Dry Winter Ropes Ranchers

The dry winter has left the Bay Area beef business parched. With precipitation about 50% below normal, and long stretches of cold, rainless days through mid-March, "the grass has just stalled," says Kevin Maloney, who has 60 head of cattle on his Fallon Hills Ranch in Tomales, near the Marin County coast. As a result, cattle grazing in pastures from Sonoma in the North Bay to the rangelands of San Benito County south of San Jose spent much of the winter picking over brown stubble and subsisting on baled hay rather than munching the lush green grasses that typically blanket the hills. These tough conditions are eating up profits in an industry undergoing big changes. Over the past decade or so, some Bay Area ranchers have ditched the old wholesale beef business—in which ranchers raise cattle for a year before selling them to feedlots—to sell directly to restaurants and consumers who pay a premium for local, grass-fed beef. Direct selling has boosted profitability, ranchers say, but higher expenses and slower cattle growth rates this winter have taken a toll. To feed their herds, ranchers bought hay at double the typical market price, leased additional rangeland, or cut the size of their herds. "It's probably costing us from a quarter to a third more to produce a steer now," compared with last year, Mr. Maloney says. Cattle farmers in the North Bay, East Bay and South Bay say profits this year will be down 10% to 50% from last year...more