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The U.S. Department of Agriculture predicts cattle prices will rise 20 percent this year over last year. But the price of a bushel of corn has more than doubled in the past year, to nearly $8. You might think that would tempt plenty of farmers to flip their acres from cattle pasture to cropland.
But as Harvest Public Media's Clay Masters reports, it's a tough decision that depends on far more than this year's prices.
CLAY MASTERS: In agriculture it's called flex acres, land that could be planted for cattle grazing pastures or row crops like corn and soybeans.
Ed Morse has land like that just outside of Council Bluffs, Iowa.
(Soundbite of a vehicle)
MASTERS: Wearing green coveralls and a tan hat, Morse stands outside his cattle barn watching his 17-year-old son Noah drive a feed wagon down a row of cattle. The cattle feast on corn and hay.
(Soundbite of a cow)
MASTERS: This 320-acre farm is going to see some land changes soon. But with record high corn prices, it's not the direction you'd expect it to go. Ed Morse is taking acres out of corn and soybean and putting it into pasture.
Mr. ED MORSE (Farmer): With the cattle you're more on your own. You don't have those insurance policies on those cattle. You hope that you don't have problems with them, et cetera. And, you know, it's in some ways an act of faith because you've got to look out into the future a couple years and see that this will be a paying proposition, as well.
MASTERS: Morse is used to analyzing figures. He's also a law professor at nearby Creighton University in Omaha. He admits it's tempting to switch to corn but says he'll stick to cows for now.
But that's an unusual decision, according to ag economist Darrell Mark with the University of Nebraska-Lincoln.
Mr. DARRELL MARK (Economist, University of Nebraska-Lincoln): It appears like, especially in key cornbelt states like Iowa and Illinois and, I think, eastern Nebraska, eastern South Dakota and parts of Minnesota are included in that, too, that we'd seen a reduction in the number of cow/calf operations, the number of cow/calf pairs in those states. And correspondingly, we're seeing an increase in the total number of acres being planted to row crops.
MASTERS: In central Missouri's Calloway County, farm owner Margot McMillen was offered three times the rent to convert some of her pasture land into row crops. But she turned down the offer. She says as a farmer, it's important to know what your long-term plans are for your operation and not make knee-jerk decisions based on what commodity is hot.
Ms. MARGOT McMILLEN (Farmer): It's almost like the gamble. You make the decision because of what your neighbors are doing, what you hear, you know, sort of the buzz. And you really can do better if you become independent and think on your terms, what's going to work for me.
MASTERS: The last three years have seen historically low cattle numbers. Combined with increasing worldwide demand, that's led to some of the highest cattle prices ever seen. Thirty-eight-year-old Sean McClatchey sees this as an opportunity. He grew up near the southwestern Nebraska town of Palisade but lives four hours to the east in Lincoln.
Mr. SEAN McCLATCHEY (Farmer): You got to grow it to make it work. You know, it's not like maybe it was 30, 40 years ago, where a farm the size of ours could support a family or two.
MASTERS: McClatchey's parents got rid of cattle when he was a boy. He now has 115 head and is slowly increasing his herd size. He's getting creative with his wheat crop this spring in order to save on input costs like feed and fuel. He'll graze on the wheat fields early in the growing season in a way that will still allow the wheat to be harvested.
Mr. McCLATCHEY: You're getting essentially more than one harvest per year off that ground. You know, you can feed - you can graze cattle in the fall, if you get it drilled in time and get some moisture and get the weed up. And then in the spring, when it warms up, you can graze them for, I don't know, 30 days maybe.
MASTERS: And keeping feed on the farm is one way to keep costs down. But it'll likely be a while before herd sizes increase from their lowest point since the 1950s. It takes a minimum of 14 months for cattle to move from birth to market.
While ag economist Darrell Mark predicts herd sizes will increase later this year, he doesn't expect it to drive down costs at the meat counter for quite a while. Meanwhile, farmers like Morse and McClatchey will try to figure out just where the profit tipping point will be.
For NPR News, I'm Clay Masters.
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