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Sturgis, SD

Optimism

From the Rapid City Journal, February 13th, 2013:

Talk about your eternal optimists.

Those in the ag industry in western South Dakota face drought, high gas prices and high feed prices, but continue to shoulder on.

“You hope for the best and plan for the worst,” said Rich Blair, who ranches northeast of Sturgis.

Blair was in Sturgis Saturday for the annual Northern Hills Ag Fest and Home Show. Previously known as the Key City Pen of Three, area ranchers are encouraged to showcase their livestock on the grounds adjacent the Sturgis Community Center.

Rich and his brother, Ed, make up the family cattle operation known as Blair Brothers Angus. The Blairs provide Angus genetics for commercial cattlemen from Texas to Canada. Stacked pedigrees of proven bulls have gained them a reputation for cattle that perform in the feedlot and on pasture.

“We raise the kind of bulls we wanted,” Blair said. “They’re highly proven to produce offspring that will be easy calving, have a quick growth curve and high marbeling in the ribeye.”

Rich Blair said they finish most anything that doesn’t get retained as breeding stock. And, their focus is on certified Angus beef.

Even though Blair knows other producers have been knocked out of the business by drought, he remains optimistic.

“We lived last year on the wet weather from the two years before,” he said. “Areas around us seem to be getting some moisture — and moisture feeds on moisture.”

The U.S. Department of Agriculture’s National Agricultural Statistics Service cattle report released on Feb 1 confirmed what many cattle market observers had expected: The record-setting drought in the southern Plains in 2011 that expanded into much of the country, including the Corn Belt in 2012, caused lower cattle numbers.

All cattle and calves in the U.S. on Jan. 1, 2013, totaled 89.3 million head, which is 1.6 percent below the 90.8 million on Jan. 1, 2012. This was the lowest Jan. 1 inventory of all cattle and calves since the 88.1 million head in 1952.

But the report also shows that the beef industry produces much more beef with the same number of cattle that existed in the 1950s. Beef production totaled 25.9 billion pounds in 2012, compared with just 9.3 billion in 1952.

“We have been able to produce more because the size and carcas weight are bigger,” Blair said. “Where a cow back then would have weighed 700 to 800 pounds, they now weigh 1,200 pounds or better.”

Beef cows in the U.S., at 29.3 million head on Jan. 1, were down almost 3 percent from the previous year. By far, Texas is the leading beef cow state, with more than 4.01 million cows on Jan. 1. Compare that to second-place Nebraska at 1.81 million beef cows. The number of beef cows in Texas was down 12 percent on Jan. 1, compared with 2012. This was down 9 percent from the previous year as well, for a total two-year decline of more than a million head. Beef cows in Nebraska declined 4 percent from last year. Beef cow numbers in third-place Missouri were down 5 percent and fourth-place Oklahoma lost 1 percent. All of those states were hard hit by drought conditions.

In contrast, northern states that were not as severely affected with drought saw increasing beef cow numbers. Minnesota, North and South Dakota, Montana, Idaho and Washington combined for a 243,000-head increase in beef cows.

Eve Vavra, who raises registered Gelbvieh and balancer bulls with her husband Brent near Nisland, says drought or not, she and her husband have always operated conservatively.

“I call it a labor of love,” she said of ranching and raising cattle.

And they understand that conservation goes hand-in-hand with ranching.

“We have made a point of grazing half and leaving half, so we had grass this past year,” Vavra said. “The land will continue to provide for use if we take care of it.”

Paul Bisson, an ag lender at Wells Fargo Bank in Sturgis, said continued drought will test the optimism of ranchers, but not break their spirit.

“They’re not going to make major changes to their game plan. That’s what makes them survivors,” he said. “They live within their means and have a well-balanced approach to their finances.”

Bisson says that if a producer has to sell down some of their herd, they most likely have enough margin built into their business plan to survive.

And when the moisture comes and the grass starts greening up again, responsible, level-headed ranchers will still be around.

“They’re good risk managers,” he said.

Original Article