Adam Tilley loads feed at Elk River Farm & Feed, where he works. The store reported prices for feed are up across the board as fuel and corn prices continue to increase.

Photo by John F. Russell

Adam Tilley loads feed at Elk River Farm & Feed, where he works. The store reported prices for feed are up across the board as fuel and corn prices continue to increase.

High corn prices hit hard locally

Costs expected to affect price of cattle and hay supply

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Elk River Farm & Feed employee Adam Tilley loads feed into the front of a horse trailer for a customer at the store Thursday afternoon. Ranch owners have seen increasing costs as the price of fuel and corn continue to rise.

— Most cattle ranchers don't pump pounds of corn into the bellies of their beasts. But by all accounts, the record high price of the grain is having a negative impact on the ranching industry.

The average price for a bushel of corn hit a record at more than $4 during the 2007-08 season. Prices now sit at more than $6 a bushel, and the average for next season is expected to be $5 to $6. A couple of years ago, rancher Doug Matthews recalled, the price was $2.60 a bushel.

High corn prices push down the price of calves, Routt County Extension Agent CJ Mucklow said. Local ranchers produce mostly calves and yearlings, which end up eating grain in feedlots, he said.

"The input costs are higher, and that pushes up the cost of beef, and the price of calves goes down," Mucklow said. "Whenever we have high corn prices, we have stagnation or decrease in calf prices. : In the long run, beef gets so expensive that people switch to other protein sources like chicken or pork because they're cheaper."

Cattle accounts for about 70 percent of the agriculture in Routt County, Mucklow said.

Costs are up for feedlots on the Front Range and elsewhere because they use corn. Those cost increases get passed on to the rancher. On top of that, transporting animals has become more expensive because of high diesel fuel prices.

Ranchers, feed sellers and Mucklow attribute high corn prices in part to the demand for biodiesel fuel. The Economic Research Service of the U.S. Department of Agriculture reported that corn use for ethanol was expected to increase by 33 percent in 2008-09, after an estimated 42 percent increase in 2007-08.

Monthly ethanol production hit a record high at 518,000 barrels a day in February, the most recent data available.

The research service predicts record prices of feed grain for the 2008-09 season, too. Production of feed grain for 2008-09 is projected at 325 million tons, down from 351 million in 2007-08.

Hay is no escape

Local ranchers typically feed cattle hay and grass and then sometimes grain supplements, said Colby Townsend, who owns Elk River Farm & Feed with his wife. Their habits are changing, however, he said.

"A lot are not using supplements. : Most don't for their entire herd, but they might put replacement heifers on higher-quality feed, and that has been tough with feed prices," Townsend said. "With the cost of fuel driving up hay prices, that's just going to make it tough for everybody."

Yampa Valley Feeds owner Doug Meacham said the effects aren't clear.

"The impact of the high price of corn is people are just not feeding any," Meacham said. "It just doesn't pencil out, and whether this fall it affects the cattle prices remains to be seen. I'm sure it will have some effect on it - lower prices for cattle maybe. I hope not."

Townsend said he has had to raise prices 30 percent at the feed store during the past six to eight months. He attributes the increase to higher prices for grain and diesel fuel. Fewer truckers are willing to come all the way to the Steamboat Springs area, Townsend said.

"Obviously, our prices have had to go up to affect overhead and the cost of goods," he said. "Our labor requirements have been down some because of not selling so much feed, but we haven't had to lay anybody off or anything like that."

Cutting back on grain

in favor of hay doesn't save ranchers from cost increases, Mucklow said. The price of hay has increased steadily in the Yampa Valley and nationwide.

"It's a tight supply, a locally tight supply," he said. "A lot is exported to the Front Range."

Mucklow said hay production accounts for 15 percent to 20 percent of the agriculture industry in Routt County. The price of cutting, raking, baling and stacking hay - known as "putting it up" - has risen from about $40 a ton five years ago to more than $60 a ton last year, he said.

Hay prices and corn prices are not directly related locally, Mucklow said. In the Yampa Valley, prices are up because demand is up and the valley's hay is perceived as valuable. Demand for hay for recreational horses also strains the supply, he said.

"There is a correlation between hay prices and corn on a national basis," Mucklow said. "As the corn price goes up, we try to substitute more with hay, and that supply tightens."

Trends and some hope

Matthews, who produces and sells all-natural beef locally through his River Ranches, said he paid 40 percent more for hay this year. Record diesel fuel costs also have made him feed more money into hay production on his own land.

"We use a lot of diesel fuel in our tractors to bale the hay," he said. River Ranches had to increase prices last year to address high overhead.

Matthews uses supplemental grain to finish about 40 percent of his cattle, and the rest feed totally on grass. He said he benefits from raising highland cattle because the animals' meat marbles well on grass.

"I think we'll see more of a shift to grass-fed beef," Matthews said of the industry. "I think we have the particular genetics to finish out our cattle on less grain, so I think our particular breed of cattle has an advantage."

Mucklow said a bigger international market could stabilize cattle prices. Japan and South Korea are allowing U.S. beef imports after banning them for years because of mad cow disease fears.

Whatever happens, the bigger picture is sure to affect the smaller picture in Routt County, Matthews said.

"Even though we're a local producer," he said, "we're part of the global economy."

- To reach Blythe Terrell, call 871-4234

or e-mail bterrell@steamboatpilot.com

Comments

WZ 6 years, 6 months ago

Ethanol is such a great idea, no?!

It seems to me the increase price of food should also be factored into the increased price of gasoline.

I'm curious to know the additional dollar amount per gallon of gasoline that the use of corn as fuel has caused, and where it's expected to go in the future.

Ethanol is bassackwards.

My (and just about every) vehicle actually gets noticeably lower fuel economy using ethanol fuel. It may (directly) cost a few pennies less per gallon at the pump, but, I have to buy more of it to go the same distance as fuel without ethanol in it. And not only that, but I'm paying higher food prices for the use of ethanol as well.

We should pump the billions of dollars that are used to create the Ethanol infrastructure into producing more fuel efficient automobiles and alternative transportation.

Wouldn't you rather drive a 100 mpg car or ride a bicycle around town than pay $10 for a bag of Dorittos?!

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justathought 6 years, 6 months ago

We also need to be drilling for our own oil while creating alternative energy that does not include our food supply. Give incentives to the "big businesses" to create alternatives and get the federal government out of their businesses and we'll get self-reliant a lot quicker. The consumer can save money by traveling less and walking more but everyone has to eat. Every time the government implements a "plan" to fix one problem, they cause twice as many in different areas, government has gotten way to big and powerful, it's no longer we the people, it's we the politicians.

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ColoradoNative 6 years, 6 months ago

Woodsman the "oil crisis" was not predicted long ago. It was planned long ago. We have plenty of oil to drill in this country. Environmental constraints and the planned lack of refineries are part of the reason we are in this situation. Tell me when is the last time we build a refinery in this country?

Peak oil is BS. Supply has been kept down for a reason. I'm actually ok with that as it's forcing Americans to change our thirsty habit for oil anyway. My bike is getting me around just fine.

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SilverSpoon 6 years, 6 months ago

Ethanol: If done properly like modern plants, the sugars are fermented out of the corn, and the protiens left over in the mash are fed to cattle. Capture the manure gas(methane) to heat your mash and out comes ethyl alcohol, a fuel for your car.

The question is: Is it more efficient to give the corn straight to the cattle, or extract the energy first? Also, is it best to let the manure lay on the fields, or capture the energy it contains? Old school ranching needs to be re-evaluated.

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ybul 6 years, 6 months ago

The problem with feeding the left overs to the cattle is the high level of sulfur within it, creating problems for the cattle. The Ecoli are also much more toxic when the cattle are fed this stuff.

Ethanol, is not that great an idea, as it requires large amounts of fuel for harvest, large amounts of petro chemical fertilizers and substantial subsidies which will be paying back the chinese and the banking elite of the world forever.

Old school ranching is being re-evaluated, it is the feed lot industry that came about as a result of subsidized grains, which needs to go away.

The cows eating grass in the field is a much more sustainable system, and one which uses much less fuel reducing demand, the price of gasoline and probably food at the same time.

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housepoor 6 years, 6 months ago

all grass fed just doesn't seem to taste as good

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SilverSpoon 6 years, 6 months ago

http://www.extension.iastate.edu/Publications/IBC18.pdf The tables at the bottom reflect a 0.1% difference(if a difference at all) in sulfur of regular feed and feed after distilling.

I should have been complete in my first post, manure is a great alternative to petro fertalizers, after all the anaerobic bacteria remove most of the carbon, , you are left with nitrogen rich inert compost(aerobic bacteria free).

Also, cows aren't very good animals for the desert climate of colorado, they need natural green grass, bison used to live here for a reason. It is too bad the white man all but removed them from the planet.

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dundalk 6 years, 6 months ago

the other day, talk radio host glenn beck made an excellent point with regards to these so called alternative fuels.

even if the consumer was able to afford a new vehicle, with alternative fuels, how are gas station owners going to be able to make a living? - having to convert filling stations to alternative fuel and such.

i say start drilling on our own resources and let go of this nonsense of an ear of corn running my big suv

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colowoodsman 6 years, 6 months ago

I belive the current oil 'crisis' was predicted long ago by geologists that understood the difference between ' proven oil reserves' and 'easily recovered oil'. The oil that is easily recovered has peaked and from here on out the costs of recovery will continue to rise. Add to that the slumping dollar, increased demand from India and China and plain old fashioned greed. We are also running out of coutries to invade for 'black gold'. On the other side of the coin rising fuel prices reduce demand and make alternative energy more feasable. I think sugar beets are also a possible source of ethanol and soybeans are good for bio-diesel. Locally beetle-killed trees are a great source of renewable energy. Bringing back bison or buffalo has been tried with disappointing results.

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blackthroatedwind 6 years, 6 months ago

SilverSpoon,

Yer handle says it all. Only one born with a silver spoon would think that answers are all that simple!

"Old School ranching needs to be re-evaluated." You never ranched, did you?

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bloggyblog 6 years, 6 months ago

blog has tried the grass fed beef and liked it. it's much leaner and has a slight gamey taste, a little like buffalo. there used to be a buffalo ranch out on C.R. 43 at the intersection with cowcreek. woodsman, i agree. from what blog has read peak oil production is not BS and needs to be addressed. blog has recently heard about efficiency kits that can be retro fitted to existing autos to greatly improve mileage.

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SilverSpoon 6 years, 6 months ago

Realize that glenn beck is not a worthy news source, he is a nitwit alcoholic. Only one person equals his ignorance, Rush limbough himself, and maybe George W.

Simple solutions are definitely the answer. It was revearsing the Carter admin policies that got us into this energy crisis. Have you noticed the fossil fuel and nuclear companies running propoganda ads? Lucky for them most people only have half a brain, like Mr Beck.

Peak oil is real, it took 300,000,000 years to shift plates, and press organic matter into the oil and coal we enjoy today. We extracted the easy fuel in 150 years, now there is no more "easy" black gold to be found. He comes $7.00 gallon. sell the F350 while you still can.

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justathought 6 years, 6 months ago

glenn beck does not claim to be a "news source", he does not try to hide the fact that his shows are opinion and not news, dundalk said beck made "an excellent point". Beck admits he is an opinionated alcoholic but he does make a lot of sense most of the time and he's a hell of a lot more middle of the road politically than most. If you want to see someone with half a brain feeding propaganda to the masses and profiting from mass hysteria, look at Gore. Oh wait, you think something good actually came out of the carter admin so you are probably one of the masses kissing the feet of the almighty Gore.

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dundalk 6 years, 6 months ago

silver:

the carter way? you gotta be kidding me. hello....i still remember my parents sitting in long lines, on even and odd numbered license plate days, in the searing summer heat in the san fernando valley of southern california to fill up their cars. we didn't go on summer vacations that particular year because my parents worried about the cost of gas and the fact that they might get stranded in some town where the filling station had run out of petrol.

I, for one, am relieved that Carter is out of office.

and you think glen beck is ignorant? YOu take the spoon, silver!

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colowoodsman 6 years, 6 months ago

CN -the oil crisis was indeed predicted and OUR long term strategy has always been to use up the rest of world supply first and save our own till last.

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colowoodsman 6 years, 6 months ago

bb-better not tinker with the family auto unless you really know what you are doing. Most mileage kits are gimmics and could void your warranty or cause serious damage to your engine. At this altitude the best thing you can do is make sure your engine is getting plenty of air, in other words keep your air filter clean. Trust me on this one!

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