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RWP 23-06, June 2023

Drought has occurred with greater intensity and frequency in many areas of the United States in recent years. Despite the growing concern surrounding the impacts of drought on the agricultural sector, few studies have quantified the impact of drought on the cattle industry. In this paper, we estimate the impacts of drought on cattle herd management, hay production, hay prices, and farm income in the United States from 2000 to 2022. Our results indicate that drought negatively impacts hay production and results in higher hay prices. Drought also contributes to herd liquidation and is correlated with lower farm incomes. As drought intensity increases, we find some evidence of reduced average herd sizes (liquidation). As herd size declines, revenues temporarily increase, which could be due to selling larger quantities of market and breeding stock. Overall, drought has a temporary positive effect on rancher revenues, but a negative effect on earnings.

JEL classifications: Q10, Q13, Q15

Article Citation

  • Rodziewicz, David, Jacob Dice, and Cortney Cowley. 2023. “Drought and Cattle: Implications for Ranchers.” Federal Reserve Bank of Kansas City, Research Working Paper no. 23-06, June. Available at External Link


David Rodziewicz

Regional Research Senior Economics Specialist

David Rodziewicz is a senior economics specialist at the Denver Branch of the Federal Reserve Bank of Kansas City. His research focuses on energy economics, natural resource econ…

Jacob Dice

Software Engineer

Jacob Dice is a Software Engineer in the Research Facilitation group at the Federal Reserve Bank of Kansas City. He holds a M.S. in Computer Science from the Georgia Institute of…

Cortney Cowley

Senior Economist

Cortney Cowley is a senior economist in the Regional Affairs Department of the Federal Reserve Bank of Kansas City. She also serves as a special advisor on the agricultural econo…