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Drought and Post-Drought Tools and Educational Programs for Beef Producers (and Their Lenders)

Drought and Post-Drought Tools and Educational Programs for Beef Producers (and Their Lenders). Damona Doye Sarkeys Distinguished Professor and Regents Professor, Oklahoma State University Roger Sahs Extension Assistant, Oklahoma State University Larry Falconer

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Drought and Post-Drought Tools and Educational Programs for Beef Producers (and Their Lenders)

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  1. Drought and Post-Drought Tools and Educational Programs for Beef Producers (and Their Lenders) Damona Doye Sarkeys Distinguished Professor and Regents Professor, Oklahoma State University Roger Sahs Extension Assistant, Oklahoma State University Larry Falconer Professor,Texas AgriLife Extension Service

  2. 2011: A Record Breaking Year • Minimum temperature: -31°F, Nowata, 2/10/11 • Number of days with temperature 100°F or higher: 101 days, Grandfield • Warmest summer(June-August): 86.9°F, Statewide average • 24-hour snowfall: 27 inches, Spavinaw, 11 PM , 2/8/11 to 11 PM 2/9/11 • Wind gust: 151 mph, El Reno, 5/24/11 • Hail stone diameter: 6.0 inches, 2 miles north of Gotebo, 5/23/11 • Lowest annual total precipitation: 6.2 inches, Hooker

  3. What Has Been Done • 2011producer meetings • Drought management strategies • Decision support tools • Evaluation of drought impact • Extension educator training • Reinvesting in the beef industry • Lender workshops • 2012 producer meetings

  4. 2011 Producer Meetings Numerous meetings around the state…. • Feeding/hay strategies • Pasture management • Hay issues: nitrates, prussic acid and aflatoxin • Livestock water quality • Culling strategies • Potential economic outcomes associated with choices, including tax repercussions

  5. Decision Support Tools • IFMAPS (Intensive Financial Management and Planning Support) • Beefextension.com, Cow/calf, Calculators • Early weaning decision aid • Repurchase decision tool • Sell cows now or later • Cow bid price estimate calculator • Enterprise budget software

  6. Sell Cows Now or Later? Factors to consider: • Cost per day if I keep the cow • Current sale value of the cow • How long will the difficult environmental conditions last • Cost of replacement in the future • Time value of money • Tax issues

  7. Repurchase Decision Tool Assumes 5% time value of money Example: Your maintenance cost per day is $3 and you think May 1 is a reasonable repurchase target date. If you think the sell–buyback spread will be less than $851, you should sell and buyback.

  8. Sell Now or Later screen capture

  9. Evaluation of Drought Impact

  10. Extension Educator Training • Eastern and Western OK • Market outlook • Reinvesting in the beef herd • Rebuild slowly using stockers • Rebuild fast buying cow/calf pairs • Rebuild with leased cows • Risk management tools • Farm transition program options

  11. Lender Workshops 6 sessions around the state addressing: • Market outlook • Reinvesting in the beef industry • Risk management tools • Farm Service Agency guaranteed loan options • Bank examiner perspective

  12. 2012 Producer Meetings • Market outlook • Reinvesting in the beef industry • Tax choices • Pasture recovery management

  13. What Can You Afford to Pay for a Cow? www.beefextension.com under Cow-calf, Calculators, Cow Bid Price Estimate Calculator

  14. What’s Next? • SAEA symposia may lead to Choices article • Choicesmagazine.org • Work on NCFMEC livestock leasing publication • Work on additional software tools • Forage • More producer meetings… • Livestock leasing • Quicken for farm financial records • Farm transitions

  15. What’s Next? Rain, we hope!

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