Nearly 20 percent of US cattle herd in areas with tough drought conditions

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Nearly 20 percent of US cattle herd in areas with tough drought conditions
Source: CNBC Business

Roughly one-fifth of the U.S. cattle inventory is within areas facing drought, including dire conditions that have led some livestock producers to sell off herds early due to the lack of hay.

Some ranchers in parched areas of the Central Plains and Southern regions have relocated cattle herds to lands with greener pastures or where water is more available.

“We’re just hoping for the rain to come and make it to the next cycle,” said Monte Tucker, who runs a farming and ranching operation in Sweetwater, Oklahoma.

A Great Plains drought from 2011-2013 led to a herd liquidation phase of the cattle cycle, eventually resulting in the lowest U.S. cattle levels since the early 1950s. Cattle prices rose to lofty levels after the cow supply fell but the herd rebuilding phase has been underway for several years, pressuring prices.

As a result, cow-calf producers such as Tucker — those operators breeding cattle with plans to sell the offspring to feedlots — are getting squeezed with lower prices than they were getting just a few years ago. He also grows wheat and said the business is generally tougher for farmers due to the rising costs of equipment, fertilizers and other needed agricultural inputs.

According to the U.S. Department of Agriculture, 75 percent of Oklahoma is in moderate or more severe drought, based on figures released Thursday. Oklahoma ranks fifth in the nation in terms of cattle population.

The drought percentages are calculated by the U.S. Drought Monitor but based on a report published by the USDA.

Arkansas, Alabama and Georgia are three livestock-producing states with more extreme drought conditions. Nearly 60 percent of Alabama has drought conditions, and some farmers are selling off their cattle herd to cope.

Nationally, 19 percent of the cattle herd is located in areas with moderate or severe drought conditions, according to the USDA report. At the end of January 2016, the percentage of the nation’s cattle herd in drought areas was just 11 percent.

“It seems to be upticking right now,” said Brad Rippey, an agricultural meteorologist with the USDA. “The Central and Eastern United States has had this incredibly warm late winter, or January-February period.”

The meteorologist said the core of the drought stretches from Alabama through the Southern Appalachians. He said some of the areas received winter rain but added that the “drought recovery was far from complete.”

Rippey said in some drought areas where winter wheat is raised for cattle feed there have been reports that herds have been pulled off the wheat early to protect the development of the crop. “Pulling cattle from a natural feed source early could increase feeding costs because you have to supplementary feed them,” he said.

Even so, Tucker said the low prices for wheat crop make sometimes still make it economical for cattle ranchers to continue to graze herds on wheat “because it’s worth more to put it through the calf than out in through the combine.”

Tucker, a fourth-generation farmer, recalls the 2011-2013 drought. Back then, he said some ranchers to sold their herds and looked for jobs in the oil and gas industry.

“We were really fortunate that the oil and gas industry was really booming back then,” said Tucker. “Now the oil and gas industry is in kind of a slump, so it’s going to be a little bit tougher this time around because those jobs are few and far between.”

That said, Tucker considers himself “very fortunate and blessed” because rains a while back allowed him to grow about two years’ worth of hay. He’s also been able to beat the drought somewhat using well water, while other ranchers are not so lucky.

“Guys east of me are feeling the pinch a little harder,” he said. “They have run out of water and right now they’re moving cattle.”

Texas, another major cattle state, has drought conditions too but not as severe as other states in the region. The Texas drought region is concentrated mostly the northeast portion of the state and represents only 5 percent of the state.

Elsewhere, Kansas and Missouri have at least 50 percent of the state in drought conditions. Colorado also makes the list with at least 40 percent of the state in mostly moderate drought.

While the Plains, Southeast and parts of the Northeast have drought conditions, Rippey said the West “is looking fantastic” in terms of drought.

Indeed, California’s drought is largely gone but January and February storms caused flooding and heavy winds that have led to impacts to the state’s agriculture.

The California Farm Bureau reported this week that one almond orchard grower in San Joaquin County experienced flooding three times in one month. Storms also caused wind damage to walnut and almond trees in the state.

Flooding from February storms brought heavy rains to Northern and Central California, resulting in several dairies relocating cows in low-lying areas along the Tuolumne and San Joaquin rivers.

Finally, vegetable and fruit harvesting last month slowed in northern and southern portions of the state due to muddy fields. A warming trend in parts of California allowed some areas to dry out this week, although rain is forecast over the weekend in several regions.