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Drought decimates Arkansas' famed cattle industry

(CBS News) SEARCY, Ark. - One by one, long cattle trailers in bright green and barnyard red slowly pull up to the Arkansas Cattle Auction. Folks with mud on their boots and cowboy hats on their heads unload their life's work. The cows trundle out into the waiting pens. A few hours later, they will be sold at a third their usual value -- if their owners are lucky.

The crippling, record U.S. drought has forced ranchers all over America to unload their stock sooner and at lower prices than they would probably like, a problem that seems likely to get worse before it gets better.

"He's run out of grass and he's selling the rest of this herd here today," explains the auction house owner Randy Goodman. "A lot of these cows are going to slaughter and that is sad."

We are looking at 25 longhorn cattle, many of whom are so thin, their hip bones look as sharp as their horns.

"A lot of them won't be back," says Goodman. "A lot of the older producers won't be back. They're going to give it up, get out of the cattle industry, and that hurts the economy around here."

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The extreme flash drought -- meaning it came on unexpectedly and isn't letting up -- is decimating Arkansas' cattle industry. Without grass to graze on, owners are having to dip into their winter hay if they have it, or pay $70 per bail of hay that in good times would cost $40.

For many it's too expensive to keep their cows. Inside the auction room, with the crazy-fast drone of the auctioneer echoing off the wooden walls, there is pain in the clinched jaws of the locals trying to sell the cattle they have worked years to perfect genetically.

"Look at them. The people selling these cattle are in a daze," says Oklahoma cattle farmer Gerald Knapp, an old-timer who sits grim-faced in a cowboy hat, with his gray beard and a thick handmade cane as knobby as his fingers.

Knapp drove four-and-a-half hours for the fourth time in four weeks to buy cattle. Having gone through the extreme drought last year, he is building his herd back up with the bargain prices.

"Their calves are bringing in $200 to $300 less a head than they thought. Some are bringing $400 to $500 less than they thought. I would be in a daze too," Knapp says.

When asked if he feels guilty taking advantage of the buyers' market, he looks down and says: "I went through this last year, no one wins in this deal."

He flicks the flyer in his hand, the auctioneer nods, he flicks his paper again, the auctioneer nods and stops talking. Knapp says he just bought a cow, and at a good price too.

The auction continues. They have been selling twice as many cows as usual, with a record 1,450 sold a few weeks ago. About 500 sold cows used to be a good day. Gerald has purchased 300 from Arkansas in the last month.

A round-faced grandfather named Bill Pruett introduces himself to a stranger at the auction, and offers to show off "what's left of our cattle."

"My wife couldn't be here. This is all too hard on her," Pruett says.

He looks down at the dust, and his smile drops.

As Pruett's red pickup truck meanders down country roads that would normally be lined with three-foot-high emerald grass, but instead pastures are brown. Even the trees that still have leaves seem burned brown and red from the heat. Pruett's John Deere tractor is now the greenest thing on his farm as it trundles into his pasture past a 100-year-old clapboard barn with a huge road bail of winter hay. In this case, the straw really is gold and the cows know it. Two of his black Angus cows come out of the stock pond half its usual size, where they have been cooling their bellies, and follow the others towards the hay. The sound of excited "moos" fill the quiet country side.

Pruett says he used to have 234 cows, now he has a herd of just 121.

"You see them every day. They are like grandchildren. You might not understand crying over a cow," Pruett says.

He and his wife have spent the last 25 years raising their cattle and perfecting their genetic make-up.

"It breaks my wife's heart. It's a hard feeling, it's a sad feeling," Pruett says, pausing to look at his herd bull, whose head is the size of a stop sign. "But you know they'll be better off down the road where there's plenty of grass for them and hopefully they don't go right to slaughter."

It's $700 per cow to keep them going, and Pruett says he can't get that much for a cow right now.

"You just need to sell and start over hopefully," Pruett says.

With no relief in sight for the month August, Pruett says he'll have another hard decision to make in a few weeks, but he won't give up. He will try to hold on to as many cows as possible and then he will start over.

Back at the auction house, there are long faces in the stands as a young cow dashes around the auctioning pen. There are so many the sale will go on well into the night and all this selling means less cattle for next year, and that could drive up beef prices as much as five percent.

"We're seeing triple the number of adult cows coming through the market and we're seeing double the total number from a year ago," says Randy, a rancher who did not provide his last name. "If it doesn't rain soon, I'm going to have to sell a big part of my herd too."

Another deep red trailer pulls up with a half-dozen more cows. Another rancher in a dirty white cowboy hat steps slowly out to unload his cattle.

"I just hope everybody can stand it," Randy says. "There's going to be a lot of people, this will break them. They depend on this for their living."

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