Ranchers face tough decisions about herd sizes following another year in drought

Another year of drought has prompted tough decisions for ranchers as they decide how many cattle they can feed over the winter.

Last year’s drought forced many Montana ranchers to reduce their herd sizes because of challenging growing conditions and the high cost of hay. This year, similar conditions have dampened hopes of rebuilding herds in some parts of the state — leading agricultural economists to highlight considerations for ranchers as the days grow colder.

From 2021 to 2022, Montana saw a reduction in its cattle inventory by 250,000 head — nearly 10% of the state’s cattle. Other states experienced similar declines, but Montana’s herd reductions were the largest in the country.

Montana was hit the hardest because of the severity of its drought, and more herd reductions this year can be expected, said Eric Belasco, professor of agricultural economics at Montana State University.

While there are some rebuilding opportunities for herds across the state this year, the conditions aren’t there to replace that 10% reduction, Belasco said at an MSU agricultural economics conference on Friday.

The last time cattle inventories fell that much in Montana was a 17% drop in the mid-1980s, Belasco said.

In order to rebuild a herd, ranchers need to have enough hay to feed their cows and calves through the winter. But the drought has hit hay production and driven hay prices to the highest they’ve been in 30 years, Belasco said.

Without enough hay, the options ranchers have are limited: buy expensive hay from someone else or sell some of their cows.

Montana agriculture is still recovering from ranchers liquifying herds last year, and another year of drought conditions and high hay prices isn’t helping, experts say.

But the drought has persisted in a patchwork across Montana, hitting some areas harder than others. North-central Montana has faced some of the worst drought impacts in the state this year.

Marko Manoukian, extension agent for Phillips County, said the county had some 53,000 mother cows last year, but now that number is around 24,000. Mother cow counts are integral to herd sizes because they add calves to the herd the following year.

While the drought situation overall is better than last year, Phillips County water storage for agriculture is worse off, Manoukian said. As of Monday, the water in county reservoirs and pits used for livestock was probably 90% empty, he estimated.

Ranchers saw a little more grass production this year, but some areas in the county only had green pastures for less than three weeks, Manoukian said. Some ranchers got one cutting of hay this year, while others have been shipping in hay from North Dakota. Grasshoppers also took a toll on the area’s already limited supply.

Ranchers here were in three camps, Manoukian said: people who hauled water tanks to livestock in summer pasture, people who used wells, and people who decided to depopulate their herd.

“This is the result of years of drought stacked on top of each other,” Manoukian said. “It’s a conundrum.”

As of Monday the majority of ranchers still had cows out on summer range.

“We’re nearing the end of that, but ranchers are trying to hold off feeding hay until absolutely necessary,” Manoukian said.

As winter approaches, many Phillips County ranchers are holding onto the cattle they still have left. But if spring comes and more moisture hasn’t improved the drought and reservoir levels, ranchers will face another round of herd liquidation, Manoukian said.

The outlook has prompted agricultural economists to advise ranchers on what to consider in these decisions.

Belasco’s talk on Friday highlighted government compensation for lost or expensive feed, which can help producers maintain cash flows and rebuild herd sizes.

The Pasture Rangeland and Forage Program and Livestock Forage Protection of the USDA both saw increased participation in 2022, Belasco said.

Ranchers should also prepare for the tax implications of temporary high revenue levels from selling unanticipated numbers of livestock, Belasco said. They can also track the futures market and consider cattle and hay prices to determine whether to sell hay or use it as feed.

Belasco concluded his talk with a practical message.

“There is no way to avoid drought, but you can prepare for it,” Belasco said.

Isabel Hicks is a Report for America corps member. She can be reached at 406-582-2651 or [email protected].