(Bloomberg) -- Ranchers in top cattle state Texas can’t sell their herds fast enough with 100-degree Fahrenheit temperatures making it too expensive to sustain animals.
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Costs for feed, fertilizer and fuel have been soaring. There’s also a lack of water in the state, and little hay. That’s resulting in a firehouse of cattle getting auctioned at Texas sale barns. Emory Livestock Auction Inc., just over an hour’s drive east from Dallas, is seeing nearly quadruple normal rates with ranchers in “panic mode,” said Jack Robinson, an 83-year-old auctioneer.
“It’s dry and there’s no hay around,” said Scott Frazier, a crop and livestock farmer in coastal Nueces County who recently sold about 100 cows. “It’s hard to justify keeping them.”
From sale barns, cattle often go into feedyards, where they’re fattened for the market. This means larger beef supplies coming in the near term, but fewer calf-bearing cows in the years ahead -- in other words, shrinking herds and higher prices for beef, which have already been soaring.
There’s little hope of significant relief from the arid weather. Hay was withering after a dry June and some farmers were already dipping into supplies usually saved for the winter. Coupled with the highest corn prices in a decade and forecasts for scant rain in the coming months, profitability looks grim in the cattle business.
Roads around the auction in Emory were choked earlier this week by farmers hauling cattle in trailers. Buyers from Oklahoma, Kansas, Louisiana and Mississippi were looking for animals that may perform better in drought conditions.
“I’ve been in the business 60 years and I’ve never seen lines that long,” Robinson said by phone.
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