SHAWMUT — In the Musselshell River valley, where cattle outnumber people by staggering proportions, Gene and Jim Taber are mixing breakfast by the bucket load.
A few tons of hay, two tractor scoops of supplements, and some cold tank water gets the meal deceptively steaming like hot porridge on this 2-degree day.
Seventy-year-old Gene fires up the feed truck to deliver the goods. And the Tabers' Black Angus form a chow line an eighth-mile long.
The Tabers, father and son, keep several hundred cattle at their two-man feedlot. Here, they'll use grass cut from their land to add 200 to 300 pounds to each animal's frame in hopes of getting a few more pennies a pound from their buyer.
The chatter on the truck's radio is all about the recession, sagging property values, poor consumer confidence and an unemployment rate of more than 9 percent that has for months held the heads of the nation's 15 million jobless underwater.
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But here, the economic story is just the opposite. Cattle prices in Montana neared record highs in 2010 and economists are predicting they will remain strong this year.
A growing Asian middle class is driving up demand for American beef at the same time this nation's cattle herd is at its smallest in 60 years.
That's the good news, not only for the Tabers, but Montana in general. In four of the last six years, gross income from cattle sales has surpassed $1 billion, according the National Agricultural Statistics Service. Inevitably, that money finds its way to town. Exports can only keep the trend going.
Jim Taber, a single father in his late 30s likes to joke that if every person in China would eat just one hamburger a week, “we'd be in good shape.”
There are real challenges ahead, however. With the cattle inventory so low, insiders say the need to expand is undeniable. For years, when demand for beef increased, American ranchers opted to pack weight on the animals they had rather than increase livestock numbers.
Last year, there were 4 million fewer animals in the U.S. beef cow herd than there were 14 years earlier, but the weight of the beef produced — 25.9 billion pounds — was slightly higher, according to the U.S. Department of Agriculture.
Most of those pounds were put on by feeding cattle corn in feedlots. The venture wasn't cheap and in recent years forced cattlemen into a buying war with ethanol producers. But feed investments can take care of themselves in a year, when the cattle go to market.
Conversely, increasing the size of a cattle herd can take years to pay off and trims profits almost immediately.
“In the cattle industry, it takes many years to first breed an animal and then raise her calf until it's ready for slaughter. It's an extremely long period of time,” said Bill Bullard of the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America.
A rancher growing his herd has to first decide to hold a heifer back from market so it can be bred. The choice immediately cuts the rancher's net income about $700 per heifer. His feed costs go up as the heifer stays on the ranch throughout the next year, first pregnant and then caring for her calf. It can easily be two years before the sales price of the calf tells the farmer whether he made the right decision.
On the ranch, these aren't easy decisions to make, Jim Taber said. There's no telling whether the current strong prices that might have a rancher thinking about holding back a few heifers will be around when the animal's calf finally goes to market.
There are also myriad other business costs to consider: the price of fuel, the price of feed, whether rainfall with be good enough to bless you with tall grass, or if the winter cold will cause your cows to eat more to stay warm.
Many insiders see confidence in the economy as the biggest factor moving forward.
“While current prices suggest profitability for most producers, there seems to be considerable hesitation about herd expansion,” said Derrell Peel, an economist with Oklahoma State University. “It is certainly related to broad-based uncertainty about the economy and the industry and to the volatility in ag markets.”
Peel, who grew up on a Montana ranch, said ranchers today need to be much more mindful of fuel, fertilizer and feed prices. They need to think more like farmers, thinking about profit margins rather than just the market price.
In December, Peel was warning that while prices were high, they probably still weren't high enough to erase the risks of increasing the nation's herd.
Bullard said for many ranchers the lack of confidence comes from a concern that cattle futures are being unfairly influenced.
Ranchers watched from the sidelines as wheat prices quadrupled and then burst over a two-year period from late-2007 to late-2009. They worry this might be beef's turn on the roller coaster.
“We need to fix the marketplace so that ranchers are confident they have a robust marketplace to market their livestock,” Bullard said.
Bullard sees the meatpacking industry as having undue influence on market cattle prices. R-CALF USA is lobbying the Commodity Futures Trading Commission to curb the kind of excessive speculation that caused the wheat bubble in the futures market in 2008.
Jim Taber said there are other elements holding ranchers back from adding cattle to their businesses, starting with age.
The average cattle rancher is now in his late 50s and there is no shortage of 70-year-old hands like Gene Taber working cattle. At some point, the added work of a larger herd isn't appealing, the younger Taber said.
The father and son held some heifers back last year. Jim Taber couldn't say the same for the older ranchers in his area.
Still, ranching is a hard business to abandon. Working cattle has never been easy along the Musselshell River, which does go dry on occasion.
The Tabers settled here in 1911, lured by the promise of free land. That first year, the rain fell steady and the crops stayed green and William Taber thought the best use of his property was crops. But the green year turned out to be a fluke.
He switched to sheep, and then cattle, searching for something that worked on land that was quickly proving to be worth the price he paid.
“His favorite saying was 'They got the wrong side turned up,'” Jim Taber said, meaning the rocky brown sod was pointed the wrong way.
Still, the Tabers talk about the “pull of the land” and its heritage, firming up their commitment to finally reap the family dream planted all those years ago.
You don't stick it out for 100 years without some optimism. Like Jim Taber, Charlie Rein of Big Timber sees enough promise in the cattle economy to keep his family tradition alive for his three boys. Rein is 29. His sons have a combined age of 11.
“Yes, I think I'm cautiously optimistic, is how I would put it,” Rein said. “I don't know where the pay comes out, but it's not $20 an hour.
“I ran into a real interesting quote from Dr. Jayson Clay of the World Wildlife Fund. He said the population will expand from 6 billion to 9 billion, but because of the development of overseas economies, and the demand for higher protein, the caloric values will be more equivalent to 18 million people.
“That's what makes me comfortable breeding a few more heifers this year.”
Contact Tom Lutey at
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Contact Tom Lutey at
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