WACO – While Texas ranchers continue to endure drought conditions, they are in a culling mode, scaling back herds by selling older cows, said a Texas Cooperative Extension expert.
But massive selloffs of cattle herds have yet to occur - at least not yet, he said.
"If you talk to (cattle) market people right now around the state, while they have seen an increase in cows coming to town in Texas auctions during first part of 2006, they are still seeing older, broke-mouth,cull cows," said Jim Sartwelle, Extension economist.
"They aren't seeing people who have dug deep into their breeding herds just yet in response to this drought. Right now, we're in a time of year when we plan on feeding cows anyway. But with hay prices going up, we're in a pretty dire spot for seeing some folks cutting deep into what they've put together in a breeding herd."
Sartwelle gave a beef market outlook presentation to producers at the 44th Blackland Income Growth Conference here Tuesday.
Texas ranchers can expect to see some volatility in the slaughter market as more ranchers continue to sell aging cattle and bulls in response to the drought.
"The forecast for next six weeks for rain doesn't look real good," he said.
Meanwhile, the U.S. beef market outlook for 2006 continues to be relatively upbeat. While drought is hampering the prospects of Texas ranchers, other states are aggressively expanding herds where there hasn't been a shortage of rainfall, Sartwelle said.
"Nationally, we've seen expansion in cow-calf numbers in Nebraska, Missouri and Oklahoma, and they are getting on the verge of making up for our losses in Texas and in the west,"Sartwelle said.
The current cattle market will remain upbeat as long as feedlot operators break even and demands for stocker cattle in the feedlot "stay up," Sartwelle said. "If this happens, we'll keep moving cattle forward."
After record prices from 2002-2005, Sartwelle said, there will be a slight decline as beef inventories in other parts of the U.S. continue expanding.
"This is the first time in seven to eight years (we've) seen significant increases in number of beef heifers being kept back for replacement, " he noted.
Drought conditions are keeping heifer replacement rates flat in Texas, while Oklahoma and Missouri are aggressively expanding because of forage availability.
Meanwhile, Dr. Ted McCollum, Extension beef cattle specialist, gave an update on the National Animal Identification System. He explained a 48-hour trackback system is needed to track diseases and follow where an animal has been.
"Why is 48 hours important?" McCollum asked a group of some 200 ranchers in the audience. "Because some of the diseases to be worried about, such as foot-and-mouth disease ... within 48 hours that disease could be spread all over Texas. In order to accomplish this, we need a better system to track animals and find out where they have been and what they have been exposed to."
The system consists of three components: a premise identification program, individual identification program and a tracking system.
Each owner of cattle will be required to register for a premise identification number, which will track the location of cattle on a ranch. Ranchers can register through Texas Animal Health Commission online at http://www.tahc.state.tx.us .
Once the system is in place, all cattle will be required to have a government issued ear tag only when leaving the premise. The ear tag will act much like a Social Security card, with a unique set of 13 digits numbers that will stay with that animal for its lifetime.
McCollum said currently animals will not have to be tagged until prior to leaving a ranch.
"When they leave the place they are born, they will be required to have an animal ID number. That number stays with them for their life."
Many producers wanted to know who is responsible for putting the ear tag in the animal's ear.
"Right now, the basic requirement is for the cow-calf producer to put that ear tag in the animal's ear. It may not require running it through a chute. It may be someone else that can put them in for you," McCollum said.
Another question was cost of ear tags. Currently, McCollum said, ear tags cost approximately $2.50 apiece, which drew some concern from ranchers in the audience. He said the cost for the tags will likely drop when sales volume increases once the national identification system is in place. Currently, less than 10 percent of the cattle in the U.S. are tagged, he noted.
Writer: Blair Fannin, (979) 845-2259,b-fannin@tamu.edu