PRSRT STD US POSTAGE PAID BRYAN, TX 77802 PERMIT # 23 Moving on Passing the ranch to your heirs PAGE 10 PRSRT STD US POSTAGE PAID BRYAN, TX 77802 PERMIT # 23 ARRESTING THE RUSTLERS Stopping modern-day cattle thieves. PAGE 3 SETTING THE RIGHT TRAP e best way to capture feral hogs. PAGE 4 ‘MAKE-IT-OR-BREAK-IT’ Producers try to recover from 2011 drought. PAGE 6 ALTERNATIVE INCOME Ranchers seek new sources for profits. PAGE 9 January 2015 — Issue 2
Transcript
PRSRT STDUS POSTAGE
PAIDBRYAN, TX 77802PERMIT # 23
JAMES THOMPSONStraight from the horse's mouth.PAGE 3
JAMES THOMPSONStraight from the horse's mouth.PAGE 3
JAMES THOMPSONStraight from the horse's mouth.PAGE 3
JAMES THOMPSONStraight from the horse's mouth.PAGE 3
SETTINGTHE RIGHTTRAPThe best way to capture feral hogs.PAGE 4
‘MAKE-IT-OR-BREAK-IT’Producers try to recover from 2011 drought.PAGE 6
ALTERNATIVE INCOMERanchers seek new sources for profits.PAGE 9
January 2015— Issue 2
January 2015— Issue 2 The Land & Livestock Post2
NewsFrom theGeneralManager
Land seems to be the only thing hu-mans aren’t making more of — ex-cept in Hawaii. I heard land still is
beingmade there.Well, I don’t think I canafford a plane ticket to Hawaii, much lessany land there. In fact, andthismaybehardforsomeofyoudear readers to believe,me being a media moguland all: I don’t think I couldafford tobuyany landatall.Despite my economic
standing, however, I willsome day be a landowner.Granted, some people aregoing tohave todie inorderfor me to acquire this land, and not justany people. If it were someone truly evilwho had to die in order for me to get myland, I’d be all for it, the sooner the better.But, since it ismyparentswhowouldhaveto buy the farm in order for me to have afarm, I’m in no rush. Besides, as of now Ihaveall thebenefitsof beinga landowner,free reign of the place,without any of the
responsibility.But there are responsibilities that will
need to bepassedon, and if youhave landit issomethingyouwillhavetothinkaboutat some point. In our cover story we takea look at passing on the land, and somefactors you should consider.Wealsohavesome news from The Samuel RobertsNoble Foundation aswell as other storiesfrom around the industry.
Ihopeyouenjoy it, and thanks for read-ing.’Til next time,
• For more information about content oradvertising, contact Jesse Wright at [email protected].
JESSE WRIGHT
Moderncattle rustlersaredrivenbyprices,drugs
By JANELLE STECKLEINAssociated Press
OKLAHOMACITY—The duodidn’t fit the picture of the rough,horse-riding characters por-
trayed in old westerns.The 20-somethings drove up in a
shiny pickup. They wore baggy pantsand sweatshirts. Each tucked a singleleg of his pants into an expensive look-ing pair of cowboy boots that clearlyhadn’t seen a day of hard work. Despitethis being Oklahoma City proper, onecomplemented his look with a pair ofspurs, which jangled as hemoved.
The rough characters of old answeredto no one, but this pair had a healthyamount of respect for one person in par-ticular: Mom.
Apprised by state agriculture agentsPaul Cornett and Donnie Crain that herson and his friend were under investiga-tion for stealing cows, she demandedloudly to knowwhy her son hadn’t men-tioned it. His reply: He forgot.
Themen—whom agents later identi-fied as Conilius DemarWright, 23, andTyvenski Kewaun Long, 24—werecharged in Canadian County last monthwith stealing livestock.Wright facesthree counts of larceny, while Long ischarged with two counts. Both also facea conspiracy charge.The penalty for stealing livestock is
up to 10 years in prison.If Wright and Long struck an unusual
By Michael PorterThe Samuel Roberts Noble Foundation
Trapping probably is themost effectiveferal hog control technique available tomost landmanagers. Aerial gunning canbe fairly effective but should be imple-mented over large areas (a few thousandacres), requires a helicopter, and can berelatively dangerous considering thenecessary low altitudes and slow speed.Groundhuntingis funbutnotparticularlyeffective at reducing swine populations.No toxicantsare legalbutarebeing inves-tigated.Many different trap technologies are
available: cage or box traps (Figure 1);circular spring panel traps — probablythe least effective among the optionsdiscussed here — (see example at bit.ly/SpringTrapPhoto); corral traps (Figure2);drop nets; BoarBuster; and others.Trap size should be matched to feral
hog sounder size. A sounder is a herd of
feral hogs primarily comprised of oneor more adult sows and one or multiplegenerationsof offspring.Asounder is theprimarysocialunitamongferalhogs.Oneormorematureboarswillspendtimewitha sounderwhen trying tomatewitha sowbut then will move on searching for an-other sow.Thegoalwhenusinga trapshouldbe to
captureanentire sounderat one time.Fe-ral hogs are relatively intelligent and canlearn quickly, so a portion of a sounderremaining outside a tripped trap oftenlearns to avoid the trap. Cage or box trapscan be effective management tools whendealing with small sounders, e.g., fewerthan than six individuals or individualboars. Cage or box traps may capture
Photo courtesy of The Samuel Roberts Noble FoundationThe goal when using a trap should be to capture anentire sounder at one time.
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NewsPhoto courtesy of
The Samuel Roberts Noble FoundationThere are many different trap technologiesavailable.
many hogs over time when hogsare abundant, but usually do notcapture enough whole soundersto prevent population expansionand trainmany feralhogs toavoidtraps. When dealing with sound-ers of more than about six indi-viduals, largertrapssuchascorraltraps,dropnetsor theBoarBusterare more appropriate.
In past years, corral traps anddropnets representedsomeof thebest known tools for capturing fe-ral hogs.
Ongoing research at the NobleFoundation,however, ledtothede-velopmentof theBoarBuster trap.BoarBuster (available commer-cially in 2015) marries the tech-nology of remote monitoring andtriggeringwith thebestaspectsofprevioustrapdesigns.BoarBustercaptures whole sounders with asingle trapping. Intesting, thetrapcaptured as many as 39 feral hogsin a single drop.
Appropriate baiting and train-
ing protocols should be practicedto increase the likelihood of trap-ping a whole sounder. Use of in-frared-triggered cameras is veryhelpful to learn sounder size andpattern feral hog activity.
It is important to remove feralhogs from a trap as quickly aspractical. Other sounders or indi-vidual feral hogs might travel bya trap containing hogs and learnto avoid it.
Also, it is unethical to leavetrappedanimalsinatrapverylongbecause theymight escape, injurethemselvesorothers,orsufferdueto weather exposure or anxiety.When a trap cannot be checked atleast once a day, it should be shut,tied open or removed so it cannotcapture animals, especially non-target animals.
For more information, go tonoble.org/feral-hogs/.
Hogs, from Page 4
The Land & Livestock Post January 2015— Issue 2 5
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News2015couldbea ‘make-itorbreak-it’ year forproducers
By RoBeRt BuRnsTexas A&MAgriLife Extension Service
Depending upon the weather andconsumer tolerance for highprices, 2015 could be amake-it or
break-it year for beef producers, accord-ing to a Texas A&MAgriLife ExtensionService expert.Of course, it’s all about supply and
demand, said Stan Bevers, AgriLife Ex-tension economist in Vernon. In Texasand the rest of the U.S., cow inventorynumbers are down, largely due to recentdroughts. This means calf supplies aredown as well.And asmany parts of Texas have
come or seem to have begun to come outof the drought, livestock producers areavid about rebuilding herds or at leasthaving stocker calves to take advantageof available winter wheat grazing, Bev-ers said. All in all, this means producers
are seeing some extraordinary prices atthe sale barn.“Calf prices have been prettymuch
record prices throughout the year,”he said. “Every timewe thinkwe’vereached a new plateau, we just wait aweek or twoweeks and they go higher.It’s not uncommon right now to see450-pound calves bringing around $3.60a pound, which puts them somewhere inthe neighborhood of $1,600 a calf, whichis extraordinary andmore thanwethought we’d ever see.”In the Rolling Plains area, where Bev-
ers is stationed, as well asmany otherparts of Texas, the rains came at justthe right time to really stimulate theplanting and growth of winter wheatpastures. The good forage availability islikely to contribute to driving calf priceseven higher throughoutmuch of 2015,
Texas A&MAgriLife Extension Service photo by Robert BurnsCost of replacement heifers and cow/calf pairs continued to break all historical records during the fall asproducers sought to rebuild herds, according to a TexasA&MAgriLife Extension Service economist. Replace-ment cow prices are expected to level out during the winter, but then climb higher with spring green-up.See PRODUCERS, Page 16
January 2015— Issue 2 The Land & Livestock Post6
Newsimage of those accused of rus-tling livestock when confrontedby state agents on a weekdayafternoon last month, officialsin the Department of Agricul-ture, Food and Forestry say it’sbecause the crime, itself, haschanged.
In some parts of the country,thieves looking for a quick bucktarget televisions and jewelry.In Oklahoma, enterprisingcriminals with a little bit ofknowledge of livestock — whoare lured by payouts of thou-sands of dollars — target cows.
By the start of November,nearly 1,200 cattle were report-ed stolen from pastures acrossOklahoma, said Jerry Flowers,chief of the 10-agent unit taskedwith investigating agriculturalcrime in Oklahoma. By theyear’s end, he said, it could beas many as 1,500.
Between theft of equipmentincluding tractors and trailers,and cattle rustling, the Okla-homa’s agricultural industryhas lost more than $4 million
this year, he told the McAlesterNews-Capital (bit.ly/1xat7lJ).
Wright and Long told thestate agents they took the cattleto buy marijuana and pay bills,Flowers said. The two had notyet entered a plea by Jan. 2.
Methamphetamine is the big-gest inspiration for cattle theft,Flowers added, though heroinis an increasing contributor, aswell. He estimated that 80 per-cent of the cases that his agentsprocess are drug related.
“It’s really becoming a realbig problem,” he said. “We getinvolved in the narcotics endof this thing pretty much rou-tinely.”
Flowers’ unit recovers about40 percent of the cattle reportedstolen each year. It files about
Rustlers, from Page 3
See THEFT, Page 8
Illustration courtesy of www.american-cowboychronicles.com
Cattle rustlers were dealt withswiftly and harshly in the Old West.Rustling continues to be a problemtoday, although methods of punish-ment have changed.
The Land & Livestock Post January 2015— Issue 2 7
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200 felony charges a year, manybuilt on paper trails that espe-cially are painstaking in caseswhen cattle aren’t recovered.The thing that makes gently
lowing cattle such a temptingtarget is price. A 450-poundheifer calf can sell for $1,575.Targets also are becoming
more convenient. The industryis attracting a new kind of pro-ducer: city and suburban dwell-ers who invest in a small swathof land in the country, then buyand raise a few head of cattlefor supplemental income to payfor things such as vacations.Gone are the days when huge
herds roamed the prairies.These days the typical herd sizeis around 40, said state Sen.Eddie Fields, R-Wynona, chair-man of the Oklahoma SenateAgriculture and Rural Develop-ment Committee.But the new livestock farm-
ers rarely brand their cattle,Fields said. That canmaketracking ownership tricky andfrustrate investigators’ effortsto differentiate onemissingblack cow from another.Even branding isn’t a guaran-
teed protection. Fields alwaysbrands his cattle but still fellvictim himself at his OsageCounty ranch about a decadeago. Someonemade offwith10 head. He said the cattle justwentmissing one day, and therewere few leads. The thievesnever were caught.Todaymore than 45,000 Okla-
homans raise beef, and cattleoutnumber people in the statenearly 2-to-1.Cattle are the state’s No. 1
agricultural commodities, saidMichael Kelsey, executive vicepresident of the Oklahoma Cat-tlemen’s Association. And steal-ing them is easier thanmostpeoplemight think, he said,though it still takes know-how.“A lot of those thieves, yes,
they’re connected tomethabuse, but they also have con-nection to cattle,” he said.“There is some practical expe-rience that is beneficial to thethieves.”Flowers saidWright and
Longworked at a sale barn forabout twoweeks before usingtheir new skills to take cows.Cattle thieves—Flowers
calls them “outlaws”— gener-ally gamble that days will passbefore a rancher notices a fewmissing cows from a large ruralpasture. That allows rustlersenough of a head start to off-load themerchandise at salebarns across the state or inanother states, then pocket andspend the proceeds.“It’s frustrating,” he said.
“It’s expensive. It can even belife threatening. You pull inon somebody doing somethinglike that, you don’t knowwhatthey’re going to do.”Operators of sale barns are
stepping up to deter thievesfrom taking advantage of themto dispose of stolen livestock.In addition to video-
taping the arrival and unload-
ing of trailers, barns keep anextensive paper trail of theseller and buyers, said TerryChapmanwith the OklahomaLivestockMarketing Associa-tion. Those records are turnedover upon request to Flower’sunit.Auction operators work
closely with law enforcementto deter thefts. They also reportsuspicious activity, which wasactually what led to the recov-ery of J.D. Thomason’s cows.Chapman said the biggest
challenge for everyone is identi-fying the people who are sellingstolen cattle - quickly.A single day canmean the
difference between recoveryand a cow being sent to aslaughterhouse.That’s nearly what happened
to Thomason, who operatesa ranch in the southwesterncorner of Payne County, about45miles outside Oklahoma
City. He didn’t know three ofhis pregnant cowswere goneuntil Flowers’ investigators—through dogged, old fashioneddoor-knocking— tracked themto his pasture.Thomason said hemade the
mistake of leaving several pan-els in a field. The rustlers, whodrovemiles out of their waylooking for prey, capitalized byusing the panels to build a pen.They pulled up a trailer andlured his cows away— likelywith a bag of feed, he said.Thomason said he’s out in
his fields often, but as cattletend to roam, it can be diffi-
cult to get an accurate count.The rustlers took the cows
to a sale barn—which coor-dinates cattle auctions acrossthe state. The thieves werecaught red-handed, and thecows reunited with a thankfulThomason, Flowers said. Courtrecords show Long andWrighthave been charged with steal-ing the cattle.It was the second time in the
past six years that Thomasonhad fallen prey to thieves. Thefirst time, he said, he lost ninehead of cattle from the samepasture. Those were never re-covered.
Theft, from Page 7
January 2015— Issue 2 The Land & Livestock Post8
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GAIL—TheMuleshoeRanch’sprofits were chopped in halfwhen the drought withered pas-tures, dried up stock tanks andforced the owner to move mostof his cattle out of state.Three years later, the sprawl-
ing33,000-acreWestTexasranchagain is populated with cattle,thanks to improved rainfall.But JohnR. Anderson no longeris taking chances with his bot-tom line. The fourth-generationrancher is exploring alternativeincomes to ensure his businesscan survive another hit fromMother Nature, including leas-ingpartof his landforquail,deerand antelope hunting.“The drought opened our eyes
to we need to be more diverse,”saidAnderson,whoranchesnearGail,about70milessouthof Lub-bock. “Our mind isn’t closed. Ifthere’s something we can dowe’regoingtogo for it, if itmakeseconomic sense.”His counterparts in the na-
tion’s top beef-producing stateare doing everything they can tomake up for the smaller profitssince the drought, which beganinearly2011, forcedawidespreadculling of herds. Though limitedsupplieshaveprompteda recordrise inbeef prices,moreranchersare leasingpartof theirpropertyforhuntingorsellingwater tooilcompanies or desert plants andmistletoe to nurseries. Some areeven taking side jobs to makeendsmeet.The changes may be perma-
nent, and the ongoing drought is
amongthemainfactorsthathavealtered indelibly the state’s cen-turies-old cattle ranching tradi-tion, says Texas and Southwest-ern Cattle Raisers Associationvice president Richard Thorpe.Hunting leases are perhaps
the most popular way ranchershave diversified their incomes.Anderson will lease his landfor as much as $5 an acre; otherplaces charge thousands of dol-lars per gun.
AP Photo/Betsy BlaneyLike many ranchers who suffered throughthe state’s driest year ever in 2011,ownersof the Muleshoe Ranch in Borden Countyhave worked since to diversify their in-comes with other enterprises includingleasing water and hunting acres for deer,antelope and quail.
Where there’s a way, there’s a willTransferringyourranch to thenextgeneration
By RoBeRt FeaRsSpecial to The Post
You’ve put your heart and soul into buildinga ranch of which you are proud.What hap-pens to it when you’re gone?Successful ranchers are good stewards
of their land andwish for continued goodstewardship after their death. How can they be assuredthat this will happen? The desired answers to thesequestions can be delivered through proper estate plan-ning and executing the necessary paper work.Estate planning should involve the whole family.
Schedule familymeetings to discuss the ranch’s futureafter you are gone. Explain to familymembers whatyou own and how it is managed. Explore how familymembers feel about the ranch. Do any of the childrenenjoy andwant to continue the ranch lifestyle? Are thechildren passionate about the land and cattle? Chancesare that one or two prefer to stay on the ranchwhileothers want an urban lifestyle.On several occasions within the past threemonths,
it has been observed that the daughter wants to stay onthe ranch and the boys want to enter non-agricultural
professions and live in a city. So it may be adaughter who operates the ranch after
you are unable to do so.
When to give“It is very important to leave the ranch to the son
or daughter whowill be a good shepherd of the land,”said Kent Schuster, an attorney with offices in Hearneand Austin. In addition to being an attorney, Schus-ter has amaster’s degree in range science which wasdriven primarily by his love of the land. He relies onhis rangemanagement background frequently whendealing with legal issues concerning rural lands.“When planning the transfer of a ranch to the next
generation, it must be remembered that immobile as-sets or real property, such as land and buildings, aretransferred by deed,” Schuster said. “Mobile assetssuch as equipment, recreational vehicles and automo-biles are transferred by title.“Ranchers can give their land to heirs or friends
while they are alive with a deed. This is called an intervios gift. They can also bequeath their land to heirs orfriends through a last will and testament. This is calleda testamentary gift.”Schuster said, “There are several types of deeds,
including but not limited to quick claim deed (deedwithout warranty), special warranty deed and generalwarranty deed.“A quick claim deed transfers whatever ownership
interest a person has in a property. It makes no guar-antees or promises as to the percentage of a person’s
ownership interest.“A general warranty deed transfers ownership and
guarantees that the property has no other owner(s)than the grantor/seller, has not been sold to anyoneelse and that it is not under any undisclosed liens or re-strictions. The grantor will defend the title against anythird-party claim. The general warranty deed is thebest and strongest deed in Texas.”The special warranty deed has the same guarantees
as a general warranty deed, but the warranty of titleis limited only to anyone claiming to own an interestthrough the grantor or his heirs and assigns. The sellerguarantees that he or she will compensate the buyer ifthe title is not clear through his chain of title accordingto the Courthouse records. This is why title insuranceis usually required with a SpecialWarranty Deed.The common legal document used to transfer
property from a decedent to his or her heir is a will,which is effective only on the grantor’s death. Almostanything can be written into a landowner’s will withone restriction. Heirs have to be living and/or born 21years beyond the date of death. This means that youcan leave property to your children, grandchildren andpossibly, great grandchildren if they are bornwithin 21
See INHERIT, Page 11
Photo by Robert FearsIf the ranch generates a large amount of income fromminerals, then
an heir can use his or her share of royalties to buy the ranchfrom other siblings.
January 2015— Issue 2 The Land & Livestock Post10
Newsyears of your death.“There are several ways to
leave a ranch to just one of thechildren,” Schuster continues.“For example if Pete wants theranch and Bob has no interestin it, you can leave the ranchto Pete through awill and buya life insurance policy of equalvalue with Bob as the benefi-ciary.When you pass away, Petegets the ranch and Bob gets theinsurancemoney,” Schustersaid.A lot of ranchers are “land
rich” and “cash poor.” In thissituation, youmay not want toleave your ranch to three chil-dren when only one of them isinterested in it. This may forcea son or daughter to sell land inorder to buy the interests of theother two. If the ranch gener-ates a lot of income fromminer-als, then the one heir can usehis or her share of themineralincome to buy the ranch fromthe other two siblings.Land can be deeded to a son
or daughter with a life estatewhich allows the parents tocontinue to live on it as long asthey are alive. Depending uponhow the life estate is written,the father ormother can con-tinue to take part in the ranchoperation. Some life estates arewritten in amanner to allowthe parents to sell a portion ormortgage the entire ranch ifcash is required for continuedoperation, medical expenses orother necessary needs. The ad-
vantages of this transfermeth-od are that the son or daughterfeels connected to the land andtakes an active role in the ranchoperation. He or she is apt totake good care of the ranch af-ter your death because of theirprior involvement.“A ranch does not necessarily
have to be left to one child,” ex-plains Schuster. “It can be deed-ed to any number of childrenas an undivided interest whichmeans they will share equallyin the profit and loss. As an ex-ample, there are four childrenand one of them is interested inrunning the ranch. You can givea fourth interest to this personbefore your death. This actiongets him or her involved andhelps tomaintain their interestin the operation. Under this ar-rangement, the person gets one-fourth of the profits and losses.The other children receive theirinterests after your death.”Schuster suggests initiation
of a limited liability companyand deeding the ranch to thecompanywhen its asset valueis high enough to cause inheri-tance tax issues. Shares of thecompany then can be dividedequally among familymembers.Every year, the parents can givecompany shares to the childrenin amounts equal to or less thanthe annual gift tax exclusion.This can be done until all of thecompany shares belong to thechildren. This form of owner-ship also provides a good liabil-
Inherit, from Page 10
Photo by Robert FearsMobile assets such as equipment are transferred to the next generation by title.
SeeWILL, Page 12
The Land & Livestock Post January 2015— Issue 2 11
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ity shield, particularly if theranch has a hunting enterprise.“When land is transferred
to heirs through awill, there isa step-up in basis used for fed-eral tax assessment,” Schustersaid. “For example, if the ranchwas originally purchased for$40,000 and is worth $140,000 attime of death, your heirs willbe allowed to value the land atthe $140,000 rate at the time ofdeath for estate tax purposes.So if the ranch is sold soonthereafter, they can avoid largecapital gains. If they retain theland, theymay have less capitalgain exposure in the distantfuture.”If none of the children are in-
terested in the ranch, then youprobably know of a neighbor oranother rancher who is a goodshepherd of the land. This per-sonmay be interested in a longterm lease after your death. Thelease can be granted throughawill with the stipulation thatlease proceeds are dividedequally among the heirs.“Good land stewardship
should be a key factor in theselection of a lessee,” Schustersaid.
Mobile assets“Inmost wills concerning
farms or ranches, I add theclause, ‘ give all my land, cattleand improvements thereof to_________,’” Schuster said. “Im-provements include buildings,water wells, mobile homes and
equipment. This clause stipu-lates that the person inheritingthe land also inherits every-thing on it. Naturally if theland is leased and the lessee hascattle, horses and equipment onthe ranch, they are not includedin the will.”Transfer of mobile assets
occursmore smoothly if thereare written records that showinventories.Cattle numbers are assessed
easily if production recordshave been kept and the animalsare individually identified.Identificationmethods caninclude ear tattoos, ear tags,brands or, in cases of smallherds, detailed written descrip-tions.
Production records shouldinclude animal births, deaths,sales and purchases. Equip-ment inventory can be obtainedfrom depreciation tables usedfor income tax returns.It is a good idea to keep an
accurate, up-to-date inventoryof other items such as feeders,hand tools, veterinary sup-plies, feed and tack. Death of afamilymember is a traumaticexperience and attention oftenis diverted from activity on theranch. Employees, visitors orothersmay use the opportunityto clean out the tool chest, med-icine cabinet or the feed room.These actions could cost theestate thousands of dollars.“Themost important point
to remember is to avoid wait-ing until you are on your deathbed before deciding what you
want to do with your property,”Schuster said.. “I have beencalled to hospital rooms to hast-ily prepare wills withoutmuchconsideration on how assets
should be handled. The dyingperson leaves his ranch to chil-dren who have no interest in it.After the funeral, they hire aRealtor and the land is sold for
a subdivision.“We owemore than that to
our ranching heritage andcontinued conservation of ourland,” Schuster said.
Photo by Robert FearsA clause should be placed in a will that stipulates the person inheriting the land also inherits everything on it, including the cattle.
Market, from Page 13
January 2015— Issue 2 The Land & Livestock Post12
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News
Carrycapacity influences thevalueof leased landBy Dan ChilDs
The Samuel Roberts Noble Foundation
Profits from grain and livestock enter-prises generally impact the rental rateson lands that are used to grow these com-modities. During highly profitable times,rental rates for landusually trendhigher.Likewise, when profits are lower, rentalrateswill trend lower.Howquicklyrentalrates adjust depends to a certain degreeon how fast profitability changes for theunderlying commodity.Agoodexampleof rentalratesadjusting
to profitability can be observed for corn.General profitability of growing cornduring the period of 2008 to 2013 trendedstronger. Inthestateof Illinoiswherecornis commonly grown, the University of Il-linois reported1 rental rates moved froman average of $152.72 per acre in 2008 toan average of $196.13 in 2013. This is anincrease of about 28 percent.Current projections are for the profit-
ability of the cow-calf sector to set record
highs for 2014. These record profits arealso having an impact on rental rates forpasturelandwhere cows are grazed.Pastureland leased for grazing cows is
commonly negotiated by the acre. Someconsideration is given to the amount ofopen ground, type of base grass and con-dition of the stand. Another factor is theanimal unit year (AUY) — the carryingcapacity in terms of the number of cowsthat can be grazed on the property dur-ing the growing season or year-roundwithout jeopardizing the integrity of thegrassstand.Often,however,AUYcapacityis neither estimated nor considered.AnAUY ismore specifically defined as
the amount of grass needed to sustain a1,000-pound cow for 12 months and hercalf for seven of those months. It is gen-erally accepted that an animal unit willconsumeanaverageof 26poundsof grassper day. Estimating the number of AUYsprovides theamountof potential grass or“feed” the property is capable of produc-
ing. Knowing the carrying capacity of aproperty is helpful to the landowner byallowing them to know how much grassor feed they have for sale and, likewise,for the tenant to know what he or she isbuying. Not many livestock owners pur-chaseasackof feedwithoutknowingwhatit weighs or having an idea of the qualityof feed in the sack.Rental rates that are based on carry-
ing capacity provide information both tothe landowner and the tenant concern-ing the amount of feed being transacted.This knowledge should allow each partytomake amore informeddecision,whichcould lead to a more equitable and long-standingagreementbetween the twopar-ties.Avariable incarryingcapacity for land
with improved forages, e.g., bermudag-rass, love grass or old world bluestems,is fertilizer. Applying nitrogen fertilizerto these forages can increase carryingcapacity considerably. The cost and ap-
plication of the fertilizer is generally theresponsibility of the tenant. Therefore,carrying capacity is normally calculatedwithoutanyfertilizeradded.However,be-cause the potential is there for increasedforageproduction, landwithan improvedforagebasewillgenerallyrent forahigheramountthanlandwithanativegrassbase.Oncecarryingcapacity isdetermined,a
price can then be negotiated for the leasevalue of the property.An index used in some leases to stay
current on profitability is the price perhundredweight of a 500-pound steer calfthe first week of August. August is usedbecause it is often the average price fortheyear.Thepriceperhundredweightbe-comes the annual grass lease fee for theyear per animal unit. For example, if a500-poundsteercalf wasbringing$300perhundredweight, thentheannual leasepercow per year would be $300. This amountwould not include care for the animals,only grass.
January 2015— Issue 2 The Land & Livestock Post14
The Land & Livestock Post January 2015— Issue 2 15
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Bevers said.“Here in North Texas, we
have probably had as near asgood of wheat pasture as wehave in the last four years,” hesaid. “That’s putting pressureon producers to put stockercalves onwheat pasture in or-der to glean a fewmore dollarsfrom them.”Longer term, there is some
evidence total U.S. herd num-bers are being rebuilt, Beverssaid.There’s a lot of evidence, at
least in Texas, that producersalready are starting to rebuildherds as large parts of the statemove out of the drought, Beverssaid. But rebuilding continuesto be an expensive proposition.“We’re seeing producers re-
taining their heifers or buyingfemales of various sorts andages,” he said. “It is not uncom-mon for young cow/calf pairscurrently to bring well over$3,000,” he said. “Five to six orseven years ago, $1,200 to $1,500was unheard of.”Bevers said he expects the
high replacement prices tocontinue to be stable as colderweather sets in. Producersmayhold back during the winter asthey do not want to bringmorefemales in until they see whatthe weather and forage suppliesare going to be.
“But come spring, Marchand April, when things startto green up again, chances arewe’ll see another run up on
these females,” he said. “Atsome point, we’ll get stocked upagain and prices will go down,but I don’t see that happening atleast until the fall of next year.”What will ultimately govern
calf and replacement priceswill be the prices consumersare willing to pay, Bevers said.“That’s the black swan, the
unpredictable event: How highcan the prices consumers payat the supermarket go beforethey start cutting back,” hesaid. “Lately, demand has ac-tually gone up, despite highprices. But consumers are buy-ingmore hamburger and lesssteaks and roasts.”
One factor that makes itunpredictable is that it takesas long as a year and a half forcalf and replacement femalesthat are bought today to affectconsumer prices, Bevers said.Consequently, consumers won’tbe affected by current calf orcow/calf prices until well into2016.There will be no regional
reports for this issue of Texascrop, weather.By agreement with the U.S.
Department of Agriculture,AgriLife Extension countyagent reports are collected bythe agency’s National Agri-culture Statistical Service inAustin and then routed to theappropriate regional offices.This year, as it did last year, thestatistical service suspendedcollecting the county reportsfor December. The districtreports will resumewhen the
service begins collecting themagain, usually the first or sec-ondweek of 2015.
Coastal BendIn the Coastal Bend area,
optimism also is high, andproducers are rebuilding herdstoo, said Levi Russell, AgriLifeExtension economist in CorpusChristi.But the different climate and
breeds of cattle affect producerdecisions about rebuilding, hesaid. First, 500-pound steers arerunning about $2.80 a pound,and choice cow/calf pairs arerunning about $2,300, consid-erably cheaper than in otherparts of the state.Prices are lower for a num-
ber of reasons, according toRussell. One, calves have to beshipped considerably farthernorth to the feedlot areas. Andbecause of the warmer climate,
there’s more Brahman influ-ence, which alsomeans theydon’t grade as well and toleratethe winter cold up north as wellas the crosses used in Centraland North Texas.“If the calves are worth
less, then the breeding stock isworth less, because any capitalasset is based on the cash flowyou get from it,” Russell said.Another reason south Texas
calves are cheaper is that stock-er cattle are not common in thearea because there is not muchwinter wheat grown for grazingand pastures aren’t suitable.Still, the prices are historical-
ly high for the area. Butmanyproducers are resisting thetemptation to take replacementheifers and cows to the salebarn for quickmoney.
“There’s some skepticism,but at the same time, price pro-jections for the next few yearsare high,” he said. “And this
will still induce people to holdback some females as there’s anopportunity to rebuild with therangeland and pastures that wehave.With calf prices as high asthey are and likely to stay highfor at least the next few years,you could easily pay off the in-vestment in a young pair in twoor three years.”And the fact that the region
was hit hard by the drought, ashard as parts of West Texas andthe Panhandle, doesn’t seem tobe discouraging producers fromtaking a long-term view, Rus-sell said.“Could the rains tail off
again?” he said. “Well sure,but I think there are a numberof people holding back heifersand taking advantage of thefavorable price projections andimproving rangeland and pas-tures.”
Producers, from Page 6
See DROUGHT, Page 19
January 2015— Issue 2 The Land & Livestock Post16
Rural Land LoansCountry Home LoansFarm & Ranch LoansLivestock LoansEquipment LoansOperating CapitalLeasing
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NewsFrom the beginning of the
drought through last year, theamount of land designated forhunting- and wildlife-manage-ment use increased by about athird to 4.1million acres. The ex-tra incomeoffersfinancial stabil-ity to ranchers who have not yetfully replenished their numbers— down about 18 percent from13.3millioncattle inTexasandatthe lowest point nationally sincethe early 1950s.Several months after becom-
ing a partial owner of the Bar LRanch with her fiance two yearsago inNorthTexas,MandyDaus-es realized the profit marginswere thinner than she expected,due in part to having a smallerherd that was culled by nearlythree-quarters. She now worksfull-timeataveterinarian’sclinicand spendsnights andweekendstending to the ranch, catchingstray cattle and custom-balinghay for extra income.
“Even thoughwedon’t have asmany (cattle), they’re bringingin somuchmoneywe can justifysmaller numbers and still oper-ate,” saidDauses,whoseranch inKemp now holds about 120 headof cattle.While industry groups don’t
keep count of how many ranch-ers are generating alternativeincomes, they have noticed anuptick amid continued concernsof water scarcity and poor graz-ing conditions.Ranchersmore often are turn-
ing to hunting ventures becausewildanimalsdonotrequiregrassto feed on, cattle raisers associa-tion spokeswoman Stacy Foxsaid.“Theyrealize theycanmakea lot of money without as muchinput,” she said.Some are marketing hunting
opportunities and corporate re-treats to the oil and gas industry,particularly inWestTexas’Perm-ian Basin and the Eagle Fordshale formation in South Texaswhere production is booming.
Income, from Page 9
The Land & Livestock Post January 2015— Issue 2 17
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News
Panhandle/SouthPlainsOut here, people are taking
advantage of what we had,which was some decent rain inthe summer, especially Augustand September” said TedMc-Collum, AgriLife Extensionbeef cattle specialist in Ama-rillo.And though the Texas High
Plains has had some relief fromthe drought, it hasn’t had theturnaround that many otherparts of the state have, McCol-lum said.“There are some areas in the
Panhandle that are still want-ing for rain,” he said. “We hadmoisture and grew some grass,but you don’t have to dig verydeep to find dry ground.”Though the good summer
rains began recovery of range-land inmany areas, winterwheat for grazing remains amixed bag, McCollum said.Where it was planted early andbenefited from rains in August
and September, or it was grownunder center pivot irrigation,stands are good.Where it wasplanted late, stands are shortand not suitable for grazing.Wheat was planted late be-
cause the preceding crop waslate being harvested or the latesummer rains prevented grow-ers from getting into fields toplant, he said.“So we’ve kind of had two
ends of the spectrumwhen itcomes to wheat,”McCollumsaid.As elsewhere, Panhandle
stocker calf prices are his-torically high. The first ofDecember, across the primaryauctions in the Panhandle, 450-500 -pound steer calves weretrading from about $2.80 to 3.25a pound, while lighter end of500 pound steer calves were go-ing for $2.80 to $3, depending onquality and lot size, he said.But evenwith calf prices so
high, any Panhandle wheatthat’s grazable likely will havestocker cattle on it, he said.“If you look at what the
prices for light calves were back
earlier in the fall, stocker cattleproducers can project a prettygood net margin in the spring,”McCollum said.As for restocking cow/calf
herds, that’s a differentmatter,he said. True, the improvedrange conditions are prompt-ing some livestock producers tobring their cowherd numbersup, but there’s some holdingback.Most cow/calf operations will
be on rangeland or perhaps onretired U.S. Department of Ag-riculture conservation reserveprogram acres, and a return tofull-fledged drought conditionscould change everything, ac-cording toMcCollum.The prices of cows alone are
holding some people back, hesaid.“The first of December,
young tomiddle age cows thatare three to eight months bred—meaning they will be ready
to calve sometime after Christ-mas—were bringing $1,700 to$2,700 in Amarillo,”McCollumsaid.“I’d say the restocking of
those areas is fairly tentativeright now. There are folks wait-ing to see if the summer of 2014was a good year in themiddleof a drought or if the drought isactually broken.“Some of these guys are little
bit leery of paying high dollarfor a cow and finding we arestill in a drought,”McCollumsaid.
Drought, from Page 16
The Land & Livestock Post January 2015— Issue 2 19
