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2021 drought had ranchers slashing herds, putting cattle on the move

With pastures decimated by lack of rain, northern U.S. cattle producers were forced to market animals early or get creative to stay in the beef business.

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Jordan Branstad loads cattle into a truck in Motley, Minnesota, on Oct. 22, 2021. Tri-County Livestock Auction in Motley was among sale barn that was flooded with cattle during the summer as the drought dried up pastures and created a feed shortage. Jeff Beach / Agweek
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When Rachael Merrill saw what the 2021 drought was doing to the pastures in her area of northern Minnesota, she did what she could to help her customers at Blackduck Co-op AG Services.

She ordered in a product called Rangeland Cake, a protein supplement to help provide cattle a little extra nutrition to "stretch that pasture out," she said.

"We sold it at cost to help these guys out," Merrill said. "Some of them, it was too late."

The drought forced cattle producers to sell off huge numbers of cattle in July and August, with herds sometimes being cut in half.

A look at other top stories of 2021: Looking back at 2021: Drought, markets and more
One of Merrill's customers, John Ostendorf, had 35 breeding cows at the start of the year, producing 34 calves. Typically, he says he would have enough pasture at his Big Fork, Minnesota, operation to get through to the fall to sell his calves.

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But this year "once the pasture was eaten down, it never came back," he said.

He sold 10 cow-calf pairs in July and hoped for rain. In August, he sold another 10 pairs and a bull.

Then he picked out his eight favorites cows and sold some more, finally selling off the last of his calves in late October.

A neighbor with about 60 cows in a normal year would put up about 800 bales of alfalfa hay. This year, he got about 150 bales and decided to sell his whole herd.

"Everybody cut at least 50%" Ostendorf said of his area. "A lot of people just quit."

Many of those that quit were often older, with no family to take over a small operation.

"I don't see that these cattle are ever coming back to this area," Ostendorf said.

Minnesota Ag Commissioner Thom Petersen visited sales barn in Bagley and Motley during the summer and said they were so backed up, cattle had to spend the night on the truck.

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Mitch Barthell, owner of Tri-County Livestock Auction in Motley in north-central Minnesota, said it was the busiest July and August in many years. In October, his biggest month of the year, business was still at a normal pace, despite the early influx of cattle and calves.

He pulls in cattle from across northern Minnesota and into North Dakota.

"Some of the guys have feed but can sell the feed at a high price, so they sold the feed and the cattle," he said back in October.

He said this year he had buyers from Missouri, Kansas and Oklahoma. "Normally, we wouldn't see that," Barthell said.

But those states had more normal rainfall during 2021 than areas north and west. And with such an influx of cattle, trucking to the southern Plains became feasible.

"We had the volume and had the quality . . . to make the loads work to get 'em that far," Barthell said.

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Jordan Branstad, shown picking up cattle in Motley, Minnesota, on Oct. 22, 2021, said he started buying cattle earlier in 2021 as the drought forced some producers in northern Minnesota to market cattle early. Meanwhile, ethanol plants in his area of Iowa provided plenty of feed. Jeff Beach / Agweek

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Jordan Branstad of Forest City, Iowa, routinely travels to Motley for the good quality calves he can buy there and feed back in Iowa. He was buying light calves six weeks earlier than normal.

"It was crazy up here this summer," said Branstad, who finishes cattle in an area with several ethanol plants and says he has access to "unlimited feed" with their byproducts.

"Some of those older guys will never fill their pastures again," said Branstad. "The cattle numbers will reflect that."

North Dakota State University livestock economist Tim Petry said the next U.S. Department of Agriculture cattle inventory on Jan. 1, 2022, which should be available in late January, will be telling.

Petry said that 36% of the U.S. beef herd was in areas of drought.

This is the third year in a row of herd reductions in the U.S. He said cattle slaughter is running about 9% ahead of last year.

While ranchers cut back because of a lack of feed, he expects cattle numbers in the northern Plains to recover eventually.

"We're expecting cattle prices to ratchet up over the next several years," Petry said. "That's going to stimulate going back to 100% capacity as soon as they can."

With cutting herds by as much as half also have exposed themselves to a capital gains tax liability, Petry says. But that tax liability can currently be deferred for two years and the IRS may be extend that further, he says, giving operations time to buy back cows and mitigate that tax liability.

Alternatives

The corn crop that was diminished by the drought provided some silage for feed, said Julie Ellingson, president of the North Dakota Stockmen's Association. "People are being creative for feedstuffs," she said, looking at options like cattails.

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North Dakota Stockmen’s Association Executive Vice President Julie Ellingson Contributed photo


She testified before Congress about the need for better management on federal rangeland.

The North Dakota Stockmen's Association does the brand inspections at the state's sale barns and some just across state lines (though not in Minnesota). Cattle make up the bulk of those inspections. Sale barns showing the biggest increases from January to September 2020 to the same period in 2021 were Rugby, North Dakota, and Sidney, Montana. Both of them were up more than 65%

Overall, cow inspections were up nearly 40%.

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Source: North Dakota Stockmen's Association


The fact that cattle prices held up despite the selloff was surprising, Ostendorf said.

But producers had to sell calves at a much lighter weight than what they wanted instead of letting them fatten up on essentially free feed in the pasture.

"I gave away half the income from the those calves by selling early," he said.

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Rachel Gray. Submitted photo.

In November, Rachel Gray, who chairs the Cow-Calf Council for the Minnesota State Cattlemen's Association, was back in the market to buy cattle in the fall, but she wasn't moving them back to her Little Timber Farm near Blackduck.

"We’ve made the decision that we could not feed cattle economically here this winter," Gray said. "Everything that we are purchasing is staying in Jamestown (North Dakota) until spring."

She was among the producers who moved some of the cattle that they didn't sell farther south to winter where there was more feed available. Some cattle where moved south to graze on field stubble.

She was encouraged by fall rains that helped replenish ponds on her farm and by some heavy snows in early winter.

"We're not recovered all the way yet," Gray said. " We still have a ways to go before we are out of the drought."

Mother Nature has provided some late-year relief as did some federal action .

In Minnesota, there are plans for a drought relief package that will target livestock producers but a special session to pass it did not happen. Ostendorf is afraid that help is too late.

A drought is not like a hail storm or a tornado that triggers an immediate response. "By not reacting quickly . . . the cows are gone," he said.

Merrill at the Blackduck co-op looks at inventory of bale wrap and twine for bales that she would normally be sold out of at the end of the growing season. But "with no hay crop to speak of," she still had plenty on hand going into 2022.

Unlike a calf crop, the twine can keep until next year.

Another effect of the selloff: "It set a lot of people back that had been working so hard on their genetics," she said.

"The whole thing is just heartbreaking," Merrill said.

Pictoral Graph BI numbers 9-21.jpg
Source: North Dakota Stockmen's Association

Pictoral Graph BI numbers 9-21.jpg
Source: North Dakota Stockmen's Association

Reach Jeff Beach at jbeach@agweek.com or call 701-451-5651 (work) or 859-420-1177.
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