What is in this article?:
- Two years of Arkansas drought have had a negative impact on production of the state’s most intensively irrigated crop: rice.
- Drought has impacted the forest industry in Arkansas through loss of harvesting jobs and timber value, increased reforestation costs and increased wildfire control cost.
- Drought has had an impact on Arkansas cattle numbers. Pastures have suffered and the result has been a liquidation of cattle from these areas where pasture forage has disappeared.
Drought impacts on cattle and hay
The cattle industry in Arkansas is composed primarily of small cow-calf operations with over 75% of all beef cow farms having less than 50 head of cattle (USDA, NASS, 2009). The drought of the past two years has had an impact on Arkansas cattle numbers. Pastures have suffered, particularly in the southwest portion of the state where the two years of drought have been most critical. The result has been a liquidation of cattle from these areas where pasture forage has disappeared.
January 1 Arkansas cattle and calves inventory data are reported from 1982 through 2012 in Figure 5 (USDA, NASS, 2012c). Cattle inventories increased after 1993, peaking at 1.93 million head in 1995. Since 1993, Arkansas cattle inventories have remained within a range of 1.8 to 1.93 million head with the exception of four years: 2006, 2007, 2011, and 2012. In all four years, cattle inventories adjusted downward due to drought conditions (T. Troxel, personal communication, August 3, 2012).
The low inventories of 1.71 and 1.75 million head observed in 2006 and 2007, respectively, reflect liquidation of cattle resulting from drought conditions occurring from May 2005 (NOAA, 2005) and extending until December of 2006 (NOAA, 2006). The low January 1 cattle inventories for 2011 and 2012 of 1.72 and 1.67 million head, respectively, also represent cattle liquidation resulting from drought conditions occurring in both 2010 and 2011, primarily in the south and southwest parts of Arkansas. The January 1, 2013 inventory will likely be lower than the 2012 number because Arkansas is currently in its third year of drought at the time of writing.
Replacement heifer inventories are also good numbers for gauging the impact of drought years on cattle numbers. Replacement heifers are either retained or purchased by cattle producers to maintain or increase the size of their cow herds for calf production. Thus upward or downward movement of this number gives some indication about herd rebuilding intentions of cattle producers. January 1 replacement heifer numbers for 1982 through 2012 are reported in Figure 6 (USDA, NASS, 2012c). Replacement heifer inventories track cattle inventories in most years. For example, replacement heifer inventories trended downward during the 1982 to1992 period, reflecting downsizing of cattle herds during this period.
Replacement heifer inventories dropped from 179 thousand head in 2010 to 136 thousand head in 2011 and continued to fall to 115 thousand head in 2012. The cumulative drop in replacement heifer inventories from 2010 to 2012 represents the largest two year drop in inventories since 1982, and the 2012 inventory number of 115 thousand head is the lowest on record since 1961 (101 thousand head). Some of this drop in replacement heifer numbers can be attributed to profit taking resulting from cattle producers taking advantage of high cattle prices, but most of the drop is a direct result of drought conditions occurring in both years (S. Cheney, personal communication, August 6, 2012).
Arkansas hay area, production, and value numbers are presented for 2002 through 2011 in Table 1 (USDA, NASS, 2012b). Total hay production for Arkansas averaged 2.886 million tons over the 10-year period. Total hay production was below the 10-year average in 2005, 2006, 2010, and 2011, all years experiencing drought conditions, as mentioned above. Hay production was lower in the drought years of 2005 and 2006 than in the recent drought years of 2010 and 2011. This is likely due to the fact that drought conditions were more uniform across the state in the 2005 and 2006, whereas drought conditions were generally confined to the south and southwest portions of the state in 2010 and 2011 (NOAA, 2010; NOAA 2011).
Season average prices in real 2011 dollars are also reported in Table 1. One would expect hay prices to be higher for drought years than for nondrought years. On first glance however, it appears that hay prices can sometimes be low for drought years and sometimes be high for nondrought years.
For example, the hay prices reported for the drought years of 2005 and 2010 are $83.64 and $87.60 per ton, respectively, both at or slightly below the 10-year average price of $89.14 per ton. The hay price reported for 2007 (a nondrought year) is $106.56 per ton, followed by 2006 ($104.34 per ton) and 2011 ($99.50 per ton). This discrepancy in prices is due to the way season average hay prices are calculated by the National Agricultural Statistics Service (NASS) for Arkansas. NASS calculates season average Arkansas hay prices from May of the previous year to April of the current year. Therefore, a more accurate hay price for the current year would be the hay price reported the following year. Thus the 2006 hay price of $104.34 per ton more closely represents the actual hay price observed in 2005, the 2007 hay price of $106.56 per ton more closely represents the actual price observed in 2006, and the 2011 hay price of $99.50 per ton more closely represents the actual price observed in 2010 by cattle producers. The hay price that will eventually be recorded for 2012 is expected to be higher than that observed for 2011. Many cattle producers with depleted pastures began feeding hay in July or August of 2011 and ran quickly through their hay reserves. Most cattle producers trying to hold cattle through the summer months were compelled to purchase hay of varying types and quality from distant locations (other parts of Arkansas or from as far away as Mississippi and Missouri).