The effects of a devastating drought in the southern plains are rippling through Colorado's cattle industry, forcing ranchers to make tough decisions about the future of their herds.

In the parched southeastern quadrant of the state, ranchers are culling herds because prairie grazing grasses are, at best, dry and stunted.

At worst, they've disappeared in scenes reminiscent of the 1930s Dust Bowl.

That leaves cattle producers with the difficult choice of paying the soaring cost of hay or selling off their animals.

"It's pretty tough times right now," said rancher Bill Carwin, who runs about 100 head of cattle near the tiny town of Pritchett in far southeastern Colorado. "The grass is what puts the weight on the steers and calves, and there's just no grass."

Carwin said he's facing the prospect of selling his entire herd and waiting until the drought breaks to rebuild.

"You have to feed 'em hay or put 'em up for sale," he said. "And with hay at $250 a ton, it just doesn't pay to buy hay."

As recently as last year, hay prices hovered around $110 a ton.

Severe drought in Oklahoma and Texas is forcing a wholesale cattle sell-off that threatens to leave herd sizes at abnormally low levels for years to come.

Reduced inventories, coupled with rising demand for American beef in Asian markets, suggests a continued jump in already fast-rising beef prices at stores.

Retail beef prices rose to a record $4.49 a pound in August, according to the U.S. Department of Agriculture.

Further price increases are almost inevitable given reduced production from declining herd sizes, said Jim Robb, director of the Lakewood- based Livestock Marketing Information Center.

Robb and his researchers are projecting a 2 percent decline in the beef cow herd.

"That is huge," he said. "The drought has been a game changer. It has made the supply side very tight. I think we will continue to see record-

(The Denver Post)

The herd sell-off has produced a short-term increase in beef supplies, but not enough to override the longer-term trend of rising prices, said agricultural economist Norm Dalsted of Colorado State University.

Denver shopper Lucinda Williams recalls the days when she could buy an occasional rib-eye or T-bone. Now, value cuts are the norm.

"I'm a bargain shopper, and I'm not seeing many bargains in the meat section," she said during a recent trip to a central Denver Safeway.

Williams eyed a boneless round roast on sale for $4.99 a pound, but then moved down the meat case to pick up ground beef at $2.49 a pound.

"I guess I'm going with hamburger," she said. "That's all I can afford."

High beef and cattle prices are welcomed by ranchers, but they're not quite as good as they look.

The fast-rising costs of hay, corn and other feedstocks are reducing, or even negating, higher profit margins for cattle producers.

"Calf prices are good, but our input costs are just so high," said Gerald Schreiber, whose family has been raising cattle near Last Chance in Washington County for 101 years.

"Good prices are only good if you're able to realize them through the production cycle," he said. "Alfalfa is costing me twice what it did a year ago. The drought has just been a horrendous deal."

Colorado has been a tale of two climates. Rangeland north of Interstate 70 generally has enjoyed good moisture over the past year, while pasture south of the highway has withered.

Yet demand for hay and other supplemental feeds in drought-stricken areas has pushed costs higher for all cattle producers, regardless of their location and their region's precipitation.

Colorado dairy farmers have suffered from the same phenomenon. High hay costs are limiting industry growth at the same time that demand for milk is rising to serve the huge new Leprino cheese factory in Greeley that is scheduled to open Nov. 1.

Ranchers who have sold breeding stock because of feed costs aren't deriving much pleasure from selling at record-high prices, said Bruce Fickenscher, a range and livestock extension agent for seven southeast counties.

"Sure, they're getting good prices now," he said. "But when they rains return and they look to rebuild their herds, their replacement costs are going to be much higher than what they're selling at now."

Steve Raabe: 303-954-1948 or sraabe@denverpost.com