La Plata County ranchers must contend with a host of economically undesirable circumstances this summer.
The Iran war has increased fuel and fertilizer prices, while severe drought across the Southwest has reduced forage and hay production – forcing ranchers to either spend more on feed and water or reduce herd sizes.
While strong cattle prices have helped prevent a financial crisis, producers say widespread herd reductions could have lasting consequences for local agriculture.
Drought means less forage and less hay yield. So ranchers must provide supplemental hay – already more expensive than grazing – at a more expensive price than usual. On top of that, with the cost of fertilizer up, some farmers chose not to use it, further reducing yield.
“It’s a vicious cycle,” said Evanne Caviness, conservation division director for the Colorado Department of Agriculture.
While the challenges come at a time when beef prices are at record highs, creating a rare situation in which strong cattle markets are helping offset some of the financial strain caused by drought, some producers are concerned that a nationwide sell-off of cattle herds will have long-lasting impacts.
“It’s really scary, structurally, for the industry,” she said. “If so many people are selling because the prices are good, what does that mean for us as an industry two or three years from now?”
Wayne Semler, a cattle and sheep rancher in La Plata County, is busy moving irrigation water across his pastures. It has been so dry this year that the soil did not retain enough moisture to even begin the greening process.
It’s forced Semler to use up a large portion of his water allotment early in the summer. Usually, there is snowmelt water still available, but this year, he has had to go to storage water sooner than usual.
A lack of snowfall, record-breaking temperatures and single-digit humidity stripped the soil of much of its remaining moisture.
With less pasture available for cows to graze upon, ranchers supplement with hay, a significantly more expensive option.
The average cost of pasture feeding per cow is $25 to $35 a month. By comparison, a month’s worth of hay costs $90 to $150 a month, about a 150% increase in overhead costs.
Semler has already begun reducing his flock and herd as a result of the drought. Sheep that lost lambs, failed to lamb or are no longer productive have been sold, along with the ranch’s rams, which he plans to replace this fall.
He is making similar decisions with his cattle, sending older cows and those that lost calves or failed to breed to market.
The goal, he said, is to conserve limited pasture, hay and water resources by focusing on the animals most likely to generate income. In some cases, cows are being sold earlier than normal because drought conditions have reduced available forage and shortened the amount of time they can remain on pasture.
“You can’t afford to feed non-productive stuff, especially this year,” Semler said. “You sell the cow and the calf now, but what is the calf and the cow worth this fall? Sure, you cut your expenses, but you also cut your income.”
Steve Pargin, another local rancher and hay producer, and the president of the La Plata-Archuleta Cattle Ranching Association, said he predicts a 20% to 30% yield reduction in hay production this year because of the drought.
During the last severe drought, he said he shed a third of his herd and trucked many to Kansas for summer grazing.
“If we didn’t have that massive rain in October last year, it would be a disaster,” he said.
Drought has ripple effects on cattle herds that last well beyond a single dry summer, said Semler’s son, Michael Semler, an instructor of animal science and livestock judging coach at Texas A&M University.
Because cows expend so much energy feeding their calves, many struggle to meet their nutritional needs when grass is scarce. In those conditions, reproduction takes the backseat as their bodies delay or shut down reproductive functions, Semler said. Therefore, cows will take longer to resume cycling, are bred later than usual, or may not become pregnant before the fall, he said.
In this region, most ranchers try to breed cows in May, June and July to have calves born the following February through May, but in hard drought years that whole calendar can get pushed back, he said. To compensate, ranchers feed more hay and invest in fertilizer and other supplements, adding to their operating costs in an already tight business.
That forces ranchers to sell more cows, which can shrink herds over time unless producers spend heavily on supplemental feed to maintain reproductive performance.
While the cost of cattle is at an all-time high, finally reflecting the cost of what it takes to raise them, Caviness said, reducing herd sizes is not a long-term solution and may have some damaging impacts on the local and national industry.
A12-year-old cull cow that might once have been a marginal asset can now sell for more than $3,000, she said.
But rebuilding a herd is slow and costly work. A heifer purchased this fall will not produce a calf for two years, and today’s high purchase prices make it difficult to buy back in later, she said.
Caviness is worried that the structural effect of this sell-off may be long lasting, with some ranches never fully returning.
Unlike multigeneration ranches that inherited land and cattle, Caviness and her husband are “in the herd growing business” from scratch.
They cannot afford to purchase an ideal herd size at current prices, so they are growing slowly by retaining heifer calves instead of selling them.
That strategy means forfeiting immediate revenue – potentially around $2,500 per calf – in favor of building future breeding stock. It’s a long-term, capital-intensive bet that is especially risky during a drought year when input costs are high and feed is scarce.
Beyond individual ranch finances, Caviness said cattle play a measurable role in the local economy.
Citing work by the Cattlemen’s Association, she said each cow in La Plata County contributes an estimated $600 to $800 annually to the local economy.
Nationally, the U.S. cattle herd is at its lowest level since the 1950s, even as demand for beef remains strong.
Caviness is skeptical of filling that gap with imported beef. She warned that while imports might relieve price pressure for consumers, they could further undercut already vulnerable domestic producers.
“In Colorado, we’re losing farmland faster than any other state in the nation. We lost 1.6 million acres of farmland in the last five years of farmland going out of production, and that’s not by accident,” she said. “It is really, really hard for agriculture to continue with the stressors that are going on right now.
jbowman@durangoherald.com
