Reduced Crop Yields, Orchard Removals and Herd Sell-Offs — New AFBF Survey Results Reveal How Farmers and Ranchers are Dealing with Drought
Market Intel / November 3, 2021
With over 70% of the American West, Southwest and Northern Plains categorized in D3 (severe) drought or higher since June, AFBF has designed and distributed a second round of its Assessing Western Drought Conditions survey to evaluate drought’s continued impact on farm and ranch businesses. This Market Intel, part of a series of drought-focused articles, summarizes the results of the October survey. A summarization of June survey results can be found here. Past articles have also monitored state-specific hardships faced by farm and ranch families including: Arizona, Idaho, Oregon, Montana, Nevada, New Mexico and California.
The 11 states in Farm Bureau’s Western region, plus the Dakotas and Minnesota, are vital to the U.S. agricultural sector, supporting one-third, or $128 billion, of total U.S. agricultural production by value. This includes 31% of beef cattle and cows, responsible (in total) for 18% of U.S. agricultural production by value; over 45% of dairy production responsible (in total) for 11% of U.S. agricultural production by value; and over 70% of vegetables, fruits and tree nut production by value. Continued drought conditions put production of these commodities at risk, along with the stability of farms and ranches reliant on their crops and livestock for income.
To further quantify some ground-level drought impacts, AFBF’s second Assessing Western Drought Conditions Survey was distributed between Sep. 13 and Oct. 18 to state and county Farm Bureau leaders, staff, and farmer and rancher members in the affected states. The survey includes several demographic questions to distinguish state affiliation followed by three separate sections: Crop-Specific Factors, Livestock-Specific Factors and General Water Access. Each section consists of a set of issues farmers and ranchers may be facing because of persistent drought conditions (i.e., selling off portions of the flock/herd or reduction in planted acreage). On a scale of 0 (not at all prevalent) to 5 (extremely prevalent), respondents were asked to select how prevalent each issue was in their area based on their own experience or outreach with members. Each section also includes a dedicated area for further commentary.
The survey closed with 784 responses from 11 states in the West+ region. Figure 1 summarizes across state weighted percentages of respondents reporting a certain drought-related operational factor as prevalent or higher in their area; this includes participants who selected prevalent, very prevalent or extremely prevalent. Over 70% of surveyed producers rated the following as prevalent or higher in their area: a reduction in harvest yields; increases in local feed costs linked to drought; traveling long distances to acquire feed and forage; reduced surface water deliveries; and removing animals from rangeland due to insufficient forage.
Widespread, low-quality or insufficient forage means farmers and ranchers must look elsewhere for feed. One Montana producer stated, “I was unable to harvest even a single acre of dryland hay because the grass didn't even get tall enough to cut. I normally cut hundreds of acres in order to satisfy most of the forage needs for my cattle.” An Oregon producer commented, “The price of hay has more than doubled due to drought. For small operations like ours, we purchase hay. We have had to sell off stock to reduce numbers needing feed.” In Utah, farmers report they will not be able to sell alfalfa this year because they are going to have to start feeding their own livestock earlier in the fall. The pressure of scarcity increases feed prices, which cuts deep into operational revenues. Unproductive rangelands also led many ranchers to sell off animals early, with herd size expectations down 32% across the region. Producers also reported reduced weights impacting animals’ final sales value, with many traveling hundreds of miles to acquire feed at exorbitant rates.
Stand-out Comment from Wyoming Farm Bureau Member:
“I paid $275 a ton for round bales of native hay trucked in from Central South Dakota.”
Stand-out Comment from Montana Farm Bureau Member:
“We sold 70% of our herd of cattle and have dispersed the remainder throughout several pastures to reduce competition for resources. We also have had greater reliance on pipelines and wells; springs, seeps, creeks have dried up. Well levels are dropping precipitously.”
Forage attainment and quality issues are far from the only hit livestock producers have taken. Reduced surface water deliveries and increased reliance on groundwater are widespread, with regional surface water delivery expectations down a whopping 50% from 2020.
Nearly a third of respondents rated hauling water as extremely prevalent. Access to vehicles, fuel and labor to truck water up rough terrain is limited and costly. A Nevada farmer described, “I have had to feed more supplements to boost feed conditions and am getting more hay to feed for the fall and winter months. I am more worried about having enough water without hauling water. I don't have a good way to haul water.” Another from Colorado reported, “Had to buy an old water truck to haul water to cattle on pasture, ponds that always had been used were dry for the first time ever.” New well drilling is widespread and costly and does not guarantee access to reliable or usable flows. One California cattle rancher recounted experiences of drilling deep wells only to access water too salty for use.
Stand-out Comment Montana Farm Bureau Member:
“A number of my neighbors had their wells go bad this summer and were forced to drill new ones. Water is really deep here, so they are looking at $50,000 or more in added expenses in a year when margins are already going to be quite thin, or negative.”
Crop producers across the region have been far from spared. Average yields for the 2021 harvest season are expected to be 42% lower than 2020 yields, with the highest decline expectation, 64%, reported in Montana. In Utah, one sheep farmer who usually grows all the alfalfa needed to support the heard, plus extra, had to purchase hay at $275/ton. Another Utah wheat farmer wrote, “I had to till all my grain under. I tried to water it, but did not have enough water to do anything. I was able to get one crop of alfalfa on half of my alfalfa acreage. The conditions are extreme.”
Stand-out Comment from Idaho Farm Bureau Member:
“The lack of rainfall in the critical months for hay production reduced our yield by more then 60%. Hay production across the Northwest was way down, forcing producers to cull cow herds and sell at a significant loss due to market saturation.”
Orchard tree and multi-year crop removal was common in states with higher fruit and tree nut production. Forty-one percent of producers from California and a third of producers from Arizona reported destruction of multi-year crops as prevalent or higher in their area. For some nurseries, customers have put orders of plants on hold or even cancelled orders due to water shortages in their area. If there’s no water to support ornamental plants and shrubs, the nurseries that supply them are vastly limited in their ability to operate.
Stand-out Comments from California Farm Bureau Members:
"Reservoir from winter run-off was adequate for wine grape irrigation through July. Berry size was down, but otherwise the effect on the crop was modest. Reservoir is now functionally empty and there is no water for post-harvest irrigation. Peach acreage was seriously affected in tree health, fruit size (50+% smaller) and tonnage. Combined with damage to trees, we may have to remove half of orchard."
"We have further cut more avocado trees, 13 acres to 5. The water bill was almost double the money received for the harvested crop. More cuts will need to be made. One more year to see how the water situation works out and the decision will be made as to eliminate the entire grove. The neighbor had a deep well drilled, but the result was water too salty to use."
Farmers and ranchers have also faced increased pressure from local municipal water companies looking to reduce water consumption. Fifty percent of respondents rated increased local restrictions on agricultural water use as prevalent or higher in their area, with a high of 85% of producers selecting prevalent or higher in Utah, followed by 64% in California and 63% in Nevada. Operations reliant on local water storage infrastructure and everchanging flow allocation requirements risk closure on the basis of local policymaking.
Stand-out Comment from California Farm Bureau Member:
"Local municipal water company has cut ag another 10% and had rates increased. With increased minimum wage and lack of workers there are many more landowners doing irrigation work themselves and cutting irrigation cycle times. Big experiment in deficit irrigation for our tree crops."
A sad reality of drought, many multigenerational family businesses have closed because they were unable to make ends meet under persisting conditions. A Utah dairy farmer somberly reported, “I've sold my dairy animals after five generations of dairying. I’m unable to grow my own feed, super-high feed costs and lowering milk prices forced me out of the business.” Similarly, a California walnut producer wrote, “We sold the family farm due primarily to severe reduction in walnut prices and stress from water issues. My husband was a fourth-generation farmer.”
Some of those able to hold on are trying out different tactics to prepare for the spring planting season. Planting deep rooted perennial grasses and utilizing jet fan sprinklers, targeted drip irrigation and sophisticated water measurement systems to control irrigation timing are just a few farm-level tactics being implemented to counter drought.
Farmers and ranchers across the West continue to battle severe drought conditions. The ability to illustrate the severity of these conditions and their impact on agriculture with existing data is greatly limited. The results of AFBF’s Assessing Western Drought Conditions survey offer a window into operational-level hurdles farmers and ranchers face in coping with persisting water shortages. Most of these issues and adjustments negatively impact business income, putting the solvency of many farms and ranches at risk. Given the West’s vital role in providing over a third of American agricultural production by value, discussing and undertaking effective drought mitigation objectives is vital to a secure domestic food supply and to protecting our farm and ranch families.