Cash cows

In 2011, the worst drought in the history of the state of Texas wreaked havoc on the area. Temperatures easily surpassed 100 degrees and rain was as scarce as green grass. The drought was actually so vast, it spread to Oklahoma and New Mexico and did a number on the cattle numbers in the area.

On Jan. 1, 90.8 million cattle were reported in the United States. While that figure sounds like a lot, it’s actually a 2 percent decrease from a year ago and the nation’s smallest count in 50 years.

The drought, as well as a 25 percent increase in overseas demand, has already had its ramifications and not just in the Lone Star or Sooner states, the country’s two-largest cattle producing places.

According to Jack Stivers, Montana State University, Lake County extension agent, states like Oklahoma and Texas get their cattle from many places, while Montana’s cows don’t usually go too far from the state.

However, the drought could change that.

“If there is a shortage, the demand is going to be high and that will help us,” Stivers said.

Beef prices have begun to rise, increasing 6.4 percent from last year. While that’s not really good news for consumers, for ranchers like Polson’s Dan and Beatrice Jensen, it could be a great thing.

Because of the limited supply of cows, demand will be high in the coming months. The Jensens, under different circumstances, would be in the market to buy now.

“If I was in the position to do it, I would definitely be looking to buy myself more cows because the prices are going to go up,” Beatrice Jensen said. “A lot of those drought areas, they’ve had to sell off because they’ve utilized a lot of their resources.”

The Jensens, however, own about 20 cattle on their Valley View ranch now and sell only a few per year because their priority is building a herd suitable for their acreage. Their primary breed is miniature Herefords for several reasons.

“They’re a very productive beef breed,” Jensen said. “They eat half as much, grow well and you can get more meat from them, percentage-wise, than a standard cow.”

The demand for miniature Herefords is rising because of those reasons, as well as the fact that they are highly adaptable and require less space and feed, while maturing faster than ordinary cows. In fact Herefords are so adaptable, they’ve done well even in the drought-stricken south.

Because they’re in the process of building their herd, the Jensens typically only sell a few cattle per year, despite having a lot of interest.

“We sell a few heifers, but we like to retain some of them so we can build our herd,” Jensen said. “Our goal is to build our herd so we can sell steers for meat and heifers to get others started with the miniature Herefords.”

According to Jensen, prices on calves are really good now and cow prices are expected to get there in the near future. Currently, commercial line weaned calves can sell for roughly $750, while bred heifers can bring in $1,000 and bred cows can go for as much as about $1,500. The Jensens are keeping an eye on the market in order to maximize their profit down the road.

“We check the prices and as they go up, if we have something available, it will affect what we do,” Jensen said.

Because prices are expected to continue to rise, Jensen says the sooner, the better for those looking to obtain cattle.

“If you’re going to invest in a herd, now is the time,” Jensen said.

“The beef industry is so globally influenced,” Stivers added. “Montana has primarily weaned calves, steers and heifers. If there’s a lack, it helps with the base we have.”

The absence of rain has precipitated tough times down south and will inevitably cost consumers a few extra bucks, but according to the Jensens, the drought could be a cash cow for area ranchers in the coming months.