Midwest drought parches the ranching industry

Marketplace Contributor Aug 6, 2012

Midwest drought parches the ranching industry

Marketplace Contributor Aug 6, 2012

Jeff Horwich: Out on the plains, drought is parching everything from corn to cattle. When the prairie grass burns up, so does one business model that depends on it: ranching.

From Harvest Public Media, here’s Frank Morris.

Frank Morris: It is hot and dry out in western Kansas, in a good year. South of Dodge City, the native grass is tough. So are the ranchers.

Nathan Pike: My name is Nathan Pike.

Pike is a spry son of the Dust Bowl.

Pike: Well, I was born in a drought, and I’ve been through several. But this is probably the most damaging one I’ve seen. I’ve never seen buffalo grass die. And it has.

Out on his ranch, Pike kneels to touch a sea of stubby dry grass, burnt to about the shade of his straw cowboy hat.

Pike: You can see what we’re up against, this old stuff is no good at all, and we’re in a fire hazard.

Pike’s cows won’t eat this stuff, so he has to buy hay, hauled in from greener pastures, or corn. With fields of both withering from Indiana to Colorado, his feed prices have spiked. Pike can’t make money feeding cattle this way, so he’s sold most of his herd to a slaughterhouse.

Pike: I’ve been in the business for 62 years. That’s quite a little while. I certainly, this is the least cattle I’ve owned for at least 50 to 52 years.

Dan Loy: We heard similar stories last year in Texas and Oklahoma.

Dan Loy at Iowa State University says that now, with drought sparking a selloff in Kansas and Nebraska:

Loy: The national cattle herd currently is the lowest it’s been since 1950.

When there were half as many people.

The effects of this drought will take years to play out. Desperation selling is suppressing beef prices, for now, but it’s also butchering the production capability of this industry. Ranchers are sacrificing healthy cows that would otherwise keep having calves. So, supply’s bound to tighten eventually, leaving customers paying more, and a lot of ranchers wishing they still had cattle to sell.

I’m Frank Morris for Marketplace.

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