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 No more. In the midst of the worst California drought in decades,
the grass is stunted and some creeks are dry. Ranchers in the Golden
State are loading tens of thousands of heifers and steers onto
trucks and hauling them eastward to Nevada, Texas, Nebraska and
beyond.
"If there's no water and no feed, you move the cows," said Gaylord
Wright, 65, owner of California Fats and Feeders Inc. "You move them
or they die."
The exact headcount for livestock on this cattle drive is not known.
But a Reuters review of state agriculture department records filed
when livestock cross state borders indicates that up to 100,000
California cattle have left the state in the past four months alone.
California has shipped out cattle before, but the current migration
is far bigger and includes more of the state's breeding stock, which
give birth to new calves and keep operations running year after
year, said Jack Cowley, a rancher and past president of the
California Beef Cattle Improvement Association.
That could be doing outsized damage to the nation's 18th-largest
cattle herd, since California ranchers will have difficulty
rebuilding once the drought breaks, said cattle ranchers and area
livestock auctioneers.
"We spend a lifetime building the herd the way we want," said
Cowley. Two weeks ago, he sold 18 percent of his breeding herd, or
200 cattle, to an operation in Nevada because he did not have enough
water. He expects he will need to sell another 200 cattle.
"Now," Cowley said, "we've lost all that."
Beef prices already are at record highs, and increased
transportation costs and rising uncertainty about where — and how
many — future cattle will be raised and processed are adding upward
pressure, industry analysts say.
The national cattle herd is at a 63-year low because high grain
prices and drought during the past several years have encouraged
producers to send animals to slaughter early and to reduce herd
sizes.
There are some signs of change. In places where the drought has
eased, or where ranchers are willing to gamble that rain will fall,
some producers have started holding back breeding heifers and female
calves from the slaughterhouses, according to government data
released on Friday. But they are buying California cows, too.
The California exodus also underscores a little-noticed development
in the U.S. beef industry: the evolution of an increasingly mobile
livestock herd, which must travel ever-greater distances to feedlots
and slaughterhouses as the industry consolidates.
WRENCHING CONSOLIDATION
The last major slaughterhouse near the California-Mexico border,
National Beef Packing Co's plant in Brawley, California, plans to
close on May 23. The drop in available cattle sparked the move,
National Beef said, and some ranchers in southern California say
they will need to cross state lines in order to reach the
next-closest packing house.
The Brawley plant could process 1,900 head of cattle a day, or about
2 percent of U.S. slaughter capacity, according to industry
analysts. But with feedlots closing in the region, the plant
couldn't be assured of a steady supply of livestock.
"The fact is, this migration cycle is going to bring about even more
consolidation," said Curt Covington, senior vice president for the
Ag and Rural Banking Division at Bank of the West.
"Unless you see Noah come out to California with a boat, you're not
going to see these cattle come back here any time soon," Covington
added.
CROWDED ROADS, HUNGRY BUYERS
State government paperwork provides some insight for tracking cattle
trailers as they cross state lines.
The top destination appears to be Texas, long the nation's largest
cattle producing state. Buyers this year have hauled in more than
47,400 California cattle, a 71 percent jump over the previous year's
first quarter, according to state agriculture department data.
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"Some of our California cows are going to be Texans. There's no way
around it," said cow-calf producer Tim Koopman, president of the
California Cattlemen's Association and livestock auctioneers. "The
sell-off is not over yet." Nebraska, home to more cattle in
feedlots than any other state, also has joined in. More than 14,000
California cattle arrived in the first quarter of this year,
compared to just 542 cattle that made the trek in the same period of
2013, according to state records.
TROUBLESOME TREK
Many of the cattle crossing state lines are doing so at lighter
weights than normal, due to the scarce water and high feed prices.
Wright, the cattle buyer, said he saw one client bring his beef herd
back to auction weighing 40 pounds less than when he bought them in
January. Yet lighter-weight cattle have a surprising appeal to some
out-of-state buyers: more cattle per truckload.
"If your truck can haul 50,000 pounds on the trailer, you can
transport 50 cows that weigh 1,000 pounds, or 100 calves that weigh
500 pounds," Wright said. Once they arrive and are fattened up, the
larger number of head can translate into increased profits for the
new owners.
Still, the long distances can cause unhealthy stress for the
animals. Wright said he lost a newborn calf during a nearly
1,600-mile trek to Texas last winter even though his driver stopped
to nestle it in bedding.
"It still froze to death," Wright said. "I'll never do that again."
EVERY COW COUNTS
But the business imperative persists. Bill Brandenberg, owner of the
Meloland Cattle Co in El Centro, California, said his company's
survival depends on his ability to move cattle to states where food
and water are less expensive.
"We've already sent some cattle to Texas," Brandenberg said. "In two
weeks, we're sending more to Kansas."
The Texas herd fell 11 percent last year, or 1.4 million head, the
biggest decline in nearly 150 years of recorded data, and the influx
from California will not be enough to reverse the trend. The
shrinking herd prompted Cargill Inc last year to shut its plant in
Plainview, Texas, capable of slaughtering 4,500 cattle a day.
Hereford, Texas, which bills itself as the Beef Capital of the
World, has seen truckloads of California transplants this year.
The Bar-G Feedyard just outside of town recently took in a 164-head
delivery from a customer who wanted to move them before the Brawley
slaughterhouse closed, assistant manager Kevin Bunch said.
"He got scared," Bunch said, and shipped the animals to Texas to
ensure he could eventually sell them for slaughter.
(Reporting by P.J. Huffstutter in central California and Chicago
and Tom Polansek in Hereford, Texas, and Chicago; additional
reporting by Lisa Baertlein in Los Angeles; editing by David
Greising and Peter Henderson)
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