Report: Hay and pasture land losses could hit $100 million

The economic impact of the summer-long drought could approach $100 million in losses when it comes to hay and pasture field forage losses, according to a report by the Fryar Risk Management Center of Excellence. At least 20 counties in the state have been designated as disaster areas due to drought, according to the U.S. Department of Agriculture.

About 75% of hay and other pasture fields in Arkansas are deemed in poor or very poor condition, the USDA’s Crop Progress report in August indicated. Arkansas livestock farmers use pasture lands to feed their animals during the spring, summer and fall. Many cut hay to feed their livestock during the winter.

“Based on the 2017 U.S. Agriculture Census, Arkansas has 3.189 million acres of permanent pasture land. Assuming changes in acreage between 2017 and 2022 are negligible, 3.189 million acres is the basis for valuing forage production intended for grazing. The 2022 USDARMA county base value of forage production for grazing is $54.51/acre in Arkansas. This implies the total value of grazing acreage in Arkansas is $174 million,” the Fryar report states.

There are an estimated 1.18 million hay acres in the state. An acre produces about two tons of hay and it sells for $153 per ton. This means Arkansas has a total hay value of $365 million, the report states.

“Drought impacts hay yield and the number of cuttings producers get from their fields. It’s difficult to determine how the drought impacted hay yield separately. Combined, we estimate that the drought reduced hay production by 20%. Multiplying hay production losses by the estimated value of hay production results in an estimated loss of $73 million,” the report states.

The total estimated loss for pasture/hay field production is estimated to be $97 million. Livestock producers have dramatically reduced their herds as profitability collapsed.

“This summer, with drought-stressed pastures, Arkansas livestock producers had to make tough decisions about their herds. Producers had to decide whether to start feeding hay, depleting winter hay stocks, or selling off part of or the entire herd. Specifically, for Arkansas cattle producers, there is some evidence of larger volumes of cull cows and bulls coming to market. For the first thirty weeks of 2022, cull cow and bull volumes at Arkansas auctions are averaging 20% higher than in 2021,” the report noted.

The impacts will go far beyond just this summer. Hay prices are projected to stay around $153 per ton, while corn prices are projected to top $6.65 per bushel during the 2022/2023 season, the USDA projects. The number of replacement heifers, ones that produce beef calves, is at its lowest level since the USDA began tracking them in 1973, meaning this cycle could continue for years.

The impact of smaller herds and higher input costs will lead to higher consumer prices in the long run, AgriLife Today reported. At the start of the year, the U.S. cattle herd numbers were a little over 30 million head, down 2%, and that was before the summer drought that stretched across large swaths of the South including the nation’s highest cattle producing state, Texas.

Rain has returned to many parts of Arkansas in recent weeks, but it will take a sustained period of consistent precipitation to regenerate damaged fields. The heart of the state’s cattle production areas, mainly in the Ozark Mountain regions that extend from Northwest and Northern Arkansas down to the state’s center, are still classified as in severe drought, according to the U.S. Drought Monitor. Several counties on or near the Missouri border are classified as in extreme drought.

The rest of the state is classified as in a moderate drought or abdominally dry. There are several counties in Northeast Arkansas including Craighead County that are classified as normal, along with counties that border Louisiana.