Drought conditions, prices push Arizona cattle growers to sell portions of their herd

Cattle sales have grown for the past year in Cochise County, but some ranchers say it might not be for the best.

Nearly 61,000 head of cattle were sold at the Willcox Livestock Auction in 2023, coming from ranchers in southeastern Arizona and southwestern New Mexico. That's about 40% more than the year prior.

The difference is tied to sustained drought conditions that have pushed cattle growers to sell portions of their herd, several ranchers told The Arizona Republic. Others say the cyclical nature of the cattle market and high demand are pushing sales nationally.

Ranchers earn their main income from selling calves. Mature cattle keeps the business going, so when the growers are forced to sell those older animals because rains were a bust and there wasn't enough pasture to go around, it can hurt their operation.

"A lot of us are trying to hold to our base herd. That is very hard to replace," said Richard Searle, a lifelong rancher from Pearce and former county supervisor. He was forced to sell all his cattle around 2003 because of the drought, and said it took him about seven years to get back into business after letting go of the herd and land leases.

In Cochise County, the auction stockyard was at capacity last fall, and operators had to turn sellers away. It was one of the driest summers on record and hit whole regions, like areas of southwestern New Mexico, where there was no rainfall at all.

This year is looking better so far. The monsoon has brought over 3 inches of rain in some rangelands and the Climate Prediction Center forecasts above average precipitation for the region, a sharp turn from last month, when the prediction was for below-average rainfall.

"It's enough to hang on, it's enough that is taking the pressure off and the worry away," Searle said. The next two months will be decisive to make up for last summer's drought. "It's going to take a while for the country to rebound and regrow."

It's also too early to tell how much of the herd growers let go this year. Clay Parsons, from Marana Stockyard, says sales due to bad summers come about a month or two after monsoon rains are supposed to hit. The Willcox auction has sold so far over 23,000 head of cattle.

The nature of ranching

For men and women ranching in the Southwest, drought has always been something to manage.

"I just assume every year is going to be a drought, and I'll just be pleasantly surprised when it isn't," said Andrew McGibbon, owner of Santa Rita Ranch, east of Green Valley. He runs a Red Angus cow-calf operation over a mix of state, federal and private land in Pima and Santa Cruz counties.

Ranchers must manage cattle numbers and pasture grounds through the rollercoaster of wet and dry years, adjusting how many animals go into a section of land, rotating and leaving grazing reserves, and sometimes downsizing herds. They fare better when leasing a diversity of plots, scattered around, because not all areas get the same rain.

"It doesn't get you through all the droughts but it helps," McGibbon said.

Andy Smallhouse, from Carlink Ranch, in Redington, remembers his family had to cut back nearly 70% of their herd in the early 2000s drought.

"I had to start like 10 different businesses to keep the ranch going," he said.

They've since expanded and leased more ground, grew forage, begun direct marketing and invested in their herd genetics to a point that they are not in trouble. But it's not easy. Ranchers must make a living through droughts, the uncertainty of the market and the regulations to work on public lands, he said.

"You have to really love it. It's more of a lifestyle."

Arizona has seen some good wet winters, which can make pasture forage last until July, when monsoon storms are supposed to come in. But even with that and with the optimism of nearly full reservoirs, the region is still in a drought, which is evident on groundwater levels, said Mike Groff, a meteorologist working for Western Ag Life Media.

This year's outlook predicts moderately strong La Niña conditions for winter, which typically means below-average precipitation for this region. Ranchers hope those forecasts are wrong "but gotta prepare as if they are not," Groff said.

High market prices from drought elsewhere

Cattle prices are also at a record high, another good reason to sell, said Lauren Scheller Maehling, executive director of the Arizona Beef Council. Nationally, the cattle inventory is at its lowest since the 1950s, so there is much demand.

Ranchers could be seizing an opportunity now that the market is good to offset high production costs or because they are coming close to retirement age and there isn't a next generation to take over, Scheller and Smallhouse suggested.

But high prices are also a product of drought.

For the past two years, a dry spell decimated herds in Texas and Oklahoma, which produce about 22% of the cattle in the U.S., said Russel Tronstad, a University of Arizona professor and extension specialist who works with ranchers on marketing and risk management.

"They weren't even able to maintain their herd sizes."

Texas lost as many animals as Arizona's total herd, about 180,000 head, or 0.5% of the national inventory, he added. That is creating new demand and makes this "a great time to be a cow-calf producer" because of the profits.

Drought in Arizona and New Mexico doesn't affect the overall cattle market. But ranchers face the brunt anyway.

Last year was a record-hot summer. Dave Ogilvie says it was the worst in 30 years to grow grass.

Ogilvie, an Arizona native, ranches just outside Silver City, New Mexico. South of him, many ranchers bordering Cochise County had to completely sell out and send their herds at the Willcox auction or at the Clovis, New Mexico, auction. He had to downsize to 60% capacity to adjust to the below-average rains.

"In our operation," he said, "that is significant."

While some ranching operations in the east can jump in and out of the market, western ranchers can't gamble with selling their mature cattle and then trying to get them back when conditions improve, he said.

"If everyone sells out we'll have to bring them from elsewhere. They'd have to acclimate," said Searle, from Pearce.

Ogilvie, in the high desert of New Mexico, says at U Bar Ranch they don't buy cows, not even from Willcox. "Those cows are a product of where they were born and raised," he said. "If you bring cows from afar, they have a terrible time adjusting to the new environment."

Raising them is a long process, which is another reason why the market will be good for some time. With the loss of cattle inventory in other areas, there is a "biological lag" for new cattle to reach the market, Tronstad, the UA professor, said. Cows generally have only one offspring a time, and calves take two to three years to reach reproductive age. This biological lag has played out in market for decades. It repeats every 10 years or so.

"What happened two years ago is having a big impact on the prices right now," Tronstad said.

Clara Migoya covers agriculture and water issues for The Arizona Republic and azcentral. Send tips or questions to clara.migoya@arizonarepublic.com .

This article originally appeared on Arizona Republic: Drought conditions, prices push Arizona cattle growers to sell portions of their herd