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Droughts are hitting cattle ranchers hard – and that could make beef more expensive

Cattle graze amid drought conditions near Ojai, Calif., on June 21. Drought in parts of the country have forced some ranchers to slaughter their cattle early, leading to a drop in beef prices that will only be temporary.
Mario Tama
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Getty Images
Cattle graze amid drought conditions near Ojai, Calif., on June 21. Drought in parts of the country have forced some ranchers to slaughter their cattle early, leading to a drop in beef prices that will only be temporary.

Supermarket shoppers are seeing something unusual these days: discounts in the meat department.

Steak prices have fallen in each of the last three months even as the cost of chicken, pork and most other groceries has gone up. But bargains in the butcher case are likely to be temporary.

Severe drought is forcing some cattle ranchers to slaughter livestock early. That's producing a glut of beef in the short term, but it's also likely to lead to higher prices in the future.

According to the U.S. Department of Agriculture, 60% of the nation's cattle are affected by drought, including Brady Blackett's herd of angus cattle, which graze in the high desert of south central Utah.

"The cattle have to travel miles and miles each day in 100-degree weather to get back out to where there's adequate enough forage, so it's tough," Blackett says. "Over the last couple of summers, we've actually had to haul water to the cattle because the springs just aren't producing enough water to keep up."

Not enough water all around

Blackett ordinarily relies on runoff from snowpack in the nearby Wasatch Mountains to irrigate the alfalfa his cattle eat in the winter. But thanks in part to a changing climate, snow has been scarce in recent years. He's been forced to turn to groundwater, which is rapidly being depleted.

"It's not looking good for the future, unless we're able to get some moisture and pull ourselves out of this drought," Blackett says, describing arid conditions in much of cattle country. "There were parts of western Kansas and eastern Colorado where the weeds weren't even growing."

John O'Dea raises cattle and hay in southwestern Nebraska. His hay crop this summer is less than half what it would be in a normal year.

"We had 200 acres we never planted because we knew it wouldn't come up," O'Dea says. "At our ranch, we've gotten two decent rains in the last 14 months."

Ground beef and steaks for sale are displayed at a grocery store in Redondo Beach, Calif., on July 13.
Patrick T. Fallon / AFP via Getty Images
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AFP via Getty Images
Ground beef and steaks for sale are displayed at a grocery store in Redondo Beach, Calif., on July 13.

Sending cattle to slaughter early

Without enough feed to get cattle through the winter, ranchers have been forced to send some of their animals to slaughter prematurely.

"We've liquidated a lot of our cows and a lot of neighbors have liquidated anywhere from 20 to 60% of their cow herds," O'Dea says.

That's resulted in more steaks on supermarket shelves, and a temporary drop in prices. But the savings for consumers are likely to be short-lived.

In a sign of ranchers' desperation, many of the slaughtered animals are breeding females — cows and heifers — so the next generation of cattle will be smaller.

The USDA reported more beef cows slaughtered in July than any month since recordkeeping began in 1986.

"Life has very few guarantees. But a cow or heifer that is slaughtered this year is guaranteed not to calve next year," says Wesley Tucker, a field specialist at the University of Missouri extension. "That means there's [fewer] animals coming down the line and less beef production in the future."

Ranchers also face rising costs

Ranchers have lived through this cycle before. A severe drought a decade ago led to a similar downsizing of herds. Ultimately, that resulted in higher prices for beef — which is an incentive for ranchers to try to hang on to at least some of their cattle now. Tucker warns, however, even if beef prices rebound, it may not be enough to offset ranchers' rising costs for everything from diesel fuel to fertilizer.

"I don't think the price of a tractor is going to go back down next year just because our weather improves," Tucker says.

In Nebraska, John O'Dea keeps checking the weather forecast for any sign of improvement. So far, he hasn't seen any.

"Basically, what we're doing now is trying to figure out how we're going to manage for next season because we know this season is a bust," O'Dea says. "I would bet that our first moisture will be blizzards this winter."

O'Dea also worries that shoppers, faced with high prices elsewhere in the supermarket, may have less appetite for steaks, even at a discount.

"It's definitely a struggle," he says with a rueful laugh. "We pay the same bills as everybody else and we're dang sure not getting rich out here."

Copyright 2022 NPR. To see more, visit https://www.npr.org.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.