Drought sends California cattle to Texas

The beef industry in the U.S. is becoming increasingly mobile as cattle move large distances to feeding and slaughter

For decades, ranchers from the east have brought their livestock to California, where mild winters and lush natural pastures created prime conditions for fattening beef cattle.

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 head count 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 per cent 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.

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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.

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 two per cent 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.

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 per cent jump over the previous year’s first quarter, according to state Agriculture Department data.

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.

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