Ranchers struggle to stay in business
by LESTER MURRAY news2@kilgorenewsherald.com

Gasoline prices are poking a hole in household and business budgets across the country. But for cattle raisers in East Texasand elsewhere, the problem is significant.

Bill Hale, Rusk County Commissioner and a family cattle rancher for 150 years, said increasing costs for energy and associated products could put a lot of ranchers out of business.

Cattle need food - commonly that's hay - and raising nutritious hay requires fertilized soil.

"A common mix is 21-7-14 for hay fields," said Hale. "This simply means 21 parts nitrogen, seven parts phosphorus and 14 parts potash."

The problem, Hale said, is the rising cost of fertilizer.

"One year ago this type of fertilizer sold for $382 a ton. This year the price has already soared to $515 a ton and I have been told by the distributor there will be another increase next month," said Hale.

Hay, like any food fed to cattle or any livestock, must provide nutrients the animal needs. "Last year the hay crop was plentiful, but the hay was not very good, a lot was low in nutrients so a supplement had to be given to the livestock which increases cost more," said Hale.

Hale said it take 400 pounds of fertilizer per acre. At today's prices a round bale of hay costs about $50 to produce and then another $20 to bale.

"With these numbers, the cost of a round bale of hay is approximately $60 per bale and to make a profit on hay you raise to sell, the rancher would have to sell this bale for at least $70 a bale which you just can't do," said Hale.

Unfortunately the input costs are not translating over to the selling costs when it is time to take the beef to market said Hale.

"Most ranchers are just hoping to break even under our current conditions, hoping things will be better next year. But if the input costs keep going up, I believe a lot of small ranchers will go out of business," said Hale.

Hale's ranch produces its own hay on 200 acres and another 1600 acres are devoted to cattle. "It takes a lot of acres to run cattle. One cow needs five acres of pasture to feed," said Hale. "The most cattle I have at one time is 300 head."

He said the way he also keeps costs down is that his ranch is family run. "I couldn't afford to hire outside help," said Hale. "Most ranchers these days also work a regular job to keep things going."

Hale's ranch is one of the largest in East Texas. "In East Texas I am considered a large ranch, but if I were in West Texas I would be considered small to medium."

The Hale ranch was started in 1856 and Bill took over from his father, Louis Hale. "Some ranchers are selling off their land and getting out of the business, but that will never happen to the Hale ranch while I am alive."

Hale said he puts away the square bales of hay to sell, which usually go for about $6 per bail. With increased costs he expects those prices to rise about $9 per bale, providing the hay crop is good.

Another concern for ranchers and farmers is the Texas Legislature, according to Hale.

"When the law was written about highway and off-road fuels it was meant to give farmers a break when working their land," said Hale. "Large farms such as mine or even bigger ones requires owners to drive great distances to check on or feed livestock, which requires a lot of driving."

Hale said the difference in the cost of farm diesel is about 43 cents per gallon, which makes a difference when someone is driving a lot. "I have land 40 miles from my home and I have to drive there sometimes three and four times a week. But because my truck goes on the highway I don't get the break, which translates to all farmers who should get this exemption."

Hale said he wants to be optimistic about the future in ranching and hopes that he will be able to survive until the demand outpaces the supply.

"With ranchers going out of business and cattle numbers not being available at the market the way they have been, this will push the cost of beef up, which will help outweigh the input costs," said Hale. "But until then, I, like others, am just trying to hang on."

Bob Young, instructor at the Kilgore College Ag Farm said his budget for fuel and fertilizer just keeps going up. "We have a 440-acre ranch. We raise our own hay and livestock," said Young.

Young said he isconsidering liquid fertilizer which can supplement regular fertilizer and bring the cost of fertilizer down per acre.

Brian Free, manager at Atwood's Farm and Ranch Supply in Kilgore, said his store sells fertilizer by the bag.

"We are not seeing any great increase in prices at this time, but Atwood's buys six months in advance so if prices go up it would show up next year," said Free.