How the drought creates chaos on ranches, dairy farms

SANTA ROSA >> Jennifer Beretta has been working as a dairy farmer since she was 6 and knows some of her family’s 700 cows by name. One of her favorites, a Jersey named Harmony, has won top prizes at the Sonoma County Fair.

“I raised them from when they were babies,” said Beretta, 33. “You get attached to them. They have personalities.”

But business is business, and right now business is bad. California’s devastating drought has dried up most of the Beretta Family Dairy’s pastures, driven up the cost of feed and made milking cows unprofitable. The Beretta family has sold off more than 40 of its cows this year and could sell more before very long.

“If you can’t afford to feed them, you don’t want to go into debt,” Beretta said. “It’s frightening.”

All over California agriculture, water sources are being reduced to a trickle. Fields have been idled and even some fruit and nut orchards are being dismantled because of shortages. The financial losses to agriculture are expected to be enormous.

California’s $50 billion-ayear farm economy is turning nightmarish. And nobody’s losing more sleep than the state’s dairy farmers and beef-cattle producers, who are scrambling for feed to keep their animals alive.

“It’s pretty much statewide,” said Tony Toso, a Mariposa County beef rancher and president of the California Cattlemen’s Association. “My goodness, there’s pastures out there that just look like moonscape.”

Raising cows for milk or meat is a $10 billion-ayear business in California — bigger than wine grapes, bigger than almonds, bigger than anything else in the agricultural sector. But because of the drought and faced with steep increases in the cost of feed — assuming they can find it — beef and dairy farmers are watching their profits disappear.

The result is, many are selling off animals at a pace rarely seen.

“We are absolutely seeing a liquidation of cows, particularly from the West,” said Don Close, who analyzes the beef market for agricultural lender Rabobank.

So far, the drought isn’t raising consumer prices, but that’s likely to change. In the meantime, ranchers and dairy producers are getting squeezed financially by higher costs.

“You’re going to have to cull your cattle,” said Tracy Schohr, a rancher and livestock adviser for UC Cooperative Extension in Quincy.

Her ranch sold 15 animals earlier this year.

A few ranchers are selling them all, including Greg Kuck, a beef producer in Montague, Siskiyou County, who recently agreed to unload his entire herd — numbering hundreds of animals — and retire.

“It’s been pretty hard on everybody, watching their ranches dry up,” said Kuck, 67.

Consumers have been paying more for beef the past few months, although the drought isn’t the reason why. Close said prices are being driven by bottlenecks in the packinghouse industry.

Where does the drought come in? Ironically, it could bring prices down in the short run. As ranchers and dairy producers cull their herds, more and more animals will get turned into hamburger meat, glutting the market.

But over the long haul, the situation will reverse itself because of the shrinkage in herd sizes.

“Culling cows now lowers the price for hamburger now and it means steaks will be more expensive two years from now because there are fewer calves,” said Daniel Sumner, an agricultural economist at UC Davis.

Consumer prices for dairy products have held reasonably steady. As it happens, there are plenty of dairy products — and dairy cows — even if feed prices are hurting farmers’ pocketbooks.

“This is one of the largest herd sizes since 1994,” said Ken Gott, president of Clover Sonoma, the big organic dairy processor based in Petaluma.

However, Gott said conditions should change before too long as farmers’ woes pile up and herds shrink.

“I would anticipate there would eventually be upward pricing pressures,” he said.

The effect could be fairly long-lasting. Anja Radabaugh of Western United Dairies, a trade organization based in Turlock, said the culling of herds is a process that can’t be reversed overnight.

“Once the herds are reduced you’re talking a couple of years before they get back up again,” she said.

Radabaugh added that some of the dairy cows — the ones not being turned into hamburgers — are being sold to out-of-state producers with better feed supplies.

“It’s a sad day for California when people are buying Texas dairy products,” Radabaugh said.

Dairy farmers in California get $7 billion a year for their cheese, yogurt and other products (Only about 11% of their products are