Kyle Dean, Host: And we are back here on WTIF 9:39 and it's the return of our UGA Tifton Farm Chat. We stopped before the Christmas season got in., but now joining us for our Market Monday is Curt Lacy, Cattle Economist with UGA Tifton. Curt, long time no talk. It is good to hear from you.
Curt Lacy, UGA Tifton Campus Cattle Economist: Yes, good to be here this morning, Kyle.
Kyle Dean, Host: Well, let's talk about the cattle and the pricing and that sort. Let's kind of re-cap 2011 for the listeners out there that maybe didn't hear your last update. How did we do in 2011 and what do we see coming up in 2012?
Curt Lacy, UGA Tifton Campus Cattle Economist: Well, 2011 was actually a pretty good year. It was a real interesting one for a lot of cattlemen here in the area and in the southeast. You know we hit record prices this past year. In terms of prices, we had really, really good prices. Of course the thing that really kept us from making a lot of money, a killing as they say, (Dean: Right.) is just the fact that we had the drought. We had a lot of problems with our pasture conditions. Our feed cost were up and so that created a lot of challenges for a lot of our guys in this area. We also saw some people reduce their herds, liquidate them. But overall, we had a really good year because of the high prices.
Kyle Dean, Host: We talked about though, over the course of the summer, we talked about reasons why this drought wasn't good for the cattle economy, I guess you could say. Mention some those if you will. You know, like the cows not having the water to drink and laying down and that thing.
Curt Lacy: UGA Tifton Campus Cattle Economist: Yes. The drought really causes a lot of problems from the heat stress. A lot of times cows won’t conceive in the heat and a lot of that is just related to nutrition. When the grass isn't growing, there is no nutrition there. So you can have problems with future calf crops which those are the things that will show up this year. Calves don't gain as well so you have lower production. And then also, if it is dry enough like we saw this past year, you have to feed them hay. So you actually wind up with higher costs and less revenue because of the lower production.
Kyle Dean, Host: It's a real trickledown effect. What would you say, on average, I know this is speculation purely on our part--on my part especially. Well, you talked about how that trickledown effect kind of happens, how long does it take to get back on the up and up on an upswing?
Curt Lacy, UGA Tifton Campus Cattle Economist: A lot of times if the cows can receive adequate nutrition in the next year, you can follow that up the next year. But the issue a lot of times is just on the pasture conditions. A lot of the research that has been done has shown that, a lot of times, if we windup really abusing a pasture, which we do during those situations, it can take 2 to 3 even sometimes 4 years for those pastures to fully recover and that is assuming that you have decent growing weather.
Kyle Dean, Host: And, now we are in 2012. What is the outlook overall for 2012?
Curt Lacy, UGA Tifton Campus Cattle Economist: I think overall we have a really good outlook for this coming year in terms of the cattle prices. The two big concerns that we have are going to be the economy and this drought that continues to linger. But again, the thing that is so supportive of the market is the fact that we do have fewer supplies. We have less beef production. We're looking for even lower beef production this year, somewhere in the neighborhood of a decrease of 4-5%. The economy does continue to limp along, but it is expanding slightly so there is some growth in the economy. If we can just hold everything together, I think in terms of prices, we are going to be in really good shape this coming year.
Kyle Dean, Host: Let's talk about the positives first. You mentioned maybe some revenue increases there, some bigger pricing opportunities for large groups of cattle as well. Talk about the positives involved in 2012.
Curt Lacy, UGA Tifton Campus Beef Cattle Economist: The positives are that we have high prices right now, and if everything holds together like we expect it will, those prices are going to stay with us and they could even be a little bit higher later in the year.
For people that can move cattle in truckload lots, and for those that are not familiar with what we are talking about here, those are lots of 48 - 50,000 pounds which is really what you can load on a semi – 48,000 pounds. That weight is what the contract is on the Chicago Mercantile Exchange. So, people that can move truckload lots of cattle can utilize futures in options to lock in, basically book their cattle if you will. They have to do that by hedging. But right now, they can lock in somewhere in the neighborhood of $1.50 a pound for basically anytime during this year. Now that is going to vary by the weight. Lighter calves, they can price them for a higher price; maybe heavier ones, in that 7 - 800 pounds, might be a little bit less. But we are looking at somewhere in the neighborhood of $1.50. They could lock in today if the wanted for the rest of the year.
Kyle Dean, Host: And of course, with the positive there are always negatives. And one negative that immediately comes to mind is we talked to climatologists around the area, they say the drought is going to be here throughout the rest of this year as well. Your thoughts on that?
Curt Lacy: UGA Tifton Campus Beef Cattle Economist: That certainly is a major concern for us because we had a tough year last year and we are looking again at a very tough year this year. I really don't know what you can say other than the fact that we need rain and if we don't get it, we will probably see even fewer cows this coming year than we had last year.
Kyle Dean, Host: You can just go out and look at streams and creeks and ponds and there is literally nothing in these ponds now.
Curt Lacy, UGA Tifton Campus Beef Cattle Economist: No. It is amazing the different places you drive around where you are used to seeing at least some water in a pond and there is nothing, you could wade across many of them that I see.
Kyle Dean, Host: Of course, we’re talking with Curt Lacy, a Cattle Economist here with UGA Tifton, on our UGA Tifton Farm Chat. It’s Market Monday and the return of our UGA Tifton Farm Chat.
There is a seminar coming up, it's an Ag Forecast. Talk about what’s going to be going on January 24th here in Tifton.
Curt Lacy, UGA Tifton Campus Beef Cattle Economist: Alright, January 24th will be one of 4 or 5 workshops or seminars that we are having across the state. They are Ag Forecast meetings that are sponsored by Georgia Farm Bureau and the College of Agricultural and Environmental Sciences here at the university.
The meeting will be out at the conference center. We'll have a couple of speakers. We'll have a keynote speaker and then we will also have some of the economists from our department that will be giving an overview market outlook and economic forecast for not only the general economy, but also many of the major commodities in this area.
So if people are interested, there is a website, I believe that you have right there that you can give them. Another way to do that would be to just contact the local county agent to register. There is a fee for that, but food is included. So you get not only some information but some food too.
Kyle Dean, Host: Let me give you the dates and locations if wherever you are listening. If you are listening on-line, you might be in east Georgia or central Georgia. Monday in Macon at the Georgia Farm Bureau; Tuesday, of course, right here in Tifton at the UGA Tifton Campus Conference Center; Wednesday, the 25th, in Statesboro at the Nesmith Lane Center; Thursday, the 26th, in Gainesville at the Georgia Mountain Center and then Friday in Carrolton, the 27th, at the Carroll County Ag Center.
Again, like Curt said, there is going to be a luncheon there – that is going to be last. They'll have coffee and onsite registration at 9. The Ag Forecast Seminar will be held from 10 – Noon, so that's when those experts will come on and talk, and then the network luncheon from 12 – 1.
Deadline to register is at 5 p. m. on January 19th. It's $30.00 for an individual seat or $200.00 for a table of 8. You can go to this website that I'm on right here, it's easy to find, georgiaagforecast.com. They can find out some great things that are coming too and just find out it's a good way to network with other farmers and other experts in your field to try to find out what’s good for your operation this year.
Curt Lacy, UGA Tifton Campus Beef Cattle Economist: That's right. There will be a lot of good information there. Anybody that is anybody in agriculture will be there.
Kyle Dean, Host: Well, Curt, we appreciate you for coming by here today and I guess we will talk to you again in 3 weeks.
Curt Lacy, UGA Tfiton Campus Beef Cattle Economist: Alright, sounds good, Kyle.
Kyle Dean, Host: Alright we'll be back right after this on WTIF.