Monday, March 7, 2022

American Cattle Inventory Down & Fuel Prices Up in 2022


Dear Friends,

No one needs to tell us just how tough times are getting under Joe Biden. And no, no one needs to tell us that a little over a year ago when President Trump was in office about how we had a booming economy. No one really needs to remind us of how China and North Korea were in check, or of how there was peace in Ukraine. Most of us know that our Southern border with Mexico was secure, how we were close to finishing a wall to keep out drugs, or how we were keeping child sex traffickers, MS-13, Mexican drug cartels, and Middle-Easterners on the terrorist watch list out of our country. 

It wasn't that long ago when we Americans, for the first time since the 1950s, had become energy independent again. Of course, most of us know that gas prices today, the price per gallon, have more than doubled since Joe Biden entered office. 

Years ago, I wrote about how oil is more than just fuel for our electricity and transportation needs. I spoke about, as often as I could, how more than 45% of every barrel of oil that we use does not go to our energy needs. It's true. Almost half of every barrel of oil that we manufacture or import into our nation goes to our manufacturing needs. 

The computer that you are reading this blog on is made of oil. So are your cellphones, smartphones, much of our cars, radios, televisions, the plastic shields that were everywhere during COVID-19, our clothing, and over 6,000 other products that we take for granted on a daily basis are all made from oil. 

What that means is simple. If we produce our own oil then our manufacturing flourishes because it can make products cheaper than our having to import oil into our country. It means we are not dependent on other oil-producing countries to build computers and other petroleum-based products here at home. This influences the growth of our economy and whether or not jobs are being created.  

Of course, besides manufacturing, besides our ability as Americans to build things for ourselves and not have to be dependent on foreign companies to make and ship up what we need, we have transportation and energy needs to be concerned about. And really, while heating oil and propane are going up, a lot having to do with the cost of transporting them, gasoline and diesel fuel are at an all-time high. If we have American oil production, then we should be paying less than half of what we are paying right now. With American oil production, we will be paying less to heat our homes. American oil production also means cheaper electricity for those electric cars that some people want. You know, the electric cars that will be powered by electric power plants which Environmentalist are stopping us from building. 

Supporting American oil production means that while we have cheaper fuel at the gas pump, be able to heat our homes, be able to charge electric cars, and also supply our American manufacturers with cheaper oil to make American products. All can be done even when there is an oil crisis in the world. Of course, one has to want to do it to make it happen. Sadly, the Biden administration is against all of the above. 

Yesterday, I spent $100 to buy 19 gallons of gas for my car. Two days before that, I bought hay for my horses at an incredible price of $19 per bale of alfalfa. I have rescue horses. If the cost keeps going up, I may not be able to afford to keep them. Frankly, for the first time since the Obama days, I'm worried about how to keep them fed.

I feed my horses alfalfa because of its high nutritional quality. While some people feed oat hay, I don't because of its high protein content and high digestibility. Because of that, it takes less hay to keep their weight on them. I would have to use a lot more oat hay to do what I do with smaller amounts of alfalfa. That makes alfalfa more economical to feed -- even though alfalfa is more expensive per bale.

Alfalfa hay is widely used as a protein and fiber source by people like me who feed horses. Just as a side note, while I've heard of cattlemen finishing beef cattle on alfalfa, I've also heard that they are very cautious when doing so because alfalfa can cause boat in cattle. Most cattlemen that I've known will use grain to finish their cattle before market. 

The rule of thumb that I was taught is that a good finishing daily ration is 10-15 lbs. per day of corn, oats, or barley fed for grazing cattle. If fed to a 900-pound steer for anywhere from 3 to 4 months should give a cattle producer a nicely finished animal. Of course, this depends on availability to pasture and whether or not you are finishing your cattle during the winter months. If that's the case, then you might want to increase the amount of grain by a few pounds per day.

What does that have to do with fuel? Because of rising fuel prices brought on by Joe Biden's desire to cater to the Climate Change crazies, his actions of shutting down American oil producers, the cost of raising beef is going through the roof. And no, I'm not talking about the horrible impact higher fuel and fertilizer prices have had on farmers. I'm just talking about the terrible effects that attacking America's oil industry has had on cattle producers -- and subsequently the higher prices that we Americans pay for our food. 

Friends, an annual report from the U.S. Department of Agriculture's National Agricultural Statistics Service (NASS) comes out every January. On January 31, 2022, the latest report told us that America's cattle inventory is down 2% from 2021. That's not good news.

Other key findings in the NASS report states:
  • There is 91.9 million head of cattle and calves on U.S. farms as of January 1st, 2022.
  • Of the 91.9 million head inventory, all cows and heifers that have calved totaled 39.5 million.
  • There are 30.1 million beef cows in the United States as of January 1st, 2022, down 2% from last year.
  • The number of milk cows in the United States decreased to 9.38 million.
  • U.S. calf crop was estimated at 35.1 million head, down 1% from 2020.
  • All cattle on feed were at 14.7 million head, which is up slightly from 2021.
So folks can understand where this information comes from, to get an "accurate measurement of the current state of the U.S. cattle industry, the NASS surveys approximately 34,800 operators across the nation during the first half of January. Surveyed producers were asked to report their cattle inventories as of January 1, 2022, and their calf crop for the entire year of 2021."

According to the Livestock Marketing Information Center, they reported that the NASS report detailed beef cow herd size and changes at the state level. While there is some good news about how Idaho increased its production by 34,000 head, Washington is up by 13,000 head, and California increased its overall cattle production by 20,000 head, the bad news is that the U.S. beef cow herd has declined 719,000 head from a year ago. Among the largest declines in beef cow herds were South Dakota which is down 189,000 head, Texas which is down 160,000 head, Missouri which is down 94,000 head, and Montana which is showing a decline of 90,000 head of cattle. 

Some cattlemen who I know say there is a worse indicator of how bad things are getting. That would be the calf crop report because they say it's an indicator of what the future holds for the cattle industry. Friends, the calf crop for 2021 was reported at 35 million head. That's down 1.2%. And also, inventories of calves under 500 pounds were down significantly --  decreasing by 2.6%. 

Other highlights from the cattle inventory report include supplies of cattle outside of feedlots shrank by more than 600,000 head. The cattle inventory was slightly lower on the breeding herd and indicates tighter cattle supplies through smaller numbers of under 500 pounds and those outside of feedlots. 

This all leads to higher prices for cattle producers. How much are the higher prices? Per the NASS report: "This will be supportive of feeder cattle prices in 2022. LMIC revised its cattle price forecasts to reflect tighter feeder cattle supplies in 2022 and smaller production in 2023. LMIC has 2022 annual fed cattle prices $135-137 in the five-state area, 700-800 pound feeders in the Southern Plains $164-166, and 500-600 pound calves $189-193 per cwt." Yes, higher prices to buy and raise them means higher prices for consumers. 

And by the way, if you are thinking that sheep and goats might be the way to go, the NASS also reported that "sheep and lamb inventory continued its downward trend falling 2%, the lowest on record." That means their prices are also going up. 

One livestock market analyst put it this way, "While markets are one component of the cattle cycle, the critical factor driving the cattle cycle and the cow-calf sector of the cattle industry is forage and fuel prices." 

What does this all mean? All of the information that I'm giving you proves that feed and fuel affect the ag industry. It affects the amount of money that ranchers need to stay in business. And really, that translates to how many cattle they can afford to buy, feed, and transport. All of that and more consequently affects what American consumers are paying for food. If our cattle producers and farmers are having a hard time affording to grow crops and produce cattle, we will have an equal or worst time affording food. 

So, if you have to make the choice of buying gas versus buying food under Joe Biden, don't let political analysts fool you into thinking that this is not a result of lousy economic and political policies coming from the Biden admin. Friends, if you have to make the choice of buying gas versus buying needed medications under Joe Biden's pathetic economic policies, don't let political analysts fool you into thinking that this is not a result of Biden being completely out of touch with the American people. The wealthy are doing fine under Biden, we who are not wealthy are not.

This is all a direct result of taking economic and energy policies that exceeded expectations and worked in a positive way for years under President Trump -- and deliberately changing those policies for no other reason than Democrats' hatred for Trump. Yes, it's all about Democrats hating Trump. And no matter if their hatred for him negatively affects us, that's why we are in the pickle that we are in today. 

Friends, frustration is defined as "the feeling of being upset or annoyed, especially because of one's inability to change or achieve something." I hate being frustrated over things that I know damn well could be better -- especially since things don't need to be the way they are if people would simply go back to doing things the right way. And by the way, the "right way" should be defined as "the way that benefits Americans." 

And frankly, knowing that Biden refuses to do things that have been proven to benefit Americans is the biggest frustration of all. Of course, while I, like many Americans, am fairly powerless to do anything right now about the ineptness and incompetence of Biden and the Democrats in charge of Washington, I can assure everyone that my frustration and powerlessness will be alleviated during this November's election when I try to vote the anti-American bastards out of office.  

Tom Correa


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