Despite declining cow numbers, beef-raising opportunities are still bountiful in the state
Lexington, KY - With horses as Kentucky’s main agricultural image and the growth of the poultry industry within the state, many Kentuckians may not realize the importance of beef raising to the state’s economy. Kentucky is the largest beef-raising state east of the Mississippi.
Beef cattle in Kentucky are mainly Crossbred, Angus, Charolais, Hereford, Simmental and Limousin breeds. According to a 2007 agriculture census, about 38,000 Kentucky farms have beef-raising operations.
Some of those farms are the sites of former tobacco operations. Others previously had some beef cattle along with tobacco and have added more cows in recent years to increase profit margins from the beef herd.
“The Agricultural Development Funds have assisted producers greatly by providing cost-share opportunities for facilities, genetics and forage improvements, as well as educational opportunities to enhance their animal management knowledge base,” said Jeffrey Lehmkuhler, assistant extension professor and extension beef cattle specialist at the University of Kentucky.
As for how beef farmers are doing in Kentucky now, Lehmkuhler said “cow-calf profit margins continue to be strong with the current feeder calf prices.”
Despite those favorable prices, cow numbers are down. Inventory estimates in January 2012 were 995,000 beef cows, which represented a 3 percent decrease from the previous year, Lehmkuhler said. He also noted that beef cattle numbers have declined for the past five years.
The drought has been a negative factor on beef raising in many states, according to Lehmkuhler. He said that it “likely had a greater impact on numbers nationally than the recession.”
But the recession has had its effect, too. It has led to “lending institution changes [that] have made it more challenging to get farm loans,” Lehmkuhler said. “Farmers simply have to have business plans and greater knowledge of the potential economic risk and demonstrate how they plan to manage this risk to ensure they can pay back loans.”
One way to reduce financial risk and capital outlay is to run a stocker operation. This type of beef farming entails buying calves in the spring and selling them in late fall, so that they graze on grass. The farmer doesn’t have the expense of raising or buying hay.
“Currently, for younger producers with limited equity, the stocker enterprise has great appeal. Little facilities, equipment and time are needed to be successful in forage-based growing programs,” Lehmkuhler explained.
He added that with a stocker operation, beef raising “can be seasonal, allowing time off in parts of the year to get a break and keep the enthusiasm going with the next set of calves.”
“The biggest challenge [for a stocker operation] is that feeder calves for grazing have to be born, and with the cow numbers continuing to decline, where will these calves come from in the future if we don’t keep cows on the farms?” asked Lehmkuhler.
Because stocker operations are most profitable in warm-weather states with their long grass-growing seasons, the colleges of agriculture at UK and the University of Tennessee have for years co-sponsored the annual Midsouth Stockers Conference.
The conference allows Kentucky and Tennessee beef raisers to learn from each other what works and what doesn’t in their daily operations. The industry and academic experts also cover broad aspects such as legal issues and how other parts of the beef industry influence stocker markets and prices.
“Understanding how to interpret market signals to help in making purchasing and marketing decisions is important to minimize market risks and improve profit potential,” Lehmkuhler said.
He added, “We strive to put together a great educational program for Kentucky and Tennessee producers each year, along with our industry supporters. I personally think it is one of the best educational opportunities in the upper Southeast.”
In terms of horses versus cattle on Bluegrass land, Lehmkuhler said, “I see no conflict, but rather a synergy. Current beef prices, combined with a depressed equine market, provide horse owners an opportunity to diversify and add an alternative income source.”
Another advantage of having cattle on a horse farm is that “it reduces labor and fuel involved in mowing fields, as the livestock can graze this excess forage.”
“The largest obstacle I see is a lack of cattle husbandry knowledge, just as I could not walk in today and start managing a Thoroughbred farm,” Lehmkuhler said. “Horse farm owners may find it more appealing to lease land to beef producers rather than own the cattle themselves.”
Kentucky became a strong beef cattle state for two reasons. It has the soils in which good grass grows and hilly landscape that cattle can graze, although it wasn’t suitable for growing row crops.
“However,” Lehmkuhler noted, “improved grain genetics and higher grain prices are making marginal ground that previously was not row-cropped attractive, and these fields are being converted to grain.”
That means that in the future beef-cattle farming in Kentucky “will likely be confined to the more rolling hill ground and rougher landscapes, as more row-cropping removes marginal land to grain production to meet the needs of an ever-growing world population.”