Testing the waters: Routt County cattle ranching dealing with struggles in continued drought
April 21, 2013
Steamboat Springs — Newborn calves are testing their legs and romping in the pastures near Steamboat Springs this month. And to passing motorists, it looks idyllic from the highway. What people can't see from their automobiles, and many of the rest of us don't appreciate, are the late nights ranch families spend assisting their cows with difficult births. They haven't experienced the early mornings when ranchers bring struggling calves into their kitchens to warm them and keep them alive.
This spring, perhaps more than any other, the ranchers who care for the calves and depend upon them for their incomes are faced with a particularly difficult set of choices.
Ranchers and farmers on Colorado's Western Slope are confronted with the likelihood of a second straight season of extreme drought. And if their hay fields aren't more productive this summer than last, they might be forced to sell some of their mother cows to avoid paying more than twice what they are accustomed to — more than $300 per ton — to import hay from as far away as Canada.
The newborn Black and Red Angus calves in the meadows just now greening up from the headwaters of the Yampa River in South Routt to the Elk River Valley near Clark, represent not just new life, but also the land-use practices that have shaped the landscape of these valleys since the early 20th century. Ranching is more than a job; it's a lifestyle being passed down from generation to generation. And the reality, rancher and Routt County Commissioner Doug Monger said, is that a majority of ranch families include a member who is employed off the ranch to augment income and secure health benefits.
CJ Mucklow, the western region manager for the Colorado State University Extension, said a second summer of drought could have lasting impacts on the cattle business in western Colorado, particularly for those ranches whose business model involves maintaining a permanent herd of mother cows and selling their weaned calves in autumn.
"If the drought continues a second year, it will be a real detriment to the cow/calf industry," Mucklow said. "We can't afford to pay these prices for a ton of hay, $200 to $400 a ton. If we have to depopulate the herds, it will take you years to build them back."
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And when the time finally comes to rebuild cattle herds, the necessary young females called heifers will be only more expensive because of increasing demand.
Professor Steve Koontz, an agricultural economist with CSU, said the best choice for ranchers across the American West might be to move on from the familiar cow/calf business model.
"Where the environment and the market is sitting right now, this is really the worst-case scenario for western cow/calf producers," Koontz said. "It's going to be very tough to go through and come out on the other side."
This is no time to borrow money to feed $300 hay to cows, Koontz said. Betting that current high prices for weaned calves will hold up until September or October could be a losing proposition. Instead, he sees cow/calf operators making a transition to raising hay for livestock producers in other regions of the country while running a few head of yearling steers when the climate affords them that opportunity.
"The money maker (in the western U.S.), easily for the last 10 years, has been forage production," Koontz said. "It's a tough message to deliver, but I know producers who have done that — sold cows and substantially reduced the numbers of calves. If you're going to hold your breath on calf prices, we're all going to be blue before this is all over."
Wayne Shoemaker — who together with his wife, Sonja, manages the Bar A Ranch near Toponas — pointed out that the cow/calf business model is "pretty traditional for this part of the world." A past president of the Routt County Cattlemen's Association, he said the long winters of Routt County mean that cows must be fed hay all winter. That isn't the case in milder parts of the country, giving those farmers and ranchers a competitive advantage.
"Up here, you have to feed them everything they eat (grazing is not an option during winter) and feed is expensive. Given the high cost of inputs, a lot of people just don't want to do it anymore," Shoemaker acknowledged.
Still, he was in the thick of calving at his ranch on the edge of the Flat Tops this month.
What makes it particularly difficult right now for ranchers to give up on calf production is that the drought has resulted in some of the highest prices livestock growers have ever seen for the beef cattle, at the same time, the cost of feeding their animals through the long Rocky Mountain winters is giving them doubts.
Since the good old days in 2010, when livestock producers were celebrating prices of $1.25 per pound offered for weaned calves at auction, prices have gone up further. A calf today might sell for $1.85 per pound (feedlot managers would say $185 per hundred weight) making the 550-pound animal worth $1,017.
But then there is the persistent drought.
Shoemaker said that despite the high prices for weaned calves and yearling steers run on the ranch, he's not convinced the sales won't be offset by higher costs.
"We're seeing some good prices compared to what they were five or six years ago, but we're also facing huge increase in production costs," he said. "At the end of the day, I don't know if these prices will cover our costs: tires, fuel, gas, fertilizer. It's inflation. You name it, it's up there."
The Shoemakers have a natural beef business of their own: Yampa Valley Beef. They purchase steers from their ranch owners and finish them on grass or grain, but the cattle that gain weight on grain do so on the Bar A before being processed locally.
In addition to the cow/calf operation, the Bar A's bottom line depends on its sale of high-quality horse hay to customers on the Front Range as well as subleasing pastures on public lands for which the ranch holds leases to other ranchers.
Those revenue streams have been significantly impacted by the drought, Shoemaker said. The U.S. Forest Service and the Bureau of Land Management already have sent letters to leaseholders alerting them that this summer they won't be allowed to graze as many cattle for as long as they have in the past. It's a step the federal agencies are taking to protect the long-term health of the range, which already has been hammered by one season of extreme drought.
"This year, we're not going to take any outside cattle at all," Shoemaker said.
From flood to drought
Monger said ranching conditions changed dramatically in autumn 2011 and the adversity only built throughout 2012. 2011 saw flooding on the Elk and Yampa rivers during spring runoff, but all of that moisture produced an abundant hay crop. Ranchers had no way to know what lay ahead.
"We went through (summer) 2011 and everybody was doing great," Monger said. "We had surplus hay, and we were selling it in Texas and New Mexico. Fast forward to 2012, and it turned out horrendously bad. We had no snow on the ground in the fall of 2011, and the surface of the hay meadows froze. What little snow we had that winter didn't percolate into the ground when it ran off. Calving season was good because of the lack of moisture, but we didn't have any rain to help with the spring grasses nearly until June."
Dry-land hay withered, and the rivers sank to their lowest flows since 2002. The scarcity of precipitation and high demand produced poor hay yields.
So as they watch their hay meadows dry out unusually early again this spring, they must decide, "Should I sell some of my cows now while prices remain strong, or should I take a calculated risk and bet that I'll be able to purchase enough extra hay to maintain or even increase the number of mother cows I feed?"
Some Northwest Colorado ranchers were shipping cattle by June last summer, Monger said. Some cow/calf pairs went to states like Arkansas before prices hit a midsummer swoon, Monger said. But he and other ranchers had different plans.
Hope springs eternal
Rancher Mary Murphy, who looks after 300 mother cows in the rolling hills between Hayden and Craig, made it through last summer's drought by feeding her livestock high-quality hay that she typically would be able to sell for additional cash flow in a season of abundant water.
Murphy — clad in a long-sleeved camouflage shirt and with hair secured in short, blonde braids — is a rarity. There are many women ranchers in Northwest Colorado, but few who are the primary ranch operator. Her 21-year-old son, Murphy Smart, and another young man, Erik Sundberg, 22, who has worked on the ranch since he was 14, are her only hands.
Murphy is plenty tough enough to tackle the rugged chores that must be done on a ranch but also shows a maternal touch while checking on the newborns from the saddle of an all-terrain vehicle.
Pausing during her regular rounds to check on the mothers and their newborns, Murphy stoops to encourage a twin calf to its feet.
"Come on, little one," she cooed, just as though she were talking to a human baby.
But Murphy knows the day will come when she must separate the twins and graft one of them onto a cow who has lost her calf to ensure maximum weight gain for both calves.
"I feel bad thinking about splitting because I know how much they love each other," she said.
Not only do the cows seem to know and trust Murphy, she knows all about them and even their ancestors.
"I can look at any of these cows and tell you what their grandmothers did," Murphy said. That is to say, she knows their record of producing strong calves year in and year out that were able to gain weight quickly. She also knows if they had a natural tendency to be good mothers.
Murphy — and her late father, Lawrence Murphy, before her — has devoted significant acres of the ranch to wildlife habitat, and large numbers of deer and elk roam the hills along with a modest number of pronghorns. And the Murphys have participated in Colorado Parks and Wildlife's Ranching for Wildlife program, which expands the opportunity to host private hunting on the ranch. For the first time last year, it was necessary to graze cattle on the wildlife habitat, and deer hunting was suspended to avoid further stressing the wildlife.
"We've been able to keep our cows at the expense of our wildlife and our hay income," Murphy said.
East for the winter
Doug Carlson, who raises Red Angus cattle along the Elk River near Clark, isn't contemplating reducing his herd. Instead, he's planning to add cows. His adult son, Danny, is becoming more involved in ranch operations, and with enough water, hay production and pasture to support more than his current 230 cows in a normal year, he is intent on building his herd from within.
Instead of selling cattle in the midst of the drought of 2012, Carlson came up with what he described as a creative swap.
"I sent my bred cows to Imperial, Neb., for the winter where there was an opportunity for them to graze on cornstalks," Carlson said. "It was the first time we've had to do that in 30 years. It was a gamble."
The risk was that the cornstalks left after last fall's harvest could have been covered in snow by a blizzard sweeping the plains. If that had happened, he would have been forced to buy more expensive hay for his cattle anyway. But the strategy appears to have succeeded.
It began when a neighbor ordered a semitrailer load of hay from Canada for a large herd of horses. Horses require higher-quality feed than do cows, and this load was a mix of grass hay and alfalfa that already was a year old. When it arrived, it wasn't what the buyer had hoped for. So Carlson stepped in and purchased the hay for well below the current going rate of $300 per ton for good hay.
At the same time, Carlson knew he was going to produce some outstanding hay from two key meadows along the Elk River. Reserving the Canadian hay for autumn 2012 and spring 2013, Carlson sold his own hay and broke even on the trip to Nebraska, where his mother cows dined relatively inexpensively on cornstalks through the winter.
Breaking even in this case was a big win. It meant he wouldn't have to ship any of his cows.
"It saved me from have to ship one or two truckloads of cows," Carlson said.
Instead of reducing his herd by 80 cows, he also was able to keep the replacement heifers he's counting on to build his herd two years in the future.
The pregnant cows returned to their home ranch on about March 14, appearing to be in fine condition, and that's important. Their overall condition will determine whether they are ready to breed later this season and whether their pregnancies take.
Researchers at Montana State University report that the biggest factor in the profitability of a cow/calf operation is the cost of feed, representing about 60 percent of the annual cost of maintaining a cow. But profitability also is directly related to the reproductive rate of the herd.
In that area, MSU reports that keeping a cow in good body condition at the time of calving plays a major role in the overall reproductive rate. Cows that are in good condition when they deliver newborns in the spring are much more likely to re-breed within 90 days and deliver a calf the next year.
Stewards of the land
Farmers and ranchers are stewards of the land as well as food producers, and the ongoing pattern of summer grazing on public lands and irrigation of grass hay meadows feeding cattle through the long winters have shaped the verdant landscape Routt County residents cherish. And everyone who pays property taxes in Routt County has a financial stake in the future of agriculture here through its voter-approved purchase of development rights program.
Since 1996, the county has collected 1.5 mills of property tax, which is used to leverage the purchase of development rights, with the participation of the owners, away from farms and ranches in order to help ensure those historic land-use practices remain in place.
According to Routt County records, 33,620 acres have been conserved with the help of a public investment of $17.7 million. Because the landowners, typically farmers and ranchers, donate a large portion of the appraised value of the land toward the assessment in exchange for tax benefits and working capital, the public cost to conserve those lands has averaged $526 per acre.
Longtime purchase of development rights board member Allan White has been so taken with the role cattle ranching plays in the Western landscape, he now cares for nine head of Scottish Highland cattle on his rural property.
"It just makes sense. It's what's best for the land," White said. "I remember CJ Mucklow explaining that cattle ranching is a system that is totally self-sustaining. Because the cattle have split hooves, they work the ground. Just by cattle grazing a piece of land, it's healthier. The whole cycle keeps the land healthy, and you end up with a product."
The future path that farming and ranching will follow in the Yampa Valley might be uncertain, but there's no doubt about the tenacity of its practitioners. ■