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Published April 22, 2013, 02:14 PM

Minn. producers’ profit taking a hit

Drought and high feed prices are cutting into the profit margin for cattle producers like Gary and Kathy Stai of New London, Minn.

By: David Little , Forum News Service

NEW LONDON, Minn. — Drought and high feed prices are cutting into the profit margin for cattle producers like Gary and Kathy Stai of New London, Minn.

The price of corn for feed was around $2 a bushel when the couple started their small black Angus herd as a 4-H project for their daughters in 1994. Now corn is more than $6 a bushel. Gary Stai says he used to buy oats for $1 to $1.20 a bushel. Now oats are $3.60 a bushel.

Stai used to buy big round bales of hay for about $15 each; now those big bales bring $70 each, and much of that hay is being trucked to the southern United States where drought has dried up pastures and producers are willing to pay big prices.

While feed costs have increased, Stai says meat prices haven’t followed the grain or hay prices.

“We should be getting three times as much for our cattle prices than we are but they’ve only gone up about 50 cents to sell,” he says.

The Stais raise two dozen Angus heifers, a couple of bulls, about 12 steers a year for slaughter and about nine heifers at their farm near the south shore of Lake Andrew and at a farm seven miles southwest of Lake Andrew.

Gary Stai says there are not many small cattle producers in business anymore.

“I remember when I was in my 20s, pretty much everybody that had a small farm had cattle on it. Nowadays there are not that many left. People don’t want to be tied down. Even with cattle or milk cows, it’s a seven-day-a-week job,” Stai says.

“With grain farming, the farmers can take off for the whole winter and head south,” he says. Livestock have to be tended to every day, making sure their water isn’t frozen in the winter and that they have plenty of hay and feed.

Stai had rented up to four pastures just to rotate the cattle so they wouldn’t overgraze the pastures.

But with the drought, he says, “pretty soon you have to take the cattle out because there’s nothing left in the pasture and a lot of times, there’s no place to go. So you have to start feeding hay,” Stai says.

“We started feeding hay the last couple of years a lot earlier than what I wanted to because we had to get them off the pastures and was feeding grain, too, while they were in the pastures,” he says.

Stai says he used to buy quite a few tons dried distillers grains (a byproduct of corn-based ethanol production) but hasn’t bought any this year.

“We just end up grinding oats. I like to feed oats and corn, but with the high prices, we just backed off from buying the dried corn distillers,” he says.

Stai says he tried wet corn distillers grains once, but it has to be fed almost right away because it molds in hot weather and freezes solid in the winter.

“The dry worked the best for us. I can see why a lot of farmers and ranchers are getting away from cattle because it’s a lot of work and our price should be better for the cattle,” he says.

Stai says dry weather conditions during the last couple of years have reduced hay production. In some places, he used to get at least two cuttings of hay and now gets only one. He used to cut road ditches and he’d rent hay fields and do it on shares.

“Some of these places I’d get 20 bales and the last couple of years there’s probably times I’d only got four bales. It’s getting kind of tough for hay and with the drought down south, a lot of the hay from this area is going to Kansas, Oklahoma, Texas and you’ll see semi-load after semi-load heading south on 71, just leaving Minnesota, because they are willing to pay and it’s been so dry down there,” Stai says.

Two years ago, he says, Texas cattle producers shipped out a million head of cattle because farmers couldn’t feed them.

“No pasture, no nothing for them to graze,” Stai says. “We’re kind of lucky here. Even though we get a drought, we can always get a pretty good crop because our soil retains moisture and other areas don’t,” he says.

Through the years, the Stais have built up a good base of customers.

“We’re lucky,” he says. “We sell steers right off the farm. They go to a certified butcher plant and we sell to customers. We’ve kind of eliminated the middle man, so that helps.”

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