Where's the Beef? Calif. Cattle Ranchers Downsize

"If we were to have another year like this, I would probably be out of business."

Friday, Nov 7, 2008  |  Updated 12:43 PM PDT
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Where's the Beef? Calif. Cattle Ranchers Downsize

AP

In most drought years, ranchers can send their herds to other farms but in a record statewide drought, that's not an option.

California's worst drought in decades is forcing the state's cattle ranchers to downsize their herds because two years of poor rainfall have ravaged millions of acres of rangeland used to feed their cows and calves.

The parched, yellow pastures on Joe Gonzales' cattle ranch attest to the severity of a dry spell that is devastating the economic fortunes of many of the state's beef producers.

Gonzales, who normally runs 500 cows on his 2,000-acre spread about 30 miles south of San Jose, cut his herd by half over the past year and may have to sell more if the drought persists.

"When there's no rain, there's no grass," said Gonzales, 65. "As the drought continues, you have to either continue to feed your cattle or sell them. It's the worst I've seen it in more than 30 years."

During most dry years, California cattlemen send their herds to places with healthier pastures or buy supplemental feed to sustain their animals until the rainy season. But high fuel prices, a lack of green pastures in California and neighboring states, and the soaring cost of livestock feed have left ranchers little choice but to sell off their mother cows because they can ill afford to feed them.

California ranchers typically raise calves for six to 10 months before selling them to feedlots in Texas, Nebraska, Colorado and other states, but they usually keep mother cows that produce offspring for a decade.

"Cattle producers in the state are facing some serious management decisions," said Matt Byrne, executive vice president of the California Cattlemen's Association. "When you're counting on something from Mother Nature, it's always a risky business."

The number of beef cows on California pastures dropped from 700,000 in January 2007 to 655,000 in January 2008, or 6 percent, according to the U.S. Department of Food and Agriculture. John Nalivka, president the agricultural research firm Sterling Marketing, expects another 6 percent decline when new cattle numbers are reported in January.

The drought has also hurt out-of-state ranchers who normally bring their cattle to graze on California pastures during the winter rainy season. Some of those cattlemen are selling their cows because feeding them is too costly, Nalivka said.

California, the country's fourth-largest beef cattle producer, is downsizing at a time when U.S. beef production is shrinking amid higher fuel and feed prices. The herd reductions spell bad news for consumers.

"Six months from now, there's not going to be the flow of animals out of the system, so you're going to see prices go up," said Alex Avery, research director of the Hudson Institute's Center for Global Food Studies in Washington.

In California, cattle ranchers are among the hardest hit by a statewide drought that has forced farmers to reduce crop plantings and leave fields fallow, dealing a major blow to the state's $30 billion agriculture industry.

In the first eight months of this year, state officials say, rangeland losses made up $95 million of the estimated $260 million in drought-related agricultural losses.

A recent federal report found that 95 percent of the state's rangelands are in "poor" or "very poor" condition.

"We've been through droughts before, but it's been a long time since we've gone through a drought as severe as this," said John Smythe, executive director of the U.S Department of Agriculture Farm Services Agency in California.

Gov. Arnold Schwarzenegger declared a statewide drought in May after the state recorded two years of below-average rainfall, a sharp reduction in Sierra Nevada snowpack and its driest spring on record. Late last month, state water officials warned local agencies that their water deliveries could be cut by as much as 85 percent next year.

The drought has drained many reservoirs, left lawns and golf courses brown, stranded fish in dried out creeks and forced homeowners and businesses to cut their water usage. It also contributed to an unprecedented wildfire season that scorched hundreds of thousands of acres of forest and rangeland this year.

In rural Monterey County, the herd reduction plays out at 101 Livestock Market, where ranchers in Stetson hats and blue jeans bring their animals to be auctioned off in rapid-fire succession.

Wayne Farrell, 59, and his partner usually run about 200 cows on their Salinas Valley ranch, but they have reduced their herd to 140 animals and may have to sell the rest if drought continues.

"If we were to have another year like this, I would probably be out of business," Farrell said. "I would like to stay in it until I'm so old that I can't do it anymore, but economics plays a big part of this. If you can't make money doing something, you have to quit."

The cattle sell-off has brought a short-term spike in business for Jim Warren, who has run a livestock auction since 1975, but it leaves fewer animals to sell in the future. He said many ranchers have liquidated their entire herds and left the business.

"Economically, this is the worst I've seen it by a long ways," Warren said. "It's a disaster for people who are trying to make a living (as ranchers)."

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