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Colorado beef industry struggling amid drought, wildfires and tariffs

Posted at 4:18 PM, Sep 01, 2018
and last updated 2018-09-01 18:19:51-04

ELIZABETH-- Cattle ranchers in Colorado are struggling to make ends meet after a particularly dry year in the state.

“This is one of the worst droughts that we’ve seen in my lifetime,” said Retta Bruegger, a regional specialist in range management for Colorado State University.

At least 65 percent of the state is experiencing an extreme drought. Because of that, some ranchers are being forced to make tough decisions, including selling their cows sooner than they normally would and at lower weights. That means the ranchers are making less money per cow than they normally would.

Even before the drought, prices for cows this year were expected to be lower because of the way the market is moving, Bruegger said.

Along with dry conditions and less grass available for the cattle, hay prices are also on the rise.

“Hay costs right now we’re probably 25 to 30 percent higher than they were last year at this time,” said James Steuter, the manager of the Lone Star Ranch in Elizabeth.

The Lone Star Ranch is a full blood Wagyu beef and seedstock operation that sells direct to consumers. Steuter says the drought started in the winter for the ranch since there was very little snowfall and that stunted the grass growth in the spring.

The dry conditions continued into the spring and summer, with June’s rain totals looking more like August’s for the ranch.

“No rain equates to no growth in the grass and no grass is no food for the cows,” Steuter said.

Because of this, he’s been switching up the way his cattle graze, moving the cows between pastures with more frequency to give the grass a chance to grow back.

“You can plan for drought but it’s going to impact your operation regardless,” Steuter said. “Everybody is adjusting to the conditions that they are dealt.”

The drought is particularly difficult for grass-finished operations because the cows receive nearly double the input of grass than a typical cow-calf operation.

“Input costs increase. We can’t stock as many cows on the ranch as we typically do in a normal year,” Steuter said. “For us it means we will have a less beef available to sell to the consumer and that absolutely impacts our bottom line.”

It’s causing some ranchers to get rid of more of their stock than they normally would, selling off mother cows and calves that they can’t afford to feed.

“This is just a really challenging situation for people right now,” Bruegger said. “People are faced with multiple bad decisions that they might be selecting between.”

Along with the drought and higher hay prices, wildfires have scorched thousands of acres of land and have also impacted some cattle operations in the state.

This month, Colorado State University hosted a workshop for ranchers to talk about ways to overcome the various hurdles they are currently facing.

Veterinary experts spoke about alternative forms of feed for the cattle that may be cheaper, business professors were available to talk about strategically selling off livestock and which livestock to sell off and other experts were available to talk about wildfire mitigation and preparation.

Even some botany experts were on hand to talk about how grass changes in a drought.

“You can see issues with nitrate consolidation in plants, which can actually poison livestock and can be a fatal condition. That’s associated with drought conditions,” Bruegger said.

All of this was an attempt to help small ranchers survive a particularly rough year.

In July, the U.S. Department of Agriculture announced a $12 billion aid package to help struggling farmers and ranchers across the country. It came on the heels of China announcing additional tariffs to beef products.

China imposed a 25 percent tariff on hundreds of American-made products, including beef.

“I know tariffs are never good for supply and demand,” Steuter said. “Approximately 15 percent of U.S. beef is exported, primarily to Asian markets.”

Because of the tariffs, beef is stockpiling here in the U.S. Steuter said.

The Lone Star Ranch doesn’t send its meat abroad; however it is competing with big beef operations that are now keeping more meat in the U.S. because of those tariffs, and that can be bad for the little ranches.

“The beef business is a tough business even a good year,” Steuter said. “It’s tough to sell beef at higher price when people have it available to them at the supermarket.”

Despite all of the hardships, Steuter doubts that consumers will notice much of an impact on the cost of their beef at the supermarket.

“But for people like us who are selling direct to the consumer, there is a huge impact,” Steuter said.

Still, the drought, hay prices, wildfires and tariffs could all affect beef operations for years to come.

“Due to the drought, we will see that loss in beef production over the next 23 or four years because it takes so long to finish these cows on grass,” Steuter said.

It’s calving season at the ranch, 37 cows are about to give birth. But Steuter says the calves will start their lives struggling to gain weight.

“You start seeing lower weight in the calves because are not getting the milk they normally get,” he said.

The mother cows are already losing weight as well and Steuter expects that it will be more difficult to breed them again next season because of it.

“When they have been struggling through the summer, struggling through the fall, they’ve got calves and they’re getting beat down, it’s tough to get them to sometimes to breed back because they’re lacking in nutrition,” he said.

Still, he’s managing the ranch conservatively just in case Colorado experiences another dry winter and he says Lone Star Ranch is ready to weather whatever conditions they are handed. And, he encouraged people to buy local to support the state’s beef business.

“We are relying on the local community to be buying our product,” Steuter said.