With the national cattle and dairy industries in turmoil as huge swaths of the United States suffer the worst drought in decades, local cattlemen and dairymen are glad to have a little insulation.
”Thank goodness we're in the coastal zone and there's still green grass,” said Lawrence Dwight, second vice president of the California Cattlemen's Association.
But Humboldt's ranches and dairies are far from completely immune from the fallout of the worst drought in 60 years, as plummeting grain yields are driving up feed prices and flooding beef markets. Local consumers may also soon feel the pinch, as the U.S. Department of Agriculture recently reported that Americans should expect food price hikes of 3 percent to 4 percent next year, with beef prices going even higher. Poultry and egg prices are projected to rise 3 percent to 4 percent, while dairy prices could climb as much 4.5 percent.
Economists say the food price spikes will be deeply felt.
”American families already have stretched their budgets because of the tough times, so these price increases will hurt harder than they would have five years ago,” Ben Senauer, a professor of applied economics at the University of Minnesota, told this newspaper. “Broad areas of this country are drying up as we speak. This is not being exaggerated at all; it's bad out there. And with every day of high temperatures and no rain, it's getting worse.”
While California farmers depend more on irrigation than their counterparts in the Midwest and are therefore less at the mercy of weather, the trickle-down effects of this historic dry spell are already playing out up and down the Golden State, with dire consequences expected. Dairy farmers, in particular, are struggling with rising feed prices, which could drive up the shelf price of yogurt, cheese and milk.
Some areas are being extremely hard hit.
At Western Farm Supply in Fresno, co-owner Vicki Rasmussen has seen Midwestern corn prices rise more than 30 percent in the past month, with a five percent jump last week alone. “And since corn is the main staple for livestock, including poultry and dairy cattle -- and even cat and dog food -- everything is being affected,” she said. “As a result, some farmers in our area will end up losing their dairies.”
But, as Dwight said, ranchers and dairymen in Humboldt County at least have the benefit of green fields for their cattle to graze on. The larger fear seems to be the drought's impact on the national market.
The drought-driven hikes in the price of corn, soy and other feed has already prompted cattle ranchers to cull their herds, driving down the price of beef products for the immediate future but likely jacking up prices six months from now.
Humboldt Auction Yard Manager Leland Mora said most local cattle are shipped to the live cattle market to be sold, but an early increase in the supply of cattle shipped from other parts of the country coupled with the added feed costs could make it harder for local ranchers to sell their cattle that would normally go to the MIdwest and Northwest.
The immediate result is that as feed prices rise, the prices ranchers can get for their herds are falling.
After the stressed corn crop began to falter earlier this summer, things just got worse by the day, with triple-digit temperatures that turned the heat maps of the United States crimson red. In a sad irony, corn production had been projected to hit an all-time high this season, approaching nearly 15 billion bushels, as farmers planted the most acreage in decades to lock in profits from the plumpest corn prices ever. Instead, experts say the brutal weather has already wiped out more than a quarter of that, putting losses on par with the damage seen in the 1988 drought.
By this fall, the realities of this far-off devastation could hit local consumers.
Those shopping at stores like Eureka Natural Foods and the North Coast Co-op might not see as drastic a difference -- as the stores specialize in California produce and locally raised meats. David Lippman, the Co-op's general manager, said he thinks it will likely be some time before price increases hit his store, but said the prospect is worrisome.
Lippman pointed out that the corn, soy and what that are in fields today will be harvested in the fall and manufactured in the winter. Right now, everything on supermarket shelves and being manufactured is from last year's harvest, Lippman said, pointing out that today's drought will be felt in tomorrow's checkout line.
While most local stores and restaurants say they haven't seen large price increases yet, all -- from grocery stores to the Tofu Shop to Los Bagels -- concede they are watching markets closely.
But none more so than local cattlemen.
”It's something we're very concerned about and watching,” said Dwight.
John Anderson, deputy chief economist at the American Farm Bureau Federation, said the current drought overshadows others in recent decades in size and severity.
”We expect the impact on feed prices to be widespread and significant,” he said. “We talk about most natural disasters, like a hurricane, at a fixed point in time where you clearly see what's happening. But that's not how a drought works. It's more like a natural disaster in slow motion.”
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