In Drought, Ranchers Sending More Cattle To Auction
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On a recent Thursday, hundreds of cattle filled row after row of metal pens behind Lockhart Auction. In the past few weeks, the number of cows being brought to sale barns around the state has climbed dramatically.
One of the worst droughts in Texas history has led to more than $5 billion in agriculture losses since November, according to a report from the Texas AgriLife Extension Service.
The drought is leaving cattle ranchers with some tough decisions to make.
Double, even triple the number of cattle are being brought to auction, compared to the same time last year.
In the middle of the worst single-year drought in Texas history, the cost of feeding a cow is about five times higher than normal.
“People have finally gotten to the point of whether they’ve been feeding and trying to buy feed or hay or things like that, and the cost is just getting too high for them to be able to justify keeping the cow,” said Tim Van Dohlen, one of the owners of Lockhart Auction. ”So they decide to turn the cow into money.”
Inside the auction building, the cattle are guided through a narrow chute. One at a time, they go through a metal door into a fenced area. They parade in front of a crowd of mostly men in cowboy hats sitting in rows of theater seats, as the auctioneer calls out prices. When there’s a winning bid, the cow exits, stage right.
“Some of the cattle that are here are being bought to go out of state, other areas that have had rainfall [and] have got grass to sustain a cow herd. But that’s not the vast majority. The vast majority go into the food chain,” said Van Dohlen.
That is, maybe a few of these cows will end up as brisket at one of Lockhart’s famous barbecue joints down the street.
Some expect at least a few people to get out of the business entirely.
“Really since about 2006, we’ve been basically dry – all this area has,” said Lee Baker, who’s been in the cattle business in Gonzales for about 40 years. ”We’ve had a few times when it’s rained a lot, but just over a couple a months, and then we go back to a dry period. So it’s been a hard fight the last five years, really.”
Baker sold off part of his herd a few months ago. He says the sheer number of cows being brought to auction now is driving down prices, and that might make it difficult for some ranchers to get back into the game when the drought breaks.
“You sell a thousand pound cow for $500, and if you go to replace her when it does rain some, you’ll probably pay $1,000 to $1,200 for one – so you’re in the hole pretty good from what you sold to what you’re going to have to buy back,” said Baker.
“As we continue to shrink the size of the herd because of the drought conditions, absolutely when we come back in, everybody’s going to be wanting to come back in, prices are going to be higher,” said Dr. Larry Redmon, a forage specialist with the Texas AgriLife Extension Service.
Redmon says even at a loss, ranchers are better off getting out until the drought is over, “but I still maintain it will be cheaper to do that than try to feed your way out of the drought.”
In the short term, the sell-off could mean lower prices for beef processors, but that isn’t likely to translate into lower prices at the grocery store.
Even when it does rain again, analysts say it could take three years for the cattle industry in Texas to recover.
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