Study: Drought, other factors weigh on livestock
Drought and other factors took a toll on the livestock industry last year, according to a new study by the South Dakota Center for Farm/Ranch Business Management.
The SDSU Extension-funded center, which helps South Dakota farmers and ranchers become better business managers, said that high feed prices had a dramatic effect on livestock profitability in 2012.
Will Walter, an institute instructor, told the Daily Republic that the average dairy herd in the program showed losses of $398 per cow in 2012 following gains of $707 per cow in 2011.
The annual report is based on data submitted by 100 participants in the management program last year.
Cow-calf enterprises reported an average loss of $27.05 per cow in 2012, compared to a profit of $88.34 per cow in 2011.
Walter said beef backgrounding operations were profitable in 2012, but profits slid from marks set in 2011. Backgrounding operations feed cattle during the two- to three-month post-weaning period before cattle are transferred to a finishing feedlot operation.
Walter said he thinks that weight gains were higher in 2012 because producers fed cattle on more readily available and less expensive silage for a longer period of time.
"Some producers kept cattle longer in 2012 due to income tax problems or market timing issues," said farm management instructor Roger DeRouchey.
Net returns at beef finishing feedlots dropped significantly.
"There was a big difference between cattle operations with high and low profits," Walter said.
He noted that farms with higher profits did a better job of controlling costs and using alternative feed.