Beef Magazine is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Wildfire concern continues in drought regions

Wildfire concern continues in drought regions

It’s been a hot summer for just about everyone and for some, a dry one as well. While that has sparked a number of wildfires, the onset of fall should drop the risk. Here’s USDA’s outlook on the fall wildfire risk.

According to USDA’s weather outlook, very dry conditions continue across the northern Great Basin and parts of the northern Rockies. Most of this region is dominated by brush and grasses and receptive to ignition. Timber fuels at higher elevations are also receptive in Idaho and southwestern Montana, and to a lesser extent, Nevada.

Activity in the interior West will quickly decrease in September as cooler, wetter weather and shorter burn periods reduce the potential for significant wildfires.

California however, remains in a prolonged extreme to exceptional drought. Conditions in the mountains and foothills support increased fire activity in the right conditions. This increased potential will continue through September.

catte nutrition gallery

70+ photos showcasing all types of cattle nutrition
Readers share their favorite photos of cattle grazing or steers bellied up to the feedbunk. See reader favorite nutrition photos here.

 

Very dry conditions in the southern U.S. suggest an elevated potential for increased fire activity. Hot and dry July and early August across central Texas could lead to an active fall fire season for the region.

Similarly, the southern Appalachians to the lower Mississippi Valley have also experienced very dry conditions this summer and could carry higher potential for fires into September during the leaf drop period. However, a significant tropical system could bring enough rain to reduce that potential.

By October, most of the western U.S. is out of fire season as colder weather and winter precipitation improves fuel conditions and the potential for starts decreases with less lightning activity in the region. California moves into its peak season for wind-driven fires in the southern mountain ranges. Ongoing drought conditions increase the potential.

The Southeast and Mid-Atlantic regions, particularly the Appalachians, remain at elevated risk as fall leaf drop season continues.

 

 You might also like:

Do small cows make more money?

13 utility tractors that will boost efficiency

How to get more value from your cull cows

14 thoughts to help get those heifers bred

Photo Tour: World's largest vertically integrated cattle operation

Young ranchers, listen up: 8 tips from an old-timer on how to succeed in ranching

Young ranchers, listen up: 8 tips from an old-timer on how to succeed in ranching

“Land is too expensive.” “You'll never be able to make money.” “Get a real job and forget about it.”

These are just a few sentiments a young person often hears after voicing their goal of owning a ranch. True, land is scarce and expensive, and turning a profit in the cattle business depends upon a volatile cocktail of weather, futures markets, hard work and luck; but ranching is still an achievable vocation.

Nelo Mori, now 91, started a ranch in northern Nevada from scratch as a young man. Now, four generations of his family live and work on his ranches, spread over multiple divisions from Lovelock to Tuscarora.

“I tell you what, whoever starts out young, unless someone helps you or gives it to you, it's pretty hard,” Mori says.

Hard, but not impossible. By making smart choices and dedicating yourself to your ambition, owning a ranch is still possible. “You have to sacrifice and change your lifestyle to be able, as a young man, to be able to start ranching,” Mori says.

When he was a young man, Mori loved to rodeo. But he sacrificed that expensive hobby in order to fully pursue building his own ranch. “My life's dream has always been to be a rancher, and that's why I quit,” he said.

Mori acknowledged that many ranchers hold outside jobs or have other businesses besides ranching. “If you don't have nothing else but ranching, you better get with it and sacrifice and change your lifestyle,” he said. “It's gonna be tough; you bet it'll be tough. But, the good times will come.”

Here are Mori's tips for today's young ranchers.

1. Sacrifice luxury items such as expensive hobbies, new pickup trucks and cars, and brand-new equipment. “A new truck, no doubt you'll need it, but you just can't afford it. You can't go out there and buy one of those fancy tractors. Nowadays, they'll break you doing that,” Mori says.

2. Make do with older tractors, balers, and other farm equipment. “You have to fix them, and learn to fix them,” Mori says.

When Mori bought his ranch at Jack Creek in 1958, the buildings were run down and the house was infested with rats. He cleaned up the infrastructure, demolishing and improving as needed over the years, and now his great-grandchildren live on the ranch that he started.

3. Be ready for an upturn in the cattle market.

“You have to take advantage of it, you want to be ready for it,” Mori says. “Right now, we had a really big spurt in cattle prices, and I tell you what, this helped everyone.”

4. Beware of the temptation to buy a brand new pickup with your calf check in a flush year; see #1.

5. Adjust your traveling and lifestyle to revolve around the ranch. Annual vacations, except to the Elko County Fair, usually aren't in the cards for a northern Nevada cattle rancher. “You gotta stay home and do the work. It'll take you longer to do it with the antiquated equipment,” Mori says.

6. Marry well. “You need a good wife to do it with or you're not going to make it,” Mori advises young men. He has been married to Ida May for the majority of his life, and she has played an integral role in developing his ranching business.

Traditionally, ranch wives did all the cooking and errand-running, retrieving machinery parts and other supplies from town as needed. Nowadays, many these ranching partners also keep the books on home software programs and take care of business correspondence via email, among many other ranch jobs.

7. Cultivate and maintain good friendships. The ranching community is a tight network, and its members are happy to help each other out during tough times.

“I had a lot of friends, whenever I got in trouble, which I did several times, they were there right now. They always helped me. That's really important, in ranching especially, to have good friends and a good family,” Mori emphasizes.

8. Get a good banker who understands agriculture and will work with your unique situation. Sometimes, a rancher will be unable to make his loan payment on time, so be sure and explain this to your banker in advance of the bill date.

For those looking to finance their ranching venture, the Farm Service Agency targets a portion of its loan funds to small and beginning farmers and ranchers. By their definition, this is someone who has not operated a farm or ranch for more than 10 years; does not own a farm or ranch greater than 30% of the average-sized farm in the county; meets the loan eligibility requirements; and substantially participates in the operation. Visit their website for more information.

Here are a few more tips for young ranchers:

  • Find a successful rancher and talk less and listen more
  • Learn what works and what doesn't work in new country
  • Be open-minded, but follow what works
  • Always be willing to learn. Take advice and criticism.
  • Start building positive relationships with others in the industry, from neighbors to co-workers and bosses
  • Work at different ranches to learn different ways of doing things
  • Talk to older generations and ranchers in your community who may help you get started by selling you feed, trading work for cattle or letting you run your own cattle alongside theirs
  • Become a Young Cattleman through your local cattlemen's association and attend conferences and conventions to learn the latest trends and most efficient practices
  • Save all your money and work your [rear end] off.

This article was originally printed in the April 2016 edition of the Nevada Rancher magazine. To read more from the Rancher, visit www.news4nevada.com. More of Jolyn Young's work can be found at www.jolynyoung.com.

 

 You might also like:

Do small cows make more money?

13 utility tractors that will boost efficiency

How to get more value from your cull cows

14 thoughts to help get those heifers bred

Photo Tour: World's largest vertically integrated cattle operation

Connecting the dots between job creation, interest rates and you

Connecting the dots between job creation, interest rates and you

Much of last week’s economic headlines revolved around the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming. At the top of the list came Federal Reserve Chair Janet Yellen’s speech on Friday. The markets listened carefully in an attempt to handicap the likelihood of the Federal Open Market Committee (FOMC) raising the benchmark federal funds rate (the overnight bank lending rate) as part of their upcoming September 20-21 meeting.

Traditionally, the FOMC made those decisions based largely on their assessment of the nation’s economic growth rate.  However, since the financial crisis and the huge plunge in employment, the FOMC has largely operated under the “dual mandate.” That is, FOMC monetary policy is now directed by both inflation and employment in the United States.

With that in mind, one of the key indicators for consideration stems from the Bureau of Labor Statistics. The agency’s Jobs Report (formally known as the Employment Situation Summary) is highly anticipated every month by traders as proxy for economic growth. The August report marked 255,000 new jobs being created in July – well ahead of pre-report expectations. The next report is scheduled for Sept. 2 and will be a key for any change in rate policy going forward. 

Monthly job report

All of this discussion is important with respect to the interest rates, the general economy and the connectivity to beef demand, agricultural loan rates, exchange rates and export markets, and a whole variety of other considerations. What’s your general assessment of the economy? What do you think the FOMC will do in September? What impact would a quarter-point rate increase have on agriculture and the beef industry? Leave your thoughts in the comments section below.

Nevil Speer is based in Bowling Green, Ky., and serves as vice president of U.S. operations for AgriClear, Inc. – a wholly-owned subsidiary of TMX Group Limited. The views and opinions of the author expressed herein do not necessarily state or reflect those of the TMX Group Limited and Natural Gas Exchange Inc.

 

 You might also like:

Do small cows make more money?

13 utility tractors that will boost efficiency

How to get more value from your cull cows

14 thoughts to help get those heifers bred

Photo Tour: World's largest vertically integrated cattle operation

The good news? Corn prices will stay low. Ready for the bad news?

Without major weather damage on crop production Dan Basse sees the average cash corn price at about 340 per bushel for the 20162017 crop year
<p>Without major weather damage on crop production, Dan Basse sees the average cash corn price at about $3.40 per bushel for the 2016-2017 crop year.</p>

Despite low grain and cattle prices, cattle feeders and producers shouldn’t drop their guard on risk management, even though fractured cattle futures contracts are hindering hedging opportunities, says Dan Basse, a leading commodities analyst and president of AgResource Co.

Basse’s outlook for cattle and feedstuff production and marketing are always anticipated at the annual Feeding Quality Forum (FQF) presented partly by Certified Angus Beef. But his message presents some blunt truths.

“Chicago is broken. There’s trouble with risk management on your side of the table. There is distrust of the CME cattle futures markets,” says Basse, who spoke at FQF sessions last week in Garden City, Kan. and Amarillo, Texas.

“The CME live cattle contract is $10 (per cwt.) under valued. There are not enough cattle traded on negotiated grids to develop a true price…. We need a beef contract that is USDA-reported every day that is not manipulated, that can be tracked and that is cash settled.”

seedstock 100

BEEF Seedstock 100 List
Looking for a new seedstock provider? Use our UPDATED Seedstock 100 listing to find the largest bull sellers in the U.S. Browse the list here.

 

Basse sees continued bearishness in the cattle market. “We still see pressure forthcoming in prices. Cash cattle should see a $95 to $97 per cwt. bottom,” he says. “But cattle feeders still need to have their margins protected. We need protection enough in order to be around for the next bull market. Anytime you can lock in something that has green on it – do it.”

Cheap corn? 

Basse remains bearish on corn, but urges against complacency. “With record supplies of corn and other grain worldwide, cattle feeders and producers should expect low grain prices to continue,” he says. “You don’t need to worry about running out of feed supplies. However, we’re not as bearish as we have been and encourage cattle feeders to not be overly bearish on grain.”

His reasoning lies in the chance for a dreaded La Niña weather pattern similar to the one that dried up much of the grain production in the Corn Belt just a few years ago. “Weather will be the biggest grain price mover in 2017,” Basse says. “Cattle feeders should be concerned about grain markets next year.”

Without major weather damage on crop production, he sees the average cash corn price at about $3.40 per bushel for the 2016-2017 crop year. But with large national and world stocks brought on by continued strong production, the U.S. could see corn slump to $2.75 the next five years.

Depressed corn prices are a signal that more Midwestern acres will go into soybeans. “I think we’ll see more bean acres than corn acres next year,” Basse says, adding that only a federal crop management program will entice farmers to reduce production. “Farmers don’t let land lay idle. We need the government to do something to manage supply because farmers don’t do a good job of it.”

Other things that may impact grain prices are U.S. exports to China and other countries and factors that may create roadblocks. “Argentina is approaching as an agriculture export powerhouse, with big tax and currency incentives to producers,” Basse says.

The value of the U.S. dollar also remains bullish, which make foreign feedstuffs sold using other currencies less costly to would-be buyers of U.S. commodities. Basse says another twist that could impact corn prices is discussion that “zika-free grain certificates” may be needed for sales to China.

Other market influences 

Pete Anderson, director of research for Midwest PMS, agrees that some form of risk management “is more critical than ever before” due to forces feeders and producers cannot control.

He points out that consumers are paying retail beef prices similar to what they were when live cattle prices were in the $150-plus range, even though cattle prices are now far lower and packers are enjoying huge margins. “Packers are fully utilized (in kill capacity) and they have high margins,” Anderson says. “Packers have the leverage.”

That leverage is similar to when fed prices were high and packer margins were squeezed. “We (cattle feeders and producers) didn’t give any back when we had the record prices and they’re not going to share with us now,” Anderson says. “It’s a cyclical system and will return to normal.”

Larry Stalcup is a freelance writer in Amarillo, Texas.

 You might also like:

Do small cows make more money?

13 utility tractors that will boost efficiency

How to get more value from your cull cows

14 thoughts to help get those heifers bred

Photo Tour: World's largest vertically integrated cattle operation