If there is a single word to describe the experience of Montana cattle ranchers in 2012, it would have to be “volatile.”

Prices for feeder cattle, those that have been weaned from their mothers and ready to be sent to a feedlot for finishing, climbed to historic highs in late winter, topping out at $164.40/cwt. at the end of February. Then the USDA began issuing predictions that drought in the Midwest would result in a poor corn crop. Prices for cattle dropped as corn prices rose.

By mid-July, Montana ranchers could expect to get $180 less for the same 600-lb. steers than they could have received five months earlier. Drought in the southern half of the state drove up hay prices as well. Toward the end of August, some growers were asking as much as $200/ton for the first cut of alfalfa hay, which tends to be the highest-quality crop of a two-cut season. Low cattle prices and expensive hay led some Montana ranchers to question whether liquidating their herd and rebuilding again when things looked better might not be the best option.

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