Drought, hay shortage mean tough economic times for Wyoming ag industry

Aug 31, 2012

The U.S. Department of Agriculture says this year’s hay crop will be the worst in decades, because of the drought. Hay is already in short supply, and prices have spiked. Wyoming Public Radio’s Willow Belden reports that the hay shortage is forcing ranchers to make tough choices and could have a lingering economic impact on the state’s ag industry.

WILLOW BELDEN: The Flying Y ranch is nestled beneath the Snowy Range mountains, just west of Laramie. About 300 cows graze on the open meadows. They always eat grass in the summer. But this year, the grass isn’t doing well. Rancher Ryan Kelly says last year at this time, the fields were lush and green.

RYAN KELLY: We was still under water this time of year, or pretty close. You know, mid-July, first of August, we still had water standing out in some of the meadows.

BELDEN: This year, those meadows are brown and parched. So little grass has grown that they haven’t been able to cut any hay. Which means there isn’t enough forage to get the cows through the winter.

KELLY: And if you don’t have enough, you either have to buy hay, or sell cows.

BELDEN: Kelly says they considered buying hay, but it’s just too expensive. Prices have about doubled since last year.

KELLY: I’ve heard hay prices anywhere clear up to three hundred fifty dollars a ton. You know, figuring 20 to 30 pounds per cow per day, it turns into a lot of money.

BELDEN: And that’s if you can get hay at all. Many producers are only harvesting about one-third as much hay as usual, and some haven’t produced any. Neighboring states don’t have much hay available, either, because the drought has hit them too. So Kelly’s ranch is going with second option: selling off cattle. They’ve already sold about 30 cows, and will likely unload another 50 in October. That’s nearly three times as many as they sell in a normal year.

Kelly is not alone. Ranchers across Wyoming and the west are downsizing their herds. For many, it’s because of the hay shortage. But that’s not the only problem.

At Orville Johnson’s ranch northeast of Laramie, the main concern is drinking water. Johnson points out a creek that meanders through one of his fields. This is where the cows usually drink, but this year, there’s no water – only a bed of cracked mud. Johnson says normally, it would look very different.

ORVILLE JOHNSON: It would be running anywhere from six inches to a foot. Right there where we would cross it would’ve been about two foot deep probably. And as you can see, it’s just dry.

BELDEN: Johnson says there are still a few holes with water, but they’ll be dry soon. And then he’ll have to turn to well water. Typically, he wouldn’t do that until the creeks freeze up in the winter.

JOHNSON: Starting the wells this early, we don’t know if they’re going to go dry or not, because they’re all kind of shallow hand-dug or backhoe-dug wells.

BELDEN: Johnson has already sold some cows, and he says if the wells go dry, the entire herd will have to go.

BELDEN: Luckily for the ranchers, cattle prices are still reasonably high. But even so, downsizing a herd is bad for business. Dallas Mount is an extension agent in Platte County. He says the financial impact of a drought is most apparent in the years following the drought.

DALLAS MOUNT: When you sell off livestock, what that means is cash revenue. So this year you might be able to pay all your bills and get things done. But what you sold off was your factory. So next year, if we get grass and the grass grows, you’re not going to have as many cows to sell. So you’ll have to hold back heifer cows to rebuild that herd, so that means you’ll have even fewer calves. And typically that rebuilding takes about three years.

BELDEN: That’s three hard years for ranchers. And three hard years for hay producers.

Todd Fornstrom grows hay in Pine Bluffs, near the Nebraska border. He’s one of the few hay producers who’s had a pretty good year. That’s because he has enough well water to irrigate his fields. So his crop is fine, and getting a good price for the product is easy.

TODD FORNSTROM: Hay usually has different grades, where dairy hay is the high quality, all the way down to feeder hay. And this year it really doesn’t matter a lot. As long as it’s nice and green, and somebody can feed it, it’s worth a lot of money.

BELDEN: But he says hay prices won’t stay high in the future, if too many ranchers sell off their livestock.

FORNSTROM: If you want to sell hay, you don’t want people selling livestock. What it will do is it will curb demand. And demand is hard to get back.

BELDEN: Plus, a reduction in livestock can be bad for the state’s overall economic picture.

TEX TAYLOR: Cattle production and livestock production in Wyoming affects not only the rancher but the local communities also – the guys on Main Street basically.

BELDEN: That’s Tex Taylor, an ag economist at the University of Wyoming. He says when ranchers unload livestock, businesses like feed stores, gas stations, veterinarians and mechanics all suffer.

Still, many Wyoming ranchers say they can make it through one bad year. But if next year is equally dry, they say times ahead could be very tough. For Wyoming Public Radio, I’m Willow Belden.