Drought Management and Market Impacts Growing

The management and market impacts of drought in Oklahoma are intensifying rapidly. The situation in Oklahoma is becoming a bit more regional in nature as much of the eastern one-third of Oklahoma has received some very timely moisture in the past few days. Though these rains do not eliminate drought concerns in that region, they provide some immediate relief and significantly expand management options for producers. However, the western two-thirds of Oklahoma remain exceptionally dry and management options are increasingly limited.

Significant direct market impacts of the drought are not apparent at this time. Though most cattle prices decreased slightly the past week, it is most likely due to seasonal and broader market impacts than due to drought. Oklahoma auction volumes for cows and bulls are up roughly 22 percent for the year to date, as is beef cow slaughter in the southern plains (up 11 percent in Region 6, which includes Oklahoma and Texas) but it is likely that most of that is due to high prices more than the result of drought forced movement. However, the impending drought impacts may be part of these cow marketing decisions, at least indirectly. While the market impacts of drought may not very significant yet, the impacts could increase dramatically, especially for cow prices, if the drought continues to worsen over the next 30-60 days.

The management impacts, in contrast to the market impacts, are very immediate and severe already. In many cases, lack of water is as much of a limitation as lack of forage and producers face several unpleasant choices very soon. Several resources are available to assist producers in drought related management at the OSU drought website at http://agwater.okstate.edu/research-extension/drought/drought. Resources are available that relate to a variety of topics including:

– General drought management considerations

– Financial planning to survive drought

– Tax implications of drought

– Cattle management during drought

– Feed, pasture and water management during drought

Producers are reminded that drought impacts should be well documented to maintain eligibility for government disaster programs and for possible tax consequences. Documentation should include all drought related impacts such as:

– feed purchases to maintain livestock

– lost grazing or hay production

– unplanned cattle sales due to drought

– costs associated with relocating and temporary care of livestock

– local weather and rainfall records

– photos of poor forage conditions, dried up ponds, etc may help

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist


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