MISSISSIPPI STATE – Pictures of wilting corn in the Midwest may dominate the evening news, but the 2012 drought is also shrinking livestock’s profit potential nationwide.
John Michael Riley, agricultural economist with Mississippi State University’s Extension Service, said the drought means livestock, dairy and aquaculture producers will continue to see higher feed prices.
“Cattle will be the most impacted, both directly -- by a grass shortage -- and indirectly -- by higher feed supplement costs,” he said. “Because of this drought, any species that rely on forages and grains will cost more to feed and maintain, and in the end, consumers will likely feel the tug in their household budgets.”
Riley said last year’s drought was more localized, impacting only a handful of states in the southern Plains. While Texas conditions are not as severe as in 2011, it remains in a drought zone. Currently, about 80 percent of the United States is in some stage of drought.
“The downsizing of the national cattle herd started last year during the Texas drought, and that is continuing this year as producers cope with deteriorating pastures and higher feed costs,” Riley said. “Once this push of cattle to market clears, cattle supplies nationwide will tighten even further as we move into 2013. The result could be higher cattle prices if demand holds up.”
Riley said Mississippi producers should benefit from the higher crop prices and pasture conditions because their land received some July rains, but there are no economic guarantees.
“Pork, catfish and poultry farmers also will feel the effects of the drought with higher costs of production, especially from corn and soybean prices,” he said. “Producers will either have to move their prices up, cut back on production, or more likely, sell out completely -- go out of business -- thus lowering supply down the road.”
Riley said Mississippi should have a better corn and hay crop than other areas, but some early damage could limit the potential of both crops.
“Growers with decent yields will benefit from the higher prices,” he said. “There are isolated cases where fields suffered significant yield losses from the June drought.”
Rocky Lemus, an Extension forage specialist in MSU’s Department of Plant and Soil Sciences, said 60 percent of the state’s pastures were in critical condition at the end of June.