Drought forces Texas, Okla. ranchers to cut herds

[August 03, 2011]  McALLEN, Texas (AP) -- Texas cattle rancher Charles Kothman is down to six calves and their mothers after selling off 80 animals in recent months.

The drought that has baked pastures and dried ponds has ranchers in Texas and Oklahoma -- the nation's top two beef producers -- culling their herds. Some have sold off all their cattle, but Kothman is hanging on and hoping for rain.

"I may get to the point that I say `no' and take them over to the sale barn," said Kothman, whose ranch is about 70 miles south of San Angelo. Some ranchers say they may sell out and get back into the business down the road. Others may never get back in, Kothman said. "My reason for saying maybe is because I'm 74 years old."

Cattle ranchers either have to sell cattle during droughts or buy feed because their barren pastures can't sustain the animals. If they opt to buy hay while watching for rain clouds, they risk running into bankruptcy. If they sell off cows of calf-bearing age instead, they do it knowing rebuilding the herd later will be a long, costly process.

Most cows sold are being sent to slaughter. When the drought ends, demand for animals to rebuild herds is likely to peak just as the nation's cattle population is at its lowest since 1958. Prices for the ranchers still in business are expected to be sky-high.

"Whether you raise them or buy them it's going to be much more expensive to rebuild your herd," said David Anderson, a livestock economist with Texas AgriLife Extension Service.

Texas's beef herd had shrunk before the latest drought. At the beginning of 1996, Texas had 5.9 million cows but a drought that year and low beef prices at the time prompted ranchers to cut down the herd, and it continued to shrink with the recession and the skyrocketing costs of maintaining cattle. At the start of this year, the herd was down to 5 million.

Texas is coming off its driest nine-month period ever and its hottest June on record. Most of the state is in one of the two worst drought stages. The U.S. Department of Agriculture rated 94 percent of its pasture and range land as either poor or very poor last week, a record since tracking began in 1995. The rating means there's no food for grazing livestock.

Conditions are similar in Oklahoma, which is the driest it has been since the 1930s.

Some cows are being sold to cattlemen in states that have pasture, but most are going to slaughter. While ranchers cull their herds every year, they usually sell older or infertile cows and pass plump calves to feedlots in an effort to keep their herds as profitable as possible.

In a drought, calves are taken from mothers earlier and sold at a lighter weight and, presumably, less profit. Borderline cows nearing the end of their productive life are let go early. The goal is to protect the "factories," those cows that are in their prime calf-bearing years. A cow sold now means there won't be a calf to sell next year.

Bob Edington, who owns the Coleman Livestock Auction 160 miles southwest of Fort Worth, said ranchers have already sold calves they would normally keep until fall. On July 20, he had nearly 4,700 head of cattle move through his auction. A year before, that number was closer to 1,200.

"We're selling the mothers off, which is the ... factory of our business," Edington said.

"The cattle ain't here no more," he added. "People need to see what's going on, it's devastating."

A woman recently called Edington to say she would be bringing her last 70 animals to his next auction. She's 89 years old, "and she won't be back," he said.

But Jesse Carver, executive director of the Livestock Marketing Association of Texas, said the number of ranchers selling entire herds remains relatively small and most are older ranchers who are "tired of fighting it."

Still, in particularly hard hit areas, ranchers have seen neighbors load up their cows for sale and decided they better do it too while prices remain high.

"A panic has set in," Carver said of those areas. "If you saw a statewide mentality like that, it would be devastating ... everybody trying to beat the market down."

Brady rancher Clay Jones has sold 130 animals and will sell another 82 this week. That will leave him with about 182, and he also has income from his position as president of a bank in town.

"Without any rain, I'm probably a month away from liquidating the remainder (of the herd)," said Jones, whose family has been in ranching for 100 years. "In my mind, it's not a decision. It's a matter of water. It's a matter of grass, feed, the input costs" to keep the herd going.

It's a similar story in Oklahoma. And, with limited hay production because of the drought, the winter could be especially problematic, said Mark Anderson, a herd manager for Oklahoma State University.

"I talked to one man who picks up hay in a meadow that made 106 large round bales last year," Anderson said. "It made 17 this year."

[Associated Press; By CHRISTOPHER SHERMAN and BETSY BLANEY]

Blaney reported from Lubbock, Texas. Associated Press writer Sean Murphy contributed to this report from Oklahoma City.

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