Cattlemen faced high input costs, regulatory challenges
By Carol Ryan Dumas, Ag Weekly editor
Monday, December 22, 2008 1:14 PM CST
TWIN FALLS, Idaho - “I think 2008 was an interesting year,” said ICA President-Elect and commercial cow/calf operator Carl Ellsworth of Ellsworth Angus Ranch, Leadore, Idaho. “It started out fairly stable but then was pressured by high feed costs.”
Lofty corn prices came first, hitting feeders hard, followed by record-high hay prices that made things tough for cow/calf operators.
Wilson Gray, University of Idaho Agricultural economist in Twin Falls, said cattle prices didn’t keep up with increases in fuel, hay and grain costs, and most producers didn’t cash flow all year.
“Two-thousand eight is probably the worst year ever for feeders, worst in 10 years for cow/calf (operators,” he said.
Prices were weaker going into 2008 than the industry has seen in a few years, he said. Prices for 500 lb. to 600 lb. calves, usually sold in the fall, have fallen from $116-$118 lb. to $100-$105 lb. in the last six weeks. That average price was $126 in 2006, $122 in 2007, and will likely be $115 for 2008, he said.
“We’ve seen cow slaughter up most of this year, due to lower prices and higher feed costs,” he said.
“It doesn’t make things real rosy for 2008,” Ellsworth said. “The state saw a tremendous decrease in cattle numbers, especially in the feeding industry. The lack of feed and places to get them (animals) harvested is pretty tough.”
Gray said Idaho’s inventory numbers for 2008 will be down 1 percent to 1-1/2 percent-about 4,600 head, following a 2.7 percent decrease in 2007 due to wildfires.
“Basically, (nationwide) the cow/calf segment is contracting, and the feedlot and packer segments now have a lot of excess capacity that can’t be filled,” he said. “There are quite a few small to medium feedlots in the Midwest and Plains up for sale and no takers.”
Favorable weather and a decent snowpack helped out, however. The irrigation supply was sufficient, and soil moisture provided a good grass base for most areas of the state Ellsworth said.
“It was tough for those in the fire areas of 2007 to find feed, but we were able to manage most of that,” he said. “Then the nice, open fall allowed some people to save on feed costs,” with cattle able to graze longer.”
The warm weather also required less feed in feedlots, with cattle needing less to gain, he said.
It wasn’t all fair weather on the regulatory front, however.
“Two-thousand eight was full of regulatory issues,” Ellsworth said.
Two major issues at the federal level kept ICA leaders and staff hopping. First was the decision by U.S. District Judge Donald Molloy, Montana, to put the delisted North American gray wolf back on the endangered species list.
U.S. Fish and Wildlife Service had delisted the wolf in March, and Idaho, Montana and Wyoming began planning wolf hunts. Conservation groups fought back by suing the Department of the Interior, and Molloy issued a preliminary injunction on the hunts in July. Likely to lose the case, Fish and Wildlife moved to repeal its delisting ruling. In October, the judge approved the motion, giving wolves endangered species protection.
Idaho suffered more than 350 livestock depredations from wolves with nearly 100 more probably kills, taking a bite out of producers’ bottom lines, Ellsworth said.
The matter now stands with Fish and Wildlife reviewing its data.
The second issue on the federal level was the Dec. 2007 ruling by U.S. District Judge B. Lynn Winmill in Boise to overturn Fish and Wildlife’s 2005 decision not to list the sage grouse as endangered. The judge ordered the agency to conduct another review to be completed this month.
A listing “could force a lot of regulatory or management restrictions,” on both public and private land, Ellsworth said.
Producers have been busy planning what steps they can take if the sage grouse is again listed as endangered. The industry has been working on a statewide candidate conservation agreement with assurances (CCAA) that producers could sign up for to receive credit for what they’re doing to improve sage grouse habitat.
In another legal dealing, Western Watersheds challenged the Bureau of Land Management’s categorical exclusion policy in which BLM can renew grazing permits if it decides the grazing has no effect on the allotment or resources. The challenge affects more than 300 allotments scattered throughout the West, Ellsworth said.
Cattlemen also worked with the Environmental Protection Agency, The Idaho Department of Environmental Quality and the Idaho State Department of Agriculture to revise the state’s beef cattle memorandum of understanding to prevent operators from being fined twice for the same illegal discharge. As it stands, the operator can be fined by both the state and EPA.
“It’s just not fair to be fined for the same thing by two different agencies,” Ellsworth said, adding the money should instead be used to resolve the problem.
The industry plans to have legislation to remedy the issue introduced in the 2009 Legislature.
On the production front, the cattle industry kept a close eye on possible tuberculosis contamination from California bulls brought into Idaho.
“Having to test for TB was a huge undertaking for the Department of Ag, but it was a huge issue we had to keep an eye on,” Ellsworth said.
The state also maintained its brucellosis-clean status after regaining it about a year ago following herd contamination near Yellowstone National Park.
“We’ve been able to maintain TB- and brucellosis-free status, which is huge,” Ellsworth said.
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