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June 8, 2012
Some early indications show that despite improvements in areas hit by drought last year in the U.S., there is plenty of room for worry. Starting in May, USDA issues a weekly report that evaluates pasture and range conditions on a five-point scale: excellent, to good, fair, poor and very poor. The report is published as part of the crop conditions report for other crops. The latest update showed that, for the week ending June 3, 46% of pastureland and ranges in the U.S. were in good or excellent condition. This compares to 53% good/excellent conditions last year. The 10-year average condition for this time of year also is around 53%.
Pastures rated in poor or very poor condition accounted for 22% of the total, compared to 24% last year. Pasture conditions are worse than a year ago and the 10-year average despite a significant improvement in the situation in Texas and Oklahoma. Last year, 74% of the pastures in Texas were rated in poor or very poor condition. This year, only 36% of pastures are in bad shape.
The problem appears to be that while this area of the country has improved, other areas are showing significant deterioration compared to last year. Things could improve in a hurry should we have a normal or above-normal hurricane season this year, which would bring more rainfall inland.
A number of areas in the Midwest have experienced below normal precipitation in the last month, negatively affecting pastures. If current conditions continue, then we will likely see more pressure on producers around the country despite record feeder cattle prices.
Hay supplies are very tight, as evidenced by hay prices that are at record high-levels. The margin for error this year has become even smaller. Our working assumption and forecasts are for a return to a more normal rainfall pattern, which would cause beef cow slaughter to decline notably from last year. But with pasture conditions close to 2002 levels, that working assumption may need to be revised and herd rebuilding will have to wait for another year.
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