Ranchers lose hope drought aid will come in time
Monday, August 20, 2012
OMAHA, Neb. -- It's hard to tell what frustrates Todd Eggerling more -- the weather or Congress.
Searing temperatures and drought scorched Eggerling's land in southeast Nebraska, leaving little grass to feed his 100 cattle. Then Congress left for a five-week break without agreeing on aid to help ranchers through one of the worst droughts in the nation's history.
That means it will be September before Eggerling and other ranchers can even hope for disaster aid legislation that includes cash to buy feed until they would normally send their cattle to feedlots or slaughter in the fall or winter. For some, it's already too late. Out of grass and out of cash, they've sold their animals.
For others, time is rapidly running out as they try to hold on. Their decisions will affect the price and supply of meat for months, perhaps years, to come.
"I'd like to see every one of the senators and congressmen go out into one of these widespread, drought-stricken areas and spend a day," said Eggerling, 44, of Martell, Neb. "Walk around and see the effects of what's going on. Look at the local economies and see what's going to happen to them. Then they can go back to Washington with a real perspective and say, ‘Hey; we need to do something."'
Most farmers are having a hard year with drought and unusually warm temperatures in the middle of the country burning up everything from corn to cabbage. But ranchers are in a particularly precarious position because most don't have access to federally subsidized insurance programs that cover crops like corn and soybeans.
Private companies won't insure grazing land because it's too hard to predict losses, and ranchers say pilot programs tested by the U.S. Department of Agriculture are too expensive and pay out little when there's a loss, Nebraska Farm Service Agency director Dan Steinkruger said.
The White House announced last week that the federal government will buy up to $170 million worth of pork and other meat for food assistance programs in an effort to help drought-stricken farmers. The Defense Department also was expected to encourage its vendors to speed up meat purchases in an effort to prop up prices with a glut on the market expected in the next few months.
Feed prices soared amid the drought, and livestock farmers have been selling off animals for months as they run out of money. The meat is expected to hit grocery stores this fall, with prices dropping briefly and then rising early next year. Meanwhile, farmers are getting a fraction of what their animals would normally be worth at sales.
"It's not like we can hold our products -- like setting a shirt on a shelf until it sells for the price we set," said Kristen Hassebrook, a spokeswoman for the Nebraska Cattlemen, a trade group. "We can't just tell that steer or heifer to stop eating for a couple of days until the market share goes up. If we can't feed that animal, we have to sell it for whatever the price is that day."
The Obama administration also has offered low-interest emergency loans, opened federal land for grazing and distributed $30 million to get water to livestock. Farmers say they'll take what help they can get, but emergency loans come with a tangle of red tape and aren't available to everyone. Water is appreciated, but animals need to eat, and even with grazing on some federal land, hay is in short supply.
The House approved $383 million in disaster relief earlier this month, but Congress went home before the Senate acted on the bill. The Senate had previously passed a disaster aid package as part of a five-year farm bill, but GOP leaders in the House refused to bring that to a vote because many Republicans object to the nearly $80 billion included for the food stamp program.
The standoff left ranchers uncertain about what to do: Should they buy expensive feed, assuming the federal government will ultimately help them pay the bill, or should they sell their cattle at a loss, knowing they may find out later they would have been eligible for aid?
"For Congress to put this off for five weeks until they come back is really, really difficult to understand," said Michael Kelsey, executive vice president of Nebraska Cattlemen.
With no grass for grazing, Eggerling cut corn and soybeans stunted by the drought to use as cattle feed. But that will soon run out, he said, and he'll send animals he can't feed to slaughter. Because they haven't reached their full weight and he's paid by the pound, he'll take a loss.
"If I get out of this year with a $50,000 net loss, I'll be happy," he said.
It's not clear how much money individual ranchers would receive even if Congress passed the House bill upon members' return. The estimated $383 million disaster relief package would be divvied up among eligible applicants, and a number of factors would be considered in deciding awards. Some may get nothing. Others could get tens of thousands of dollars.
Eggerling said any aid will likely come too late for him. If Congress had passed a bill before the break in early August, he could have hastily made arrangements to buy hay. Two weeks further into the drought, it's almost impossible to find feed that doesn't have to be shipped from several states away at exorbitant prices, he said.
For aid to matter now, Congress also would have to open all federal conservation land for grazing or cutting hay and make sure those selling hay from federal land are doing it at cost, he said.
"Right now, it's being scalped," Eggerling said.
Rep. Leonard Boswell, a member of the House Agriculture Committee who raises cattle in drought-ravaged southern Iowa, said he understands ranchers' plight. He's been forced to use hay left over from last year to feed his 130 head of cattle this summer because the drought burned up most of the grass on his 480-acre farm just east of Lamoni.
"I'm very sensitive to having a safety net that's affordable, accessible and workable," Boswell said. "It's one of the reasons I've been very keen on getting this farm bill done, and I'm very, very disappointed that we are where we are."
But groups like the anti-tax Club for Growth continue to push conservative lawmakers to block the farm bill and aren't even sold on the House's one-time disaster relief bill.
"If it's not offset, then we would strongly consider opposing it," Club for Growth spokesman Barney Keller said. "We don't have the money to continue to deficit spend without cutting spending somewhere else."