Devastating wildfires shouldn’t stymie cattle market
March 31, 2017
The immediate devastation from the wildfires that swept across Colorado, Oklahoma, Kansas and Texas can be evidenced first and foremost in the tragic deaths of seven people. But the loss of thousands of cattle killed in the fires and the obliteration of 2,300 square miles of grazing ground and farmland will be felt by the affected farmers for years to come.
Darrell Peel, agriculture economist at Oklahoma State University, said even though the losses are "horrifying," they surprisingly will not have a noticeable impact on U.S. markets.
"When you put the losses in the context of the bigger marketplace for cattle, we really will not be able to detect any impact on cows or replacement heifers. It's still a horrible situation though. I've driven through the burned area, but on a national or global scope, the damage won't make a dent," Peel said. "Even with the blizzard in South Dakota that impacted an even bigger number of cattle, it didn't impact the market, which is mindboggling."
But the economic impact the wildfires will have on the individual operations will be devastating, Peel said. Some farms and ranches might not even financially survive the losses.
"The financial impact this will have on those operations will be felt for a number of years. If the grazing land did not have insurance and the cattle didn't have insurance on them, some of the producers may never recover. If all they had was property insurance covering the facilities, the buildings, the corrals and equipment, plus the houses, then my guess is it will be a very big loss individually," Peel said.
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In fact, Peel recently released figures highlighting the overall destruction and impact the wildfires had on Oklahoma. In that state alone, more than 310,000 acres burned, with losses estimated at $14.6 million for cattle operations; $6.7 million for fence replacement and repair; $3.5 million for livestock killed or destroyed because of the fires plus veterinary costs and the reduced value for the surviving injured animals: $2.2 million for burned facilities and corrals; $1.3 million for emergency feed; and $0.92 million for burned pastures and hay.
Peel said there also was a large hog farm impacted by the fires in Oklahoma, resulting in the loss of 6,000 sows and an unspecified number of weaning pigs, with estimated damages there reaching $2 million or more.
Kansas State University professor of agricultural economics Glynn Tonsor said it is more difficult to know now if the loss of grazing ground will impact the feed and grain markets.
"The prospects for grazing in this region have been affected and the feed and grain markets could be impacted by the local need for producers to procure external feedstuffs, but it is not likely to have a substantial impact on the national feed and grain markets," Tonsor said.
David Anderson, agriculture economist at Texas A&M agreed with Peel that the livestock losses from the wildfires will not have a significant impact on the industry. But the expense of replacing miles and miles of fencing in this region will be sizable.
"For an individual producer, the losses can be overwhelming. Ranchers may have lost animals or even all their animals. If they didn't lose animals, they might not have any grass for them to graze so you spend a lot of money to get them to some feed — buying feed or leasing other pastures. Then that rancher may have lost their fences, too. That takes about $2 per foot to rebuild. That is over $10,000 per mile," Anderson said.
Anderson added that indications are there wasn't any insurance on the grazing ground. He wasn't sure about the livestock situation, but doubted they were covered either.
"My understanding is that most of the country that burned was pastureland not cropland, which likely had no insurance on the grass growing on the pastures," he said. "There may have been some insurance on the livestock, but I do not know that those types of policies would have covered losses due to fires. There may not be any coverage available at all for those kinds of losses. Usually those are just rainfall focused."
In the meantime, farmers and organizations across the country have drummed up donations of fencing supplies, feed and other items the impacted producers need to care for their surviving animals during the recovery process and to help them rebuild, to emerge from the ashes even stronger than before. The U.S. Department of Agriculture's Farm Service Agency also has several programs to help, including providing assistance for fence rebuilding and emergency loans. ❖
— Danley-Greiner has spent more than 20 years as a journalist covering local, state and national issues important to agriculture and those dedicated to farming.