Reduce impact of drought on cattle and sheep ranching

A2WH Grow Dryland Reduces financial impact of drought on cattle ranching

Air to Water Harvest Airsolarwater.com

Impact of Drought on Ranchers

Drought hurts ranchers and herders by reducing the food supply they depend on which forces them to either sell their animals at a discount or buy abnormally expensive food both of which increase their costs or reduce revenue. This combination can cause a net loss for the year.

Multiple advisory groups are warning ranchers to avoid increasing their herd size due to risk of 2013 drought. Other articles are comparing the mid-west drought of the last few years to the 1950s. It not a question of if the next drought will occur but rather when which makes every decision to increase herd size in areas affected by drought a calculated risk.

It is a re-occurring theme where ranchers increase their herds through the good water years and just about when things are looking great a drought hits and they are forced to sell many of their animals at a substantial discount which costs them a large amount of their savings and profits for the year. Even a productive rancher can be threatened by multiple droughts which can impair their ability to pay mortgages and other debts which places their entire ranch investment at risk.

Emergency Financial aid too little / too late

USDA support and crop insurance can help recover some of the financial losses incurred by ranchers forced to sell their animals at distressed prices. Unfortunately this financial aid and even USDA’s additional grazing lands only partially offset the cost of the drought. They certainly do not cover the profit the farmer needed that year.

A new drought mitigation strategy needed

A new strategy that can reduce the ability of a drought to force ranchers and herders to liquidate their animals is needed. Crop insurance picks up part of the losses during drought but never covers the full loss and only arrives after immense pain and wasted effort of the farmer.

Permanently reducing herd size is not attractive

It is not economically attractive for ranchers to permanently reduce their herds to the drought carry capacity because they make their profit by the head. If they have fewer animals they make less money which they need to buy the next round of equipment, pay their employees and produce a viable income. As a result during the good years they will increase their herd which will increase their risk of repeated losses from the next drought. One senator calls Farming one of the riskiest investments due to this cycle.

A permanent solution is needed

A process which can permanently reduce the financial impact of drought is needed. The A2WH Grow Dryland process is one component of a plan to increase drought resilience by providing a auxiliary food supply which augments normal grazing foods during drought conditions. The Grow Dryland process can also increase grass yields during the good years which will increase their normal year profits.

The real value of water during drought

When a farmer it loosing animals due to lack of viable (cost effective) food the value of water A2WH can supply could be the entire value of his farm, land and animals which could easily run into the millions.

If the farmer cannot earn enough during drought years to pay the mortgage on his land and equipment it places his entire investment and quite often his life savings at risk. This allows the drought to destroy his ability to produce an income from the land and can force them accept sub-standard jobs in the city.

The A2WH Grow Dryland process is designed to act like a form of insurance but rather than providing financial relief after the fact the A2WH Grow Dryland process can help the farmer feed his animals through the drought and possibly even expand. In this way the rancher can turn drought conditions into an opportunity to expand and increase their income.

Unlike normal crop insurance which is a net cost during good years the A2WH Grow Dryland process can provide real tangible benefits every year. This comes in the form of nitrogen rich foliage that can be used as mulch or compost to improve the water retention and nutrient component of the soil for their prime grasslands. This has been shown by a number of studies to more than double grass production especially on marginal rain fed land. The increased grass yield will occur in all years but will be even more prevalent during low water years due to better moisture holding capacity. The increased grass yield will yield profits every year as increase weight for the cattle they sell. The Grow Dryland process is not intended to be used as a replacement for crop insurance but it may eliminate or reduce the need to make drought related claims against the insurance.

The Grow Dryland process was invented to create an auxiliary food supply for ranchers and herders that would provide a crop of edible forage during the worst drought. which can extend forage time and reduce amount of feed that must be purchased.

Drought Resistant alternate food supply

We felt the best way to mitigate the effect of drought was provide a cost effective means of growing an alternate fodder supply that was drought resistant and which would provide additional food on the same land during drought but could be used to increase nutrient loading and moisture retention during the good years to increase the total food supply.

Requires forward planning

The Grow Dryland process can deliver a critical component to reduce the financial impact of drought but it requires a multi-year investment by ranchers so they are ready for the drought when it occurs.

Carry herd through drought without weight loss

This extra food supply can provide the rancher with the ability to carry the herd for longer without the weight loss normally associated with reduced forage supply during drought.

Reduce need to purchase feed

The additional on-ranch food can reduce the amount of feed the rancher must buy while retaining a larger number of healthy animals which reduces the number of animals the rancher will be forced to sell at a discount.

Sell animals after drought at premium

If this extra food supply allows the farmer to carry the herd through to the end of the drought then they can sell the same animals at higher price as other ranchers who did not prepare attempt to restock their herds and drive prices up.

Use drought as cheap time to expand herd

Smaller ranchers who normally carry a minimal herd can focus on building the alternate forage supply during good years could buy distressed animals at auction possibly at a 80% discount compared to normal prices and use the additional food supply to nurse them back to health and resell a couple years later at the end of the drought at premium price substantially above normal price for those same animals.

A2WH Grow Dryland Benefits

              

• Produce of valuable crop on barren dry land
• Plant trees
• Forage Trees
• Desert tree planting
• Desert Forage management
• Starting trees in Desert
• Auxiliary animal feed
• Cultivate Land with no Irrigation water
• Grow tree species that normally could not survive
• Grow trees in locations where seedlings would normally die of thirst
• Revitalize desertified land
• Restore degraded land
• Reverse desertification
• Mitigate desertification
• Increase retained soil moisture
• Reduce soil erosion
• Recharge ground water levels
• Increase dryland fodder production
• dryland agriculture
• Cultivate dryland without groundwater

Need Water then use A2WH

• No Groundwater pumping
• No water permits needed
• No city or municipal water consumed
• No electricity needed
• No fuel needed
• Patented & Patent Pending

Extracting Water from the Humidity in Air

• Deploy in remote locations with no electricity
• Easily scalable to millions of trees
• Start at small scale with a few trees
• Deploy on land where there is no water.
• Airsolarwater.com creates Water from Air Using Solar Heat Energy

Use inexpensive dryland as part of the solution

The Grow Dryland process allows ranchers and farmers to plant forage trees on land where they would previously not have been able to survive. Since this can be done on land where no irrigation water is available the farmers can lease or buy inexpensive land for this purpose.

Produce 36,000 pounds of feed per acre on land with no water

It varies by climate but on many parcels it is possible to support 180 trees per acres as long as there is over 4 inches of rain per year. Once the trees are mature and depending on the species the edible foliage from 180 trees per acre can deliver 36,000 pounds of dry matter per year. These trees have very deep root systems so they will produce a viable crop of forage even during drought years. Some tree species can deliver several times more bio-matter but it can be a tradeoff between bio-matter production, early growth rates and timber values. In many instances the trees would only be planted along fence lines, ridgelines and other low production areas while leaving the primary grazing land available for grass.

Low effort process

This is a low effort and low resource process. When the forage is not needed it can simply be left in place or gathered into large composting heaps that can be used as mulch for the prime grassland.

Timber value can pay for entire system

Once every 10 to 15 years they also have a lumber harvest that could provide nice profit over the land and planting costs even if they never use the forage.

2.1 million $ profit from a single drought

A 200 acre parcel planted with this approach ends up producing 7.2 million pounds of edible dry matter per year. When budgeting 25 pounds per cow per day 7.2 million pounds is enough to feed 1,600 cattle for 180 days or 800 cattle for a year. This implies an ability to support 4 cattle per acre of from the new forage source which is considerably better than the grazing rates for non-irrigated parcels for many parts of Texas. The 2012 price in Austin was $3,000 per cow in a market where a couple years earlier they where selling distressed animals at $1700 which shows $1,300 difference in gross sales. If fodder trees from 200 acres allowed them to carry 1,600 cattle through to the end of the drought then it would be worth 2.1 million dollars in revenue they would otherwise have lost.

Dryland still cost effective

During 2013 a 160 acre parcel near Hudspeth Texas was selling for $59,437 or $371 per acre so the dryland is still cost effective. There is a planting cost for the A2WH Grow Dryland process but that cost is likely to be recovered from increased sales value of the land and is likely to be less than the likely return from a single drought. The increased grass growth from the nitrogen rich mulch will likely pay for the entire system and land from increased sale weight of the cattle on that land.

A2WH ideal in isolated locations

A2WH is designed for used in locations where there is a need for water and there is no surface water available, when common water sources such as new wells, recycling irrigation and municipal supplies can not supply the water needed.

A2WH ideal on land without water rights

A2WH is ideal in situations where ground water rights are not available or where pumping additional ground water would be cost prohibitive or risk over drawing the local water table. It is the ideal solution when droughts have drastically reduced the amount of water available and when it would be infeasible to desalinate the water at the coast and pipe it in.

Agriculture water is moving to Cities

As more and more water is taken from agriculture to support cities it will leave more fields that have been irrigated in the past without water. The A2WH grow Dryland process is designed to convert land where water is not available and where insufficient rainfall is present to grow a normal crop. It can allow large amounts nitrogen rich mulch which can also be used as a alternate supply of food for Cattle and Sheep. It can allow unproductive land to deliver a valuable crop and kept in productive use even after the water has been taken from this land for use in the cities.

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A2WH uses a proprietary process of extracting the humidity in the air and converting it into liquid water using renewable solar energy largely in the form of solar heat.    A2WH (Air to Water Harvest)  is a new generation of atmospheric water generator device AWG) which are also known as water maker devices (WM) and Water Air Extraction Devices (WAED). A2WH uses a revolutionary patented design that provides special characteristics that make it ideal for large scale deployment in situations where historic designs would be prohibitively expensive.

Cattle Reference Links

• USA Drought Monitor Notes and map – When looking for cheap land it would be good to check distressed land with rain fed grazing use in severe drought regions. This land should be selling at a discount after multiple years of severe drought.
• More drought in 2013 threatens Midwest farms – After worst drought in decades farmers throughout Midwest should brace for another round of hot dry conditions. S en. Debbie Stabenow, D-Mich., who heads the Senate Agriculture Committee 2012 “We all know that farming is the riskiest business in the world. Mother Nature certainty made sure we didn’t forget that.
• USDA extends emergency grazing to assist ranchers impacted by drought Livestock content from Southwest Farm Press
• USDA responds to farmers and ranchers affected by extreme weather Government content from Southwest Farm Press
• Texas cattle producers should remain de-stocked despite recent rainfall Livestock content from Southwest Farm Press
• New York Times John Eligon Oct-3 2012. – livestock producers, several of whom said they were losing tens of thousands of dollars a week because they were paying more to feed their animals. One family loosing $30 per pig they sell.
• With drought conditions similar to the historic drought of the 1950s, cattle producers should include drought planning into their planning. Livestock content from Southwest Farm Press – The A2WH Grow Dryland process was invented to create an auxiliary food supply for ranchers and herders that would provide a crop of edible forage during the worst drought. We felt the best way to mitigate the effect of drought was provide a cost effective means of growing an alternate fodder supply that was drought resistant and which would provide additional food on the same land during drought but could be used to increase nutrient loading and moisture retention during the good years to increase the total food supply. The Grow Dryland process can deliver a critical component to reduce the financial impact of drought but it requires a multi-year investment by ranchers so they are ready for the drought when it occurs. This extra food supply can provide the rancher with the ability to carry the herd for longer without the weight loss normally associated with reduced forage supply during drought. The additional on-ranch food can reduce the amount of feed the rancher must buy while retaining a larger number of healthy animals which reduces the number of animals the rancher will be forced to sell at a discount. If this extra food supply allows the farmer to carry the herd through to the end of the drought then they can sell the same animals at higher price as other ranchers who did not prepare attempt to restock their herds and drive prices up. Smaller ranchers who normally carry a minimal herd can focus on building the alternate forage supply during good years could buy distressed animals at auction possibly at a 80% discount compared to normal prices and use the additional food supply to nurse them back to health and resell a couple years later at the end of the drought at premium price substantially above normal price for those same animals.
• Costs and Returns for Cow-Calf Producers by Steve Metzger Carrington Area Farm Business Management Program. – Good cost analysis sheets for planning cattle projects.
• Reduced cattle herd could mean bigger profits starting late 2013 by Purdue Agriculture News – Illustrates how cattle prices bounce back as result of reduced herd sizes during drought. Also demonstrates how feed price changes can cause value per head to change.
• Texas cattle prices beefing up Ranchers rebuilding after drought By Ramit Plushnick-Masti Associated Press – demonstrates how the value of a cow post drought has risen from 1,800 pre-drought to over $3,000 post drought. It does not cover the fact that distressed cows a couple years previous where selling for under $800.
• The U.S. Drought Is Hitting Harder Than Most Realize By Chris Martenson PhD – High feed costs will have to be absorbed by producers who will likely liquidate part of their herds. Widespread drought has scorched much of the pastureland and hay fields needed to sustain cattle herds. 40 million ton shortfall on corn production despite record planting. 2012 drought combined with record setting July temperaturs.
• Texas cattle producers should remain de-stocked despite recent rainfall by Blair Fannin, Texas AgriLife Feb 27, 2012 –
• Cattle producers young and old should plan accordingly for drought Blair Fannin, Texas AgriLife Aug 16, 2013 – We are still reliving the 1950s drought-producing pattern with periodic breaks,
• Texas drought persists despite scattered rainfall Aug. 29, 2013 by Ron Smith – Despite scattered rainfall and some improvements in crop prospects, 97 percent of Texas remains in drought and reservoir levels continue to decline.
• Pasture and hay conditions key to beef herd recovery Jul. 9, 2013 Donald Stotts, Oklahoma State University
• Drought limits 2013 hay supplies Jul. 29, 2013 Vic Schoonover – top quality alfalfa hay selling for $220 per ton. With lower quality at $180 per ton.
• Relentless drought takes heavy toll for third straight year by Ron Smith Apr. 23, 2013 – persistent drought that has devastated cropland and pastures for the last two years and promises to do so again in 2013. It goes back to 2006 with drought in 2008, 2009, 20122 and 2012. Too dry for planted seed to germinate this year. Some farmer will cover part of losses using insurance. Less than 1% of land near Corpus Christi is irrigated so most depends on rain.
• Emergency loans available in 172 additional drought-hit counties Aug. 16, 2012 The USDA – To date, USDA has designated 1,792 counties as disaster areas — 1,670 due to drought. USDA is committed to using existing authorities wherever possible to help the farmers, ranchers, small businesses, and communities being impacted by the drought,” Vilsack also announced the availability of up to $5 million in grants to evaluate and demonstrate agricultural practices that help farmers and ranchers adapt to drought. USDA’s Natural Resources Conservation Service (NRCS) is taking applications for Conservation Innovation Grants (CIG) to help producers build additional resiliency into their production systems. NRCS is offering the grants to partnering entities to evaluate innovative, field-based conservation technologies and approaches. These technologies and/or approaches should lead to improvements such as enhancing the water-holding capacity in soils and installing drought-tolerant grazing systems, which will help farms and ranches become more resilient to drought.
• Poor forage conditions a challenge for U.S. beef industry May 14, 2013 Donald Stotts, Oklahoma State University 2013 inventory of hay is smallest since 2007 Many areas are beginning growth season with significantly worse pasture and range conditions. Total Hay stocks down 36 percent compared to prior 10 year average. In New Mexico 76 percent of ranges are in poor to very poor condition.
• Drought, feed costs influence livestock markets in 2013 Jan. 15, 2013
• Renovating forages in drought requires sound management Dec. 31, 2012 by Ron Smith.
• How The Severe Drought Will Affect Americans August 22, 2012 Counties in Kentucky and Nebraska have ceased irrigation. Farmers, ranchers and the public are all competing for the same diminishing supply of water.
  

  Government Programs

• USDA Disaster and Drought Assistance
• USDA Livestock Forage Disaster program
• Texas Panhandle Producers Face Tax Implications from Drought Related Losses

Contact us for more information

Call 206-601-2985. or Send our sales department an email.

(C)  A2WH.COM  -JAN-2009-  All rights Reserved This discussion contains forward looking statements which are based on current expectations and differences can be expected. All statements and expressions are the opinion of management of A2WH and are not meant to be either investment advice or a solicitation or recommendation to buy, sell, or hold securities.   Many of these statements are based on sound economic reasoning,  however actual response of the economy is heavily influenced by politics and large business and so the outcome could end up substantially different.