Drought Effect

Dry spell ripples down on Nevada ranchers

Consumers to feel impact by spring
2012-08-08T06:00:00Z 2012-08-23T15:35:50Z Dry spell ripples down on Nevada ranchersBy ANDREA GLOVER — aglover@elkodaily.com Elko Daily Free Press

ELKO — The drought plaguing more than half the country is also drying up profits for Nevada cattle ranchers.

“About $70-$100 per head the market has lost from May until the first of August for calves,” said Vice President Ron Torell with the Nevada Cattlemen’s Association.

With severe drought crippling the Midwest, cattle producers have already seen an increase in prices for field crops, such as soybeans and corn, which ranchers rely on to feed their livestock.

“The mid-portion of the U.S., it affects all the rest of us pretty severely,” said Torell.

As of last week, nearly half of the nation’s corn crop was rated poor to very poor, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service. About 37 percent of U.S. soybeans were lumped into that category, while nearly three-quarters of U.S. cattle acreage is in drought-affected areas, the survey showed.

Across 32 states, including Nevada, ranchers and farmers in 1,584 counties — 50.3 percent of the total — are now eligible for low-interest USDA loans to offset the impact. Some 90 percent of those counties were listed because of drought conditions, which is a new record.

In Elko County, cattle ranchers are feeling the drought’s impact more than most.

Dry conditions have resulted in less hay available to purchase, and caused many cattle ranchers in the Elko area to sell their cattle far ahead of schedule.

“Almost everybody is selling early this year because of the lack of feed — everything’s pushed up 30 days,” said Torell, who explained cattle are typically sold in the fall, between the months of October and December.

Cattle raised in Elko County are exported to the Midwest’s feedlots, where they’re fed grain for 120-150 days to pile on the pounds before being harvested.

Due to transportation costs, cattle produced in the Midwest are already worth more money than cattle in the West. The extreme drought conditions, coupled with a rush of supply, has led cow traders and slaughterhouses to pay less — significantly lowering the return to Nevada’s cattle ranchers.

Ranchers aren’t the only ones feeling the heat.

“Retail prices are delayed, but they’re going to go up,” said Torell.

According to the USDA’s forecast for food prices, beef from cattle sold in July will begin showing up in grocery stores in November and December, temporarily driving down meat prices.

But by January, beef prices are expected to rise sharply, with the USDA forecasting a jump of 5 percent.

“Because of the drought, we’re probably going to have lower cattle numbers than we’ve ever experienced in many, many years,” Torell said.

Higher food prices aren’t just limited to meat products, as crop shortages this summer translate into price hikes next year.

Across the board, food prices could rise as much as 3.5 percent in 2013, according to the USDA’s forecast.

Other factors are also increasing prices for consumers.

“Even as bad as the drought is the government mandate using corn for ethanol,” said Torell. “It’s redirected the corn supply that used to be fed to cattle, to energy — and that’s at the expense of the cost of food.”

The Environmental Protection Agency has been asked by ranchers and farmers across the U.S. to curb the mandate to produce ethanol from corn, saying it has driven up prices for animal feed.

Even with the difficulties, Torell said things could be worse.

“The market’s still pretty decent. We could be a lot worse off. Dry years are going to come. We live in the driest state of the nation — you’ve got to expect drought,” Torell said.

Copyright 2015 Elko Daily Free Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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