Tuesday, 25 April 2017

April 20, 2017 - By Ching Lee - Record rainfall this season has brought abundant grasses for grazing cattle, but some California ranchers say they remain cautious about increasing their herds, awaiting better market prices and another healthy water year.

"Sometimes you don't want to get in too big of a hurry to do these things," said Butte County rancher Myron Openshaw. "One year doesn't make a whole."

(Left) Despite a wet year and plentiful grasses for grazing cattle, California ranchers such as Myron Openshaw of Oroville say they are not in a hurry to expand their herds. With more feed on pastures, some are trying to rebuild after being forced to reduce cattle numbers during the drought. Photo/Ching Lee

Many ranchers were forced to reduce their herds during the drought, as pastures went dry and hay prices soared.

Openshaw said even though the North State received ample rain and snow this year, with good feed to show for it, "we're still not out of the woods yet," noting that some southern portions of the state remain abnormally dry and ranchers there may be reluctant to add cattle.

But for now, he said there appears to be "more activity" in the market, which he described as "upbeat and looking stronger all the time—better than six months ago."

"There's a shortage of numbers, so I think it's going to be positive for this spring," he added.

After attending the Western Video Market in Visalia last week, Joe Dolieslager, a livestock broker for Tulare County Stockyard, characterized the market as "substantially better" than last fall, now that "there's not as many cattle on the market."

Battered by the drought and a lack of grass the last several years, many California ranchers have empty pastures that now have feed on them and they are coming back to the market to purchase cattle, he said. That has put pressure on prices, making it "a seller's market for the last few months," he added.

"We are seeing people restock. They are rebuilding," Dolieslager said. "The future is bright due to the rebuilding because we now have rain and grass."

It will take some time for ranchers in the western United States to rebuild, he said, because their herds were depleted during the drought. As they rebuild, they will retain their heifer crop instead of selling it, and that means fewer cattle available, which will help keep the market more stable for the time being, he said.

But beyond building back what they had before the drought, Dolieslager said he doesn't think too many producers are looking to expand, even with the current improved water outlook and a stabilizing market.

"Expansion is when you have a terrific export market and everybody wants your product," he said. "Nobody is going to expand until we can get our exports balanced out and the imports to stop coming in at a discounted rate."

Through February, U.S. beef exports were up 13 percent in volume above year-ago levels, with strong growth in key Asian markets such as Japan, South Korea and Taiwan, according to the U.S. Meat Export Federation.

There is also new hope that China would allow re-entry of U.S. beef, which has been banned since 2003 after a case of bovine spongiform encephalopathy. This comes after a new deal was announced last week between President Trump and Chinese President Xi Jinping. A $2.6 billion export market for American beef, China agreed last fall to lift its ban, but technical barriers have blocked any real trade, according to the USMEF, National Cattlemen's Beef Association and the North American Meat Institute.

After reducing his herd more than 50 percent during the drought, rancher Dan DeWees said "we're building back up a little bit, but still very cautious about keeping replacements." He runs cattle in Calaveras County during the winter and on irrigated pasture in Merced County during the summer.

He said beef prices so far have not recovered as much as he had hoped, but with the generous rainfall this year, "we're going to have plenty of water for our irrigated pasture," adding that the cost of water also has dropped.

But too much rain has saturated the hill grounds, weakening the feed, he said, noting that his cattle looked "better and bigger" this time last year and he's expecting lighter weights on all his calves.

Sacramento County rancher Jim Vietheer said grasses were slow to come earlier in the season because fields were too wet, but that late-season rains will "make a big difference" for ranchers who rely only on native feed.

"I know the calves that are born in the fall are going to come off bigger because they'll be left on (winter pasture) longer and the feed is so much better," he said. "Certainly, we're going to leave a lot of residual feed for next fall to go into."

As a seed stock producer, Vietheer said he's set on his herd numbers and is not planning to expand. A big portion of his business is selling heifers to junior producers and selling bulls. Unlike the commercial beef market, which has seen major price dips in recent years, Vietheer said his market has improved, with more people buying heifers and quality bulls bringing "good money."

"People are starting to rebuild," he said. "Even at the sale barn, the bred heifers are bringing in a little more money. More buyers are going to be buying some more bulls. But I think it's going to take another year's cycle of good weather to really get people excited."

Although strength of the market will play a key role in ranchers' decisions to grow their herds, San Joaquin County rancher Bill Sanguinetti said another hurdle for them is availability of land needed to expand, noting the conversion of previous grazing ground to more-profitable ventures such as trees and vines.

"The problem is the loss of rangeland—just finding the feed," he said.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)
Reprinted with permission: California Farm Bureau Federation
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