Connections, Supply lines, weather and pandemics
November 14, 2021
Something that I wasn't really aware of until I moved to the farm in 2008 is how closely the weather affects our production. Living in a city the only thing the weather impacted was getting to work or if the AC worked. Up here when there was drought across the Midwest this summer in the Dakotas and Minnesota as well as Wisconsin for a short time, this affected not only animal feed crops such as soy and corn but also grass. The heat and dry reduced the hay crops by almost half according to our usual supplier from Minnesota. This in turn makes the cost of the hay and feed to rise, in this season almost double its usual rate.
Because Wisconsin came out of the drought earlly enough in the summer that they were able to get a decent 2nd crop of hay, buyers in Minnesota and the Dakotas are looking here for their feed and are willing to pay the higher price in Wisconsin for it. Due to the high cost many farmers, ourselves included, are opting to sell their animals rather than pay extraordinary prices for hay to feed them over the winter. Because of the flood of animals on the market this makes the price per lb very low so that the farmer is not getting reimbursed for what he paid to raise the animal.
In our case we are freezing the meat and selling it at our regular rates so we escaped that particular distress. Other grass farmers who supply us are still paid over market rate for selling to us so they are ok as well. On top of that of course is the whole supply chain breakdown due to the pandemic. This caused a lack of people to do some of the jobs required to keep the whole thing running, the lack of parts that are buried in containers in ships in Long Beach and New York/NY and lack of drivers to truck anything that does emerge from the congested ports.
We are going to keep our prices as stable as possible for as long as possible. I do know that sooner or later we will also be affected by the rising price of everything. Hay this year is about 3 cents per pound higher than it was last year. Since a cow eats about 30 pounds of hay per day for about 150-180 days per year, that adds up fast. Even if the high hay price affects only ourselves or some of our farmers, somebody will need more money in order to keep supplying Grass Fed Beef.
Same is definitely true with Pork and Chicken. Even pastured pigs and chickens eat a good bit of grain. Neither pigs nor chickens are straight up herbivores like a cow is. I think the corn and soybean harvest is good this year but the wheat harvest is not so good. The upshot is that I don’t know what is going to happen with feed prices in the coming year. I do know that feed prices in 2021 were definitely higher than in 2020.