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‘The factory burned down’: Economic losses from blizzard are catastrophic, but cattle prices at auction are high

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news Dickinson, 58602
Dickinson North Dakota 1815 1st Street West 58602

By Mikkel Pates

PHILIP, S.D. — Nobody knows how many cattle may have died because of the storm that gripped much of the western third of South Dakota for three days. They may never know.

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The financial toll will be just as hard to gauge.

Older producers will likely have the financial strength to recover. Younger ones that had been borrowing money to get into the business may be done.

South Dakota state veterinarian Dustin Oedekoven estimated that the number is between 15,000 and 30,000 statewide, adding that it will climb.

Educated estimates range from 20,000 to 30,000 and up to 100,000 or more, says State Sen. Gary Cammack, R-Union Center, who ranches and runs Cammack Livestock Supply at Union Center.

Stories of the deepest areas of snow north and east of the Black Hills often involved high-profile places such as Deadwood. But the bulk of the cattle damage happened in places such as Haakon and Butte counties — out on the plains, where most of the cattle are.

Ranchers are often rugged individualists who find it easier to absorb losses than discuss them. Bringing cattle into protected, winter pastures is standard operating procedure. Losses are wildly erratic and inexplicable. Some would lose nearly everything, and others next door might lose few.

Cattle’s big impact

“I don’t know how many we’ve lost — nobody knows, with confidence,” Cammack says. Some say losses are in the tens of thousands. Some will guess 100,000. Somewhere in the middle is the truth. I’m guessing it’s 20,000 to 30,000.”

From an economic standpoint, if each was a cow-calf pair, a typical value might be $1,500 to $2,000, depending on how you count it. If the total turned out to be 100,000, that’d be a total of about $150 million to $200 million. If the losses are closer to 30,000 animals, the impact might be $45 million.

But that doesn’t fully count the future financial impact.

For individual producers, the hidden loss is the 2014 calf crop, and replacement animals for the herd.

“That’s absolutely huge; the factory just burned down,” Cammack says.

Catastrophic loss, high sale prices

Dan Piroutek has auctioneered at Philip Livestock Auction for 35 years, and also works sales at Belle Fourche and Faith. Most of the cattle at the sale barn come to Philip from the west.

Piroutek says the hardest-hit area might be from Sturgis to the village of Howes. He said maybe 60,000 to 80,000 might be dead. He expects the real figure to be twice what is officially reported “unless they come up with an indemnity where everybody turns in their losses.”

Two sales in Philip since the blizzard have had outstanding prices.

“I think we have more buyers here today than we have sellers,” Piroutek said, taking a break from the Oct. 15 sale. “That’s almost unheard of. We would have had record prices today if all of our cattle came in.”

The outstanding demand is because people are optimistic about the cattle business despite the losses.

He says there are individuals who have lost 400 head. The numbers are outstanding, but also the sheer value. Many were cows that were pregnant. The cow could be worth $1,700 to $2,400, depending on what she is. The calf might be worth $1,100. Ranchers have all of their expenses in the animals, so they need the calf check.

“It’s catastrophic, the amount that’s lost,” Piroutek says. He says he hopes there is some federal indemnity, and that there won’t be “too small a limit on it” so it offers real help. Ranchers are in good shape financially, but younger people have a “major, major catastrophe.”

The ranchers gather in the auction café in Philip, prior to the sale and conversation now centers around the state of area ranchers and their operations after the blizzard. Keith Smith of Quinn says he lost about 15 percent of his cows — 64 cows and 39 calves. In one case, he helped collect 1,400 stragglers that were sorted by ear tags for eight different owners.

“Nine four-wheelers showed up, and I thought that was pretty good to get them sorted in one day,” by ear tag and cattle type.

“People are embarrassed to say what they lost,” Smith says. “And they’re independent. They don’t think it’s anybody else’s business.” He did his best with photographing ear tags and carcasses, but it’s going to be difficult for everyone to verify losses. “All you do is say what you’ve got left,” he says.

Reverse engineering

A lot of forensic analysis is centered around how losses were so high. Cattle in the region were in some of the best shape they’ve been in for several years, as a result of a good summer with good-quality grass. Some veterinarians in the area have determined there is water in the lungs of cattle, probably from “breathing in” moisture-laden snow.

Cammack says it was the older animals, the ones that might be expected to be the strongest, that appear to have had the biggest losses. He theorizes that perhaps the calves weren’t able to walk as far in the deepest snow, or perhaps they were able to nurse and get some nourishment, which drew down the cows’ strength, as well. Calves also are protected in a way, because they tend to walk on the downwind side of the cows.

Cammack thinks the cattle didn’t freeze, but probably died from hypothermia and exhaustion, which is different. It’s like a human dying from the same problem — exposure to wet cold, and the inability to eat and generate heat.

Horses and sheep

The storm also killed horses — sometimes entire herds of young horses — and some sheep.

Chancy Wilson, who with his parents Ronnie and Brenda, and three brothers operate Wilson Rodeo Co., headquartered near Kyle, S.D., said his family lost some 50 to 60 horses. “Every day a snowdrift disappears and you find a few more,” Chancy said, nearly two weeks after the snow.

The deaths are a small part of their overall operation, which includes hundreds of horses, but it’s a kick. “They were right in the corrals,” Ronnie says. “We had windbreaks and everything. From what I can understand, they must have been so wet, with so much moisture, they must have just drowned.

“We damn-near lost every colt on the place,” Chancy says. Twenty-two recently weaned colts died in the corrals. It’s hard to put a value on rodeo stock. The ranch tries to develop them into performers, some of which become extremely valuable. Quarterhorses and other horses died out in the pastures and got caught in the fence lines.

“A lot of them you can’t get to, it’s been raining and snowing so hard” since the storm.

Dion Van Well, one of the region’s largest sheep aggregators and producers from Watertown, had a flock of about 800 sheep in the Faith area and had nearly no losses.

“I was shocked, really shocked,” Van Well said. “The only thing I can think of is that they have some wool, while cattle don’t have their winter coats this early in the year.”

Chris Veal of Bison, said he lost 200 sheep. The bulk died in a feedlot, and most from asphyxiation as they climbed on each other or were covered by snow.

Ranchers had poor hay crops in the 2012 drought, a very good hay crop in 2013 with the return of moisture, but now have their cattle herds impacted by the storm. People were in the process of trying to rebuild.

“You think you held back replacement heifers, to replace the ones you culled (because of drought) and now you’ve got a bigger hole than before,” Cammack said.

4-year impact

Piroutek remembers the 1966 blizzard, a three-day March blizzard. “That killed a lot of cattle but nothing comparable to this. It’s so devastating to a lot of people because they were going to get a record price for their calves. A lot were scheduled to sell last week, this week,” he says.

There will be no pay day for those animals, no future, and no revenue for auction companies and others. Piroutek says that — with tax laws — farmers tend to invest their money in their operations, so the economic “multiplier effect” is higher than in most enterprises. The money turns over in the economy several times.

Glen Haines, the mayor of Faith, a town of 450 people, also operates a livestock trucking business with a son. He says the impact will be big on businesses such as the feed store and lumber yard.

“This city relies a lot on sales tax dollars,” he says. “It’s going to hurt.” He says it’s not just one year, but a three- or four-year impact.

Farm bill is best medicine

Haines hopes there might be a federal farm bill and that there might be some kind of Livestock Indemnity Program, but that will take time with the Congressional impasses over the farm bill. Often these programs pay up to 60 percent, with a maximum of $100,000 per producer, but the Livestock Indemnity Program has expired.

“You’d hope there’s something for these poor cattle people,” he says. “There’s other programs out there” for crops.

“One issue hampering the information is the federal government shutdown that has shuttered the Farm Service Agency and other federal offices,” Cammack says.

Congress voted Oct. 16 to end the shutdown, sending FSA and Risk Management Agency employees back to work. Farm bill negotiations are expected to begin the week of Oct. 28.

Dennis Todey, South Dakota’s climatologist at South Dakota State University, has spent a good portion of the time since the initial storm in information sessions with state and county officials. In the absence of federal officials, the state was coordinating livestock hotlines, getting volunteers coordinated with ranchers to help pick up animals.

Cammack, a former county commissioner before running for the legislature, says county and state governments have few tools to help farmers, and are distracted by storm-related infrastructure needs. Meade County is providing some assistance to help with carcass disposal. Pennington County had dug pits to accommodate cattle that were lost on county rights-of-way. The pit south of Quinn had about 150 cows in it on Oct. 15.

“The best help to get these guys going again is on the federal side with a new farm program,” Cammack says. “The Livestock Indemnity Program doesn’t exist, but they’re working to make it work, retroactively, in language passed in both the House and the Senate (farm bills).” Documentation of losses is going to be important, especially now that the shutdown has ended.

The FSA and other U.S. Department of Agriculture agencies make up the emergency committees that normally tally losses in cases like this.

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