The severe drought in California has created a problem for cattle ranchers, many of whom are selling their herds across state lines.
Reuters reports that as many as 100,000 cattle have left the state in the past four months alone. Nearly half of those, about 47,000, have headed to Texas. The rest will primarily go to Nebraska and Nevada.
The problem in California is the drought, which has caused the cost of cattle feed to spike. With feeding their herds no longer profitable, ranchers have little choice but to sell. Most of the animals will head to slaughterhouses outside the state.
For ranchers, the sale of their herds across state lines could have long-term implications. Normally ranchers sell off a portion of their herdbut keep a sizable breeding stock to continue their business. But thedrought has forced many to send even their breeding stock out of state.Assuming the drought ends, it could still be years until the herdsreturn to their former size in California.
One reason so many cattle, even those headed for the slaughterhouse, are leaving the state is the recent closing of a slaughterhouse in southern California. National Beef Packing in Brawley, CA turned down an offer by ranchers to give discounts worth $9 million in order to remain open. A spokesman for the company told Beef Magazine, “We have considered all of the alternatives but, unfortunately, the barriers to profitably operate the plant facility continue to exist.”
Industry expert Jim Robb says that even with the loss of the Brawley, CA operation, the packing industry still has excess capacity. “This is the further adjusting, rationalizing of the size ofthe processing industry to fit the size of the cattle herd andeconomics of the industry,” Robb told Reuters.
The size of the cattle population in the U.S. as a whole is at a 61-year low.