics Service, as of Jan. 1 there were more than 5.17 million beef cows in Texas. In 2008, there were 5.15 million head of beef cows; in 2007 -- 5.22; in 2006 -- 5.35; and in 2005 -- 5.38.

Anderson said he tends to focus on beef cow numbers because that's the productive part of a herd. It is a good indicator of whether inventories are increasing or declining -- statewide and nationally

"Nationwide we're reducing the number of beef cows," he said.

Texas still ranked No. 1 in the U.S. for total inventory of cattle and calves as of Jan. 1, with 13.6 million head, followed by Nebraska, Kansas, Oklahoma and California.

The U.S. isn't alone in reduced cattle inventories.

"Just about every beef-producing country in the world is reducing cattle numbers," Anderson said.

High input costs, the economy and drought have contributed to cattle inventory declines in other countries, Anderson said.

In the Brazos Valley, thousands of head of cattle are being transported on area roadways. Recently, during an eight-day period, more than 10,000 head of cattle were sold at six Brazos Valley livestock auction facilities.

There's typically an increase in the volume of cattle being sold at this time of year, with more calves going to market.

"We're in the time of the year when the cattle normally come anyway," said Greg Goudeau, owner of Navasota Livestock Auction.

He explained that in a typical cattle cycle, prices do trend lower in September, October and November. In the fall, the livestock auction usually averages 2,000 head of cattle at the weekly Saturday sale.

Goudeau said he'd been seeing lighter-weight calves being sold because ranchers are trying to get their cows in shape for winter and to help with forage regrowth.

Grimes County, where the auction barn is located, has been receiving scattered showers, and some forage recovery has started. Though Grimes County remains under drought status, big volumes of cattle haven't been sold off, Goudeau said.

The volume of cattle sold is 7 to 10 percent higher than last year, he noted.

In Caldwell in Burleson County, recent rains have also eased the drought for the few ranchers fortunate enough to be located where rains fell. Burleson County has been suffering under extreme drought conditions for months.

"We're seeing a lot larger runs for this time of year than we normally do. It's slowed down a bit from the last month," said Jerry Armstrong, co-owner of Caldwell Livestock Commission. "It has rained in areas between Caldwell and Bryan."

Armstrong also is receiving a higher percentage of lighter calves at the weekly Wednesday sale.

There have been some complete herd sellouts, Armstrong said, adding that people were just trying to hold on to their core herds.

"The one good thing is the prices for the cattle have held pretty good and feed's come down some," Armstrong said.




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