FORT COLLINS, Colo. — Recent trips to grocery stores bearing scarce shelves for residents in western Colorado are bringing back memories of the empty shelves during the initial outbreak of COVID-19 just one short year ago. However, recent flooding in Glenwood Canyon resulting in indefinite closures of I-70 in both directions is the culprit this time. Disrupted travel plans and detours are never enjoyable, but how will this affect those agricultural producers supplying the food to stock the shelves?
Agricultural producers and cattle ranchers are experiencing heavy amounts of stress and potentially high economic losses due to the compounding effects of multiple natural disasters (wildfires, drought, flooding) occurring within our state.
Transportation for agricultural products in the state of Colorado has always been tough. Mountains, canyons, steep passes, and extremely variable weather conditions pose logistical shipping problems for producers, especially in Western CO. In addition to a human pandemic, three of the largest wildfires ever recorded in Colorado occurred in 2020. The hillsides in Glenwood Canyon have bare slopes with hydrophilic soils and little vegetation due to drought and fire. Coupled with heavy rainstorms, these conditions have led to mudslides and flooding that have closed Glenwood Canyon for an unforeseeable amount of time, possibly until December.
Interstate 70 is the main route of travel for a vast majority of perishable agricultural products heading from the Western Slope to the Front Range, especially cattle, fruits, and vegetables. The livestock industry, specifically beef cattle, is the number one agricultural industry in Colorado, generating $3,989,383,000 worth of sales (2017 USDA Census of Agriculture).
CDOT is suggesting travelers and drivers use alternative routes via Highway 13 through Rio Blanco, Routt, and Grand counties, or via Highway 50 through Gunnison and Chaffee counties to avoid road closures. Either of these routes, depending on the starting location, can add anywhere from 80 to 150 plus additional miles to a driver’s trip. The alternative routes with single-lane highways were not designed to handle the traffic of I-70, causing up to five additional hours of travel due to increased traffic, accidents, and road construction. For agricultural producers hauling products, that is going to increase their costs significantly.
Hauling costs for cattle are charged on a loaded mile basis, ranging from $4.00 – $5.00. Plus, when they reach their destination, the cattle are sold based on their current weights.
Stress from hauling the animals for long distances can cause weight loss and shrinkage to the animal – this number can increase exponentially as additional hours are added to the trip. It is critical for livestock transport vehicles to remain moving to create good airflow for the health and safety of the animals. Farmers and ranchers already operate on very thin profit margins and high-risk factors, but closures of main highways such as this could be the difference between profit and loss this year. Coming out of an already tough year due to Covid-19 and the drought, this could be devastating. Let’s take a look at what impacts might occur for a cattle rancher in western CO.
A Case Study
Approach One ranch operation located in central, western CO with 400 – 600 head of cattle will be sending, on average, four to six truckloads of cattle via I-70 between now and December. One trailer holds between 48,000 and 52,000 pounds of livestock, which will mean different numbers of individual animals depending on their age and size. If the producer sends five trucks of cattle, at $4.50/loaded mile for fuel and other truck expenses, driving 115 extra miles around the closures, their additional hauling costs will total $2,587.50 per trip. Upon arrival for sale, each animal may lose additional body weight during extra time hauling. This is referred to as “shrink” but is regained once the cattle settle into their paddocks and resume eating and drinking at normal rates of consumption. A reasonable estimation is that each animal experiences an additional 1% shrink due to extra hauling time. Assuming the five trucks of cattle weighed 250,000 at departure and the animals are sold at the current feeder cattle price of $1.64/cwt, producers would lose an additional $12,657.52 for the entire shipment of the five truckloads between now and December. This brings the total estimated loss to $15,245.02 – but that’s not all.
On top of reduced sale costs, producers are now also battling higher input costs. Extreme drought conditions plaguing the western United States have left little pasture available for cattle to graze. Most ranchers are purchasing hay from other areas of the state and country including, eastern CO, NE, KS, OK, and others – most traveling here by truck via I-70. Additional charges will be incurred for hauling the supplemental feed along the detour routes.
Farm/ranch input costs have also been on the rise in the past year, due to Covid and other issues. Increased expenses for items such as fertilizer, seed, feed, medicines, and labor due to shifts of supply and demand are causing producers to spend more than budgeted for at the beginning of the year.
Some Perspective
Affected counties, including Mesa, Delta, Montrose, Ouray, Rio Blanco, Garfield, and San Miguel are home to 2,344 beef cattle operations of all sizes – from 1 to 1,000+ head of cattle, and there are most likely more that haven’t been accounted for in other counties.
The Bottom Line
How broad and long-term these economic impacts for producers and consumers will be is still unknown at this time. However, if you’re traveling on the road and see any trucks hauling livestock or other perishable commodities, give them some space, let them pass you or move to the front of the line in construction delays, and offer some grace to the drivers as you travel our beautiful state.
— Jenny Beiermann, CSU Extension Agricultural Economist
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