Cattlemen wrestling with finances and drought
Denver — Despite the hearty barbecue and the roping and brand-identification competitions, the mood at the meeting of the Colorado Cattlemen's Association was decidedly not gala.
"I would like to be able to make a happy speech. I'm sure you don't come to conventions to get depressed," Bill Swan, vice-president of the National Cattlemen's Association, told the small group which gathered in Greeley, Colo., last month.
But Mr. Swan's remarks and the somber conversations among the cattlemen who attended reflected the hard times that have been dogging the industry since 1974 .
Cattlemen are no strangers to periods of adversity. Their business is noted for its alternating periods of boom and bust. But the current financial situation has even the hardiest cattlemen concerned.
"Because of the perception of an upswing early in 1979, cattle producers made a number of decisions: keeping heifers to build up their herds, borrowing money to build new fences, purchase haying equipment and sprinkler systems, and so forth," explains Jim Riley, an economist with the Cattlemen's Association, adding, "So when the expected did not occur they were worse off than before."
It now costs between $350 and $450 to raise a 400-pound calf, while the market value of such a calf is only $320, explains Topper Thorpe of Cattlefax, a cattle marketing organization.
"Producers have been subsidizing the price of beef for five years now," he says
Because of these financial problems and the recent severe drought in the West , cattle herds decreased from 1974 to 1979 at the steepest rate in US history, from 132 million to 111 million head.
"It is extremely rare when everything works against you, but that is what is happening to the cattleman," Mr. Riley explains.
These adverse factors include:
* Economic conditions. Ranchers' equity is reduced so their borrowing power is lower.
* Large quantities of pork and poultry, which have kept prices extremely low and damped demand for beef.
* Strong international demand for feed grains, which has kept prices high.
Despite their problems, the cattle producers are adamant in their opposition to government subsidies.
While accustomed to dealing with the vagaries of nature and the marketplace, cattlemen resent the uncertainties of government
"A cattleman has to plan four or five years ahead," Mr. Thorpe complains. "If he decides to build his herd, then he is committed to a course of action: The calves will come whether he still owns them or not. But a year after he commits himself a politician can come along and make a decision which totally changes the situation."