Ag industry holding on tight

Alfalfa production and cattle sales up, but producers say a shakeup is underway

Editor’s Note: This is the first in a three-part series on the agriculture industry in Tooele County. This piece examines the industry’s economic impact, both currently and over the past several decades. Articles next week will examine the industry from cultural and political angles.

On a cold morning in Skull Valley when the sun is just peaking over the Stansbury Mountains, employees of Ensign Ranch feed thousands of cattle, vaccinate sick cows and oversee operations at a feeding yard where approximately 4,700 cows are currently held. It’s work that would have looked similar a century ago. Yet it’s a side of Tooele County that often goes unseen — and perhaps unappreciated.

Agriculture remains a vital industry in the county, and despite concerns about feed costs, ethanol and marketability, the industry seems to be holding steady, according to experts.

Tim Neil, who has worked at Ensign Ranches since 2000, said, “You have bad years and you have good years. It goes up and down, but in the end it’s status quo.”

Those expectations are good enough to keep many farmers and ranchers in the business. Darrell Johnson is a seventh-generation rancher in Rush Valley with two sons involved in his cow-calf operation.

“I think there is a future in agriculture,” he said. “People have got to eat and I think that there is a future in agriculture for young people that want to be involved in it.”

Statistics provided by the U.S. Department of Agriculture’s National Agricultural Statistics Service seem to echo that sentiment. They show a fairly steady number of cattle over the past eight years in Tooele County, while there has been an 18 percent increase in alfalfa production — the county’s largest cash crop — over roughly the same time period.

Ranching is a bigger business. According to the 2007 Utah Annual Statistics Bulletin, a publication issued each fall from the Utah office of the USDA’s statistics service, total cash receipts from farming in Tooele County in 2006 — the most recent year for which data is available — totaled $27.9 million, of which $4.4 million were from crops and $23.5 million were from livestock and livestock products. That represents a 67 percent increase over 2001 total receipts of $16.7 million.

However, Leland Hogan, a Stockton rancher and president of the Utah Farm Bureau Federation, cautions that rising receipts don’t always equate to rising profits.

“The value of products has gone up, but so have the inputs to agriculture,” he said. “The difference between those two has probably lessened.”

Hogan said the industry has always fluctuated with changing economics and weather conditions. He cites the size of cattle herds as an example.

“Those numbers fluctuate on a regular basis,” he said. “In the industry there’s a culling-and-building process and it goes on on a regular basis.”

In the 1980s, cattle herds fluctuated between 18,300 head and 25,000 head. In the ’90s, they fluctuated from 17,000 to 22,000. And from 2000 to 2008, they remained steady at between 25,000 and 28,000 head.

Hogan said a slight decrease over the past three years in head of cattle could possibly be attributed to drought in the county, which reduces available feed.

“If there’s not available feed, the cull — cows that go to market early — numbers increase, and that could be happening,” he said.

In contrast, alfalfa production is back on the increase in the county.

In the 1980s, alfalfa production in tons decreased each year and acres of alfalfa harvested, while not in decline every year, declined steadily to a 10-year low of 11,000 acres in 1989. In the 1990s, alfalfa harvested bounced up and down before settling at 12,000 acres harvested in 1999 — the same number in 1990. Alfalfa production also bounced up and down before settling at 49,000 tons, which was 6,000 more than production in 1990. So far in this decade, alfalfa production is at a 25-year high with 57,000 tons produced on 16,000 harvested acres in 2007 — the latest year data is available.

“That’s probably increased because the value of the crop has increased,” said Hogan. “If you can get a little more value out of the crop at harvest time, it encourages you to plant a little more.”

Some locally grown alfalfa is used by farmers and ranchers within the county, but the majority is sold outside the county.

Hogan said there has been a real push to improve ranges in the cattle industry, which can be done by removing junipers and planting grasses. Those improvements, he said, have increased carrying capacity and water availability, as well as water quantity and quality.

“Things are better today than they were 50 years ago,” he said.

Hogan said if there’s availability of range, there will be cheaper feed. However, if feed has to be purchased, it is very expensive and can cause cattle numbers to go down.

Rick Kestle, director of the USDA’s Utah National Agricultural Statistics Service, said cattle herds may still decline further.

“Because the cost of food and fuel is so high and prices of cattle have come down somewhat from a couple years ago, the herds may actually come down again when we do the next survey in January,” he said. “But that can change. In a year or two there will be economic reasons to bring more cattle back in. Hay prices and fuel prices may fall. Those are really the conditions that drive it.”

Feed and fuel prices have had a significant impact on the industry, both with crops and livestock.

“It’s had an impact on our ability to put crops in,” said Hogan. “In addition, we raise mother cows who have calves then market calves to places that aren’t local, for the most part,” he said. “So it costs to ship those cattle and the economics have to be there in order to accomplish it.”

Johnson said the input costs to operate just keep rising. On Tuesday, he shipped steer calves to Texas where they will be finished for beef.

“Our cattle are bringing in less per pound than they have in previous years,” he said. “Our cow herd numbers are staying approximately the same, but the price we’re receiving for our calves is less than what’s it’s been in past years due to the cost of corn and the cost of fuel for transporting the calves.”

He said the use of ethanol has tremendously increased the cost of feed.

“The cattle feeding industry was based on corn production and since our politicians have decided they’ve wanted to make ethanol of it, it’s tremendously increased the cost,” he said.

Despite these challenges, Kestle says agriculture is far from a dying industry, but rather one whose future players are unknown.

“It’s not going to go away. It’s going to stay there. It’s going to stay important,” he said. “The only question is who can survive doing it? The big guys can take a loss this year cause they can recoup next year, but the small guys can’t do that.”

Kestle said he’s noticed a trend in Utah and throughout the nation of more small farms, fewer mid-sized farms, and an unchanged amount of large farms.

According to the USDA, a farm has been defined as “any establishment from which $1,000 or more of agricultural products were sold or would normally be sold during the year.”

Hogan said the reason for more and more smaller farms is that people with smaller farms can have off-farm jobs to supplement their income. He thinks mid-sized farms are disappearing because the work involved on them is too time consuming to have an off-farm job, which is necessary these days.

“So what they’ve had to do in order to satisfy family needs is to get a job off the farm and decrease the size of the farm,” he said.

Joe Thackeray, ranch manager at Ensign Ranches, said larger operations have an advantage over smaller mom-and-pop operations in that they can weather down markets better.

“They figure seven out of 10 years you’re going to make money,” he said. “But you don’t know if those three years will be back to back. That’s what makes it tough on the small guys. If those years come consecutively, it’s really difficult for them to weather the storm.”

Hogan said agriculture is very resilient and even though there are bad years along with the good years, it always bounces back.

“The bottom line is it is a viable economic entity, and it’s very important to the state — more than people realize,” Kestle said. “It’s very significant and it’s going to continue to be. Ag will not die in this state.”


Source: tooeletranscript.com