Rob Sabo

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November 22, 2010
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World economics could impact Nevada cattle ranchers


Faraway woes severe flooding in the nation's Corn Belt in June, a severe drought in Russia that's greatly reduced that country's wheat production could spell financial trouble for Nevada's cattle ranchers, says an agricultural specialist at the University of Nevada, Reno.

Mike Helmar, a research associate with UNR's College of Agriculture, Biotechnology and Natural Resources, says both events will contribute to higher feed prices for the nation's beef producers, who typically fatten feeder cattle to about 800 pounds before slaughter. As producers' profit margins are squeezed by higher grain prices, Helmar says, they sell off cattle to packing and slaughterhouses, and an oversupply of beef will result in lower prices for suppliers of feeder cattle.

Silver State ranchers still are enjoying strong prices for calves headed to feeder lots, about $107 per hundred pounds through November. In November of 2009, Nevada ranchers received about $94 per hundredweight.

Tom Harris, professor with the College of Agriculture, Biotechnology and Natural Resources, says it's a fallacy to think ranching operations in rural Nevada aren't affected by world economics.

"If large cows are having price decreases, it will come back on us," Harris says. "Right now prices are good, but they will be impacted by live cattle prices."

Ron Cerri, a third-generation Nevada rancher who runs about 450 head of cattle at his Rebel Creek Ranch in Orovada, says this year has been profitable and feeder prices have largely held up through the recession. The weakened U.S. dollar has allowed the country to be more competitive with other beef exporters, adds Cerri, who serves as president of the Nevada Cattlemen's Association.

"Now we almost are able to compete with Australia and other countries in exporting to China," he says. "The cost of our beef is not much more than Australian beef."

As of Jan. 1, there were 450,000 head of cattle and calves on Nevada ranches. Due to its lack of rainfall to produce natural forage, Nevada typically ranks about 35th or lower among the 50 states in overall beef production.

Little beef is butchered in Nevada due to the high costs of fattening steers; instead, Nevada is known as a cow-calf state, where cows are raised to birth calves, which are sold when they reach 450 to 600 pounds to markets in California or the Midwest for additional fattening.

Ron Torrell, a former agricultural specialist with UNR who now raises registered Angus cattle and sell bulls to commercial operators, says Nevada cattle ranchers also sell market-ready cows that are about 10 years old and have typically given birth to eight calves beginning at age 2. These cows are largely harvested for hamburger, and Nevada ranchers typically have a 10 to 20 percent replacement rate per year.

Lastly, there is a small market for yearlings that are held over for the winter and put on grass for fattening before being exported to feed lots.

Torrell says today's ranchers produce more consumable meat with smaller herds due to improved management practices, genetics, and pharmaceuticals.

"Financially we are doing pretty good," he says.

Cerri says Silver State ranchers are being squeezed by higher fuel, power and insurance costs, as well as from anti-grazing groups that want to remove cattle from public lands.

"We are not by any means getting rich, but we are keeping our heads above water," he says. "In Nevada we rely so much for beef production on public lands; being able to continue to use public lands to keep a viable operation is a major issue."

And Nevada's open ranges are so vast, Cerri adds, that ranchers incur high costs for transportation of horses, riders and fuel to manage their free-grazing herds. Water rights also weigh on the mind of Nevada ranchers but reduced population counts in southern Nevada due to the lack of construction there has reduced the demand for water from other areas, he says.

"We work hard to try and at least maintain for agricultural uses the limited water that we have," he says.


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Northern Nevada Business Weekly Updated Nov 22, 2010 12:00AM Published Nov 22, 2010 12:00AM Copyright 2010 Northern Nevada Business Weekly. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.