Drought driving increased traffic to Texas cattle auctions

Several hundred head of cattle filled the pens Wednesday at the Lampasas Cattle Auction yard. 

Inside, owner Andy Baumeister kept a fast pace, moving through bids with the quick cadence of an auctioneer. The sell off underway has a familiar ring; back to what happened during the drought of 2011.

"We have been steady since the first of May running two to three times than what we would normally run," said Baumeister.

It hasn’t let up. On July 20th the Lampasas auction moved more than 1000 head of cattle. A week later 881. Wednesday, 721 cows moved through the pens. The current numbers are big considering a year ago less than 400 sales took place on an auction day. 

Rancher Joe Vann told FOX 7 he followed his fathers advice and was among the first this season to start cutting back.

"He always told us if it doesn’t rain by June 1st we are in trouble. And we saw this coming along, and we made [the] decision and sold half of our herd during the month of June," said Vann.

The national inventory of cattle is currently down 2% according to a recent report by The US Department of Agriculture. The high cost of hay and feed, due to the drought, along with other inflationary factors like fuel costs are to blame.

"This is a point in time in the hay business and the grain business you can nearly name your price, and that’s what we are running into. We are buying hay, we would never feed, for $80 a bale, and that hay is usually put on the ground and plowed in," said Vann.

At the auction in Lampasas, winning bids for 1000 pound cows are currently ranging between $350 to $650. One of the top bids was for a 2,040-pound Bull that sold for 90-cents a pound making the sale price $1,836. Another high price was for a 1,830 lbs Heifer that sold for $1,372. 

"It’s going to get crazy. Cow prices are going to be just outrageous, but we’ve got to have some rain before that happens," said Baumeister. 

The big sell off in 2011 didn’t create a big price break at the grocery store for Beef. Analyst and government agencies say you should not expect one now.

Earlier this year, the USDA estimated food prices in 2022 to increase between 10% and 11%. The consumer price index for beef rose 17.6% according to the Bureau of Labor Statistics.

"You know you bring your calf over there to sell him, a dollar and a half a pound, go to the store and buy it and it’s $12-$13 a pound there. I don’t know what’s going to [happen], we’re in the wrong end of the business, the rancher is," said rancher James Hardin.

The cattle sell off is expected to taper off because herds are smaller. That is why the rebound after the rain comes is expected to be slower than what happened after 2011. Some of those at the Lampasas auction, like Joe Vann, are buying for the future. 

"One of the things you can do to combat the situation is buy young cattle, and whenever they are bred, they have their first kid nine months from now. So we’re looking at possibly next spring Calfers and if this weather breaks and it starts raining, they’ll be worth a fortunate," said Vann.

The economic impact from the current drought has yet to be calculated. State Agriculture officials say livestock losses from the 2011 drought and sell off were estimated at just over $3 billion.