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Cattle have been streaming into auction yards across the country in recent weeks as grazing land burns up in the sun, ponds and streams evaporate and prices for feed corn rise. In Oklahoma City, the number of cattle going to auction quadrupled in one week earlier this month, and in Kearney, Neb., it increased three-fold. In Texas, some 36,000 cattle were brought to auctions last week -- nearly triple the 13,400 animals sold just a couple of weeks earlier and approaching the 43,600 head sold at the same time during last summer's brutal drought, according to the USDA. Calf prices are falling with so many animals on the market. A 600-pound calf now fetches $120 less than it brought in just a couple of months ago. Prices for feeder cattle, which are typically fed grass before going to feedlots to be fattened on corn, have collapsed as corn prices have gone up. Feedlots are spending about $200 more per cow on corn than they were just months ago. Beef prices were already falling after rising 10 percent last year amid the drought in the Southwest. They peaked at an average of $5.09 per pound in January, and then came down to about $4.93 per pound in June. They are expected to increase again, but it's not clear by how much. The USDA had predicted a 2.5 to 3.5 percent increase in beef prices for the year, but that was before the drought spread and cattle selloffs mounted. Jon Ferguson, 63, has weaned calves earlier and sold some cows about a month earlier than usual to save pasture on his ranch near Kensington, Kan. He has about 450 pairs of cows and calves and nearly 1,200 other calves that he buys each year to fatten on grass before shipping them to a feedlot. He shipped a third of his cattle from Kansas to Colorado to graze during a drought in the summer of 1989. He's not sure whether that option will be available this year, or whether he should just liquidate and cut his costs now. "If you can figure out a way to hang on to them at a reasonable cost until the drought is over, it typically pays you pretty well," Ferguson said. But, he added, "If this thing persists through the summer, and we see these kinds of temperatures with no significant moisture relief, we will be in trouble by fall."
[Associated
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