Drought-driven selling, buying pace shows no signs of slowdown
Editor’s note: This is a follow up to a story published last week about Rugby Livestock Auction and the flood of cattle being sold.
A hectic pace of buying and selling at the Rugby Livestock Auction shows no signs it will slow down soon, according to Auction owner Cliff Mattson and buyer Kyle Shively.
Mattson said the cattle, mostly from drought-stricken Pierce County and west central North Dakota, have a mix of destinations.
“The majority of the cow-calf pairs are staying together and going to ranches,” Mattson said. “We sell pairs to ranches in North Dakota, South Dakota, Nebraska, Iowa, Oklahoma, Minnesota and pretty much all the states south of here.”
Mattson said some pairs would stay in North Dakota, where they’ll be grazed in parts of the state where the drought is less severe. “Ranchers will be able to take on a few more pairs (in other parts of North Dakota),” Mattson noted.
“Some of the cattle are actually going to feedlots and they’ll sell the cows off to slaughter and the calves will be in the background,” Mattson added.
Backgrounding is a method of feeding weaned calves before they’re sent to a feedlot for finishing.
“Since January 1, we’ve sold a total of around 49,000 head,” Mattson said of the cattle sales at the auction. “It’s unusual. The month of June, we sold just about 12,000 alone. Normally, we sell every other week in June and we’re getting a couple of hundred head of slaughter cows and the last three weeks, we’ve been selling 800 to 1,000 pairs. This is every week.”
Mattson, who has a ranch of his own, said ranchers in Pierce and McHenry Counties are feeling increasing pressure from exceptional drought conditions to market their cattle.
“Moving forward, it’s going to be tough to find a lot of feed around here without having it shipped in and paying a lot money for it,” Mattson said. “So, a lot of people are thinking ahead and selling off part of their herds so they can maintain and get enough hay to hopefully hang onto the stock they’ve got.”
“A lot of these guys have put years and years of breeding and genetics to get that cattle herd they want built up and now it’s unfortunate they have to sell out because Mother Nature’s not cooperating,” Mattson added.
Mattson said he anticipates a “huge” impact on the cattle industry from the drought.
“Right now, we’re extremely busy, but this fall, with all the cattle that are leaving the area, it’s going to take a long time to get those numbers back up and when we do get those numbers back up, it’s going to be really expensive,” Mattson said.
“It’s not going to happen overnight, but the kind of impact it will have is going to be huge. It’s going to be huge to the sale barn; it’s going to be huge to the local economy. A lot of these small towns rely on the ag business to keep them going and you take two thirds or even half of the cattle out of the area, that’s going to play a huge role on all these small towns that rely on that for business,” he explained. “They’ll sell less products, people are going to move. Anything involved with ag, it’s going to hurt.”
Shively, a buyer for the auction who ranches near Pleasant Lake in Pierce County, agreed.
“You look at the amount of people that sale barn brings from way outside of our area – they’re coming to eat at our restaurants and shopping at our convenience stores or Home of Economy and places like that – it’s going to hurt substantially,” Shively said.
Mattson and Shively said the short-term glut of cattle on the market would mean problems for ranchers and rural economies.
“They’ve been getting decent prices for their pairs, but if all of a sudden a whole bunch more people have to start selling and the whole state stays dry, then that market could get saturated and who knows what’ll happen then,” Mattson said. “(Prices) might get cheaper.”
“Overall prices look pretty good for the feeder calves,” Mattson said of young cattle ready for fattening.
Mattson, who’s owned the Rugby Livestock Auction for less than a year, not only feels the pinch caused by the drought; he witnesses how younger ranchers struggle as well.
“It’s pretty awesome when these young guys bring their cattle to us and they do well and we’re excited for them for how they do. But now, it’s just taken away from them,” Mattson said. “It’s not any fun right now for anybody.”
Mattson divides his seven-day workweeks between his ranch near Rolette and Rugby Livestock Auction. In a year with normal rainfall, he said he and his family would spend less time in the barn and more time haying. Sales at the auction normally happen every other week in summer.
This year’s turn of events has meant weekly auctions and hard choices for the summer.
Mattson said he’s met with sellers who’ve asked him to choose which of their cattle to auction. Others “drop them off and go. They don’t want to stay for the sale. Ranchers love their animals so much that they don’t want to part with them. Unless you’re a rancher, it’s hard to explain. It’s a passion.”
Mattson and Shively said they help ranchers get the best prices for their livestock and hope to stave off any price drops.
“We know it’s going to be an uphill battle,” Mattson said.
Cheaper prices for some cattle won’t translate into cheaper beef prices at the grocery store, Mattson explained.
“The packers control so much of the prices. The prices in stores will go up, but unfortunately, the ranchers don’t get paid their share of it. The packers will get most of it,” Mattson said. “Because the packers will get more money, the stores will have to pay more for beef and the price of beef in the stores could go up, but that doesn’t mean the ranchers are going to get paid for it, because they never do.”
Mattson and Shively said ranchers from North Dakota and the rest of the United States have seen their profit margins shrink due to changes in the meat packing industry in recent years.
Shively said multinational companies from Brazil and other nations now dominate the meat packing industry, putting cheap beef into the food supply. This complicates the picture for American ranchers and cattle buyers.
Much of the foreign meat is of lower quality than American beef, Shively said.
“I’m all for playing fair and everybody making a profit. But what has gone on in the past five years is complete greed,” Shively said.
Adding the drought to the picture might cause small producers and buyers in central North Dakota to drop out of the business and send even more profit to large, multi-national corporations, according to Shively.
And when more people in the beef industry leave, communities like Rugby and Towner will feel the effects, Shively cautioned.
“The consumers think the farmers or ranchers are just crying but at the end of the day, we’re hurting bad right now, absolutely,” Shively said. “This fall or next year, you guys will be hurting. You’ll be having the effects of the drought hit you and the businesses in Rugby,” Shively added. “It’s the trickle-down effect but this drought is going to hurt everybody at the end of the day. Your food cost will be increased without a doubt. The crops aren’t out there.”
“Whether they need to or not, they’re going to use that as an excuse to increase your food costs,” Shively said of the large meat packers.
“Some of us in the cattle industry in the last three to four to five years have lost money and yet you guys have had to pay more,” Shively said. “You guys should be as upset with the (meat processing industry) as we are.”
“That’s where our bread and butter comes from, these cows,” Shively added. And we’re selling them off at an alarming rate.”
Shively said he attended a town hall meeting in Minot with Sen. John Hoeven in late June “to try and get some information and try to help out any way I can to make it easier on some of these guys on what they’re going through and trying to keep the price up.”
“It’s a bad deal that you’re having to sell off but we need to get the most amount of money that we can from these cattle to really benefit our ranchers and help them the most so we can try to get them back in the business where they were, whether it’s four or five years down the road or sooner,” Shively added.
“Even if a producer had 20 head total, we don’t want to see them get out of the business because they’re one of our customers,” Shively said of small cattle producers. “Whether they have 20 head or 500 head, every one of them means the same to Rugby Livestock. It means the same to me or Cliff (Mattson) or any one of us. We need them all.”
“We’ve lost enough ranchers in the last 15-20 years,” Shively said. “We can’t afford to lose any more. Because at the end of the day, we’re losing our rural communities more each day.”
Shively urged residents of Rugby and small agricultural communities to thank their ranchers and farmers, whose stress levels are soaring.
“Try to help out any way you can,” Shively said, adding, “Well, there really is no way to help out on this deal, but there’s a lot of stress on a rancher’s back right now, so check in with them and give them a hello. I think a lot of that would go a long way.”
“It’ll make them feel good for a few minutes anyway,” he added.
Shively said Rugby Livestock’s buyers and staff do what they can to help ranchers in need.
“I went down to Powers Lake to help a guy out and round up his cows,” Shively said. “He was 65 years old and didn’t have anyone to help him do it.”
“But that’s what America’s about,” Shively added. “It’s not just in the Ag industry; it’s what everyone should be doing.”
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