Cattle ranchers deal with weather and market forces


Issue Date: February 11, 2009
Ching Lee

Cattle ranchers throughout the state are keeping their fingers crossed in hopes that Mother Nature will bring much-needed rains in coming months after her meager offerings through most of the winter.

After two consecutive years of drought that have forced many of the state's cattle producers to downsize their herds due to lack of forage on rangelands, ranchers face additional challenges this year as more cattle hit the market, driving down beef prices.

This time it's not just beef cattle producers who are downsizing their herds. Dairy farmers, hit with plummeting milk prices and softening demand for dairy products, are also reducing their cow numbers and adding to the supply of beef on the market.

"That drives cow prices down, which affects us," said Steve Lambert, a Butte County cattle rancher.

Kevin Kester, who runs a stocker and cow-calf operation in Monterey and San Luis Obispo counties, said cattle ranchers will be forced to make some tough decisions if the current drought worsens.

If they choose to keep their cattle, they'll have to pay high prices for hay and other protein supplements. Or they could try to find other pasture for their cows, but competition there is fierce because the drought has put much of the state's rangeland in poor condition.

He noted that California's coastal rangelands have been hardest hit this season with lack of rainfall, which has not allowed for much growth on pastures that are typically covered with vegetation.

"There's no grass coming up like there should be right now," he said, noting that his region so far has received only about 30 percent of normal rainfall for this time of year. "It is as dire a situation as it looks. Of course, we always have hope, but reality is staring us straight in the face at the moment."

And that reality is that more ranchers will be forced to sell their herds due to insufficient feed to sustain their animals.

On his own ranch, Kester said he has had to reduce 50 percent of his herd this year, a huge financial hit for his family. He also cut back on employees and expenses and hopes his vineyard will help him subsidize his cattle for the year.

But many other fellow ranchers are not so lucky, he said.

"More and more of our industry folks are calling it quits and liquidating because their other options aren't viable and people have lost their equity," said Kester.

Jeff Fowle, a cattle rancher in Siskiyou County, said skimpy rainfall in the north state, which typically receives 10 to 14 inches of precipitation during the winter months, has ranchers "greatly concerned."

He noted that his ranch in Scott Valley has received less than 5 inches of rain since October and worries that if February and March do not bring some decent storms, cattle producers in his region will be in the same plight as those in Central and Southern California, who have already been hit with successive years of drought.

"We've been slim on water, but we've had enough to get done what we need to get done," said Fowle, who is chairman of the California Farm Bureau Federation beef commodity advisory committee. "But I think this year, because we're so shy on rain up here, we're going to get added into that fold, and a lot of north state producers are going to cut back on their herds."

As a breeder of purebred cattle, Fowle said he depends on other commercial cattle producers to buy his heifers and bulls. But those markets have been weak this year, with a number of his regular customers telling him they're scaling back on their herds and won't be buying bulls because they can't afford to feed them.

Glenn Nader, a livestock and natural resources farm advisor for the University of California Cooperative Extension in Sutter, Yuba and Butte counties, said consecutive years of below-normal precipitation have not only left the state's rangeland with little forage growth but have also dried up drinking water sources for livestock.

"Some people hauled water this fall because their ponds were empty," he said. "Our soil profiles are so depleted that it's going to take some pretty good, inundating rains to get those streams to flow again."

Richard Taylor, a Shasta County cattle rancher, said hauling water three times a week is exactly what he had to do on his winter range in Tehama and Glenn counties. On his ranch in Shasta County, he said the region has had 14 inches of snow since early December, but there's been very little runoff.

Although he has not had to reduce his herd, he's concerned that he might have to if conditions don't improve and he has to buy expensive feed. With the state facing water shortages, he said there might be less hay being grown because farmers with water allocations will choose to use that water to keep their permanent crops alive.

"The trees are going to get water because they've got to survive, where an alfalfa field can be replanted," Taylor said.

Nader said because the state is "way behind" in forage production, "what happens going forward in the next couple of months is going to be critical." While the state could certainly use a good drenching, he noted that having a good feed year would depend more on the timing of those rains than the volume.

"It is going to be a very disastrous year for beef cattle if we don't get some well-timed rains through the springtime," said Nader. "Most of the time we need them about 10 days apart."

Mark Thompson, a Fresno County cattle rancher, said not only does the state need water in the form of rain to help native grass grow in the hills, but it also needs snowpack so ranchers can irrigate their pastures in the summer, when their cows come off the native grass.

"It takes a lot of hay to supplement these cattle when we don't have native feed," he said.

Kester said the silver lining might be that with so many cattle and dairy ranchers selling their cows, less pressure would be placed on the hay market and prices may come down.

But Fowle said high hay prices and other production costs will be a moot point if producers cut their herds back so much that they no longer have a viable operation. The state's budget troubles could also deal another blow to ranchers if the governor cuts funding to the Williamson Act, he added.

"You've got to maintain enough cows to pay the bills and generate income. But if our taxes are going to go up, cows and farming aren't going to do it," he said. "That may be the writing on the wall that says it's time to get out of ag in California and go someplace else."

Matt Byrne, executive vice president of the California Cattlemen's Association, said California cattle producers are not only struggling through a third year of drought and major herd reductions, but they are now dealing with other economic issues such as consumer preference shifts to lower-priced beef cuts due to the national economic downturn.

For Humboldt County rancher Jay Russ, however, these economic issues have so far not been a major problem. He runs a grass-fed beef operation and says his sales have been holding, which surprises him because grass-fed beef is often considered a luxury food item.

"I guess we just have a committed clientele," he said. "But that's just such a little niche. That's not the rest of the cattle world."

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.