Tim Petry, NDSU Extension livestock marketing economist, says drought conditions across the state and region are impacting the cattle market – particularly in North Dakota.
As of mid-July, pasture and range conditions in North Dakota rated poor-to-very poor totaled 71 percent. Surrounding states and percentages include: Montana, 80 percent; South Dakota, 66 percent; and Minnesota, 51 percent.
While there have been pockets of “nice green” pastures, conditions are mostly variable.
“It is pretty green in the southwest, but go five miles and there is nothing for pasture,” Petry said.
In the north central region of the state, pasture and range problems are in “exceptionally” poor shape.
But that is not true in other western states.
“It has been cooler and wetter than normal in other states, such as Oklahoma, Kansas, and Colorado, which has only 4 percent of its pasture in poor condition,” he said. “The main complaint in these states are it is too wet to get in and get haying done. There are a lot of cattle in these states.”
Producers would like to keep their pairs out on grass longer with the price of corn rising.
“With the higher corn prices, we are wanting to graze cattle longer, and put calves out on grass and keep them longer,” he said.
Producers in North Dakota are asking questions: “Should I reduce the herd? How many other feeds are there and what are prices going to be next year?
“There is no cookbook and every producer has a different situation,” Petry said.
For a lot of livestock producers, especially those in the north central region of the state, they will need to continue to cut their herds.
“But it is important to keep a base herd,” he said.
Petry pointed out that higher prices are expected in the next year or two, so if a producer can hang on, he/she should.
The livestock sales barn in Rugby, N.D., continues to hold cattle sales, with some 1,400 pairs are sold every week.
Fed cattle prices and corn prices are the two most important things affecting fed cattle prices in North Dakota.
“Fed cattle prices have steadily improved throughout the year,” Petry said.
In 2021, prices in July have improved to $123 per hundredweight.
“Prices right now are way higher than they have been in the last three years,” Petry said.
In 2019 and 2020, the U.S. reduced the cowherd.
“With what is happening with the drought, especially in the north central region of North Dakota, the cowherd will probably be reduced a little more yet,” he added.
Futures prices are higher, as well, with the April 2022 price at $139 per hundredweight.
“By the end of 2022, we’ll be pushing $140 (per hundredweight) – the best prices we have seen since 2016-17,” he added.
Feeder cattle prices are being boosted upward from the economy opening up, especially restaurants, and more beef demand.
With beef exports, there are record exports being posted.
“Prices will continue to rise unless there are unknown factors impacting the market along the way,” Petry concluded.