Environment
Steve Friess
FALLON, Nev. — By now, Alan and David Perazzo should have been finalizing the purchase of 1,000 heifers. Their new $3 million barn and the additional outdoor corrals are pretty much done — the groundwork for a plan to triple the output of this fourth-generation dairy ranch about 80 miles east of Reno.
This was supposed to be a triumphant summer in these parts, thanks to the Dairy Farmers of America (DFA) and its just-opened, years-in-the-making $85 million milk processing plant nearby.
That gleaming factory promised dairies along the Truckee and Carson rivers a certain market for their output, along with drastically reduced costs compared with transporting milk to processing plants in California. So the Perazzo brothers and several other ranchers and farmers in the Fallon area charted expansions that would have come to fruition this season.
What they didn’t count on was three years — and counting — of drought, each more severe than the last and worsening to the point that this year’s irrigation supply will run out and be cut off for the region’s farms in late July.
The situation is even more dire in the Lovelock Basin, about 100 miles to the northeast, where the state’s largest alfalfa farms sit and where the Rye Patch Reservoir is so parched that farmers have received no water at all for the first time in memory. That’s an important source of Nevada dairy farmers’ hay that won’t exist this summer.
In regions like this where the agricultural industry is so tightly linked, drought has a cascading effect. The Perazzos will still pump about 4,800 gallons of milk from their 500 heifers every day this summer, and those cows won’t go hungry or thirsty. But the paucity of water in their vicinity and its complete absence elsewhere drives the cost of alfalfa dramatically higher. The Perazzos must buy it from farther away at higher prices — $250 per ton right now, up from $180 per ton in 2012 — and that makes maintaining the existing herd significantly more expensive.
Adding heifers now only compounds that problem. “If it weren’t for the drought, we would be ramping up sooner, absolutely,” said Alan Perazzo, 52, who represents the state’s 22 dairies as an appointee on the Nevada Board of Agriculture. “It comes into play when we decide how many heifers we’re going to buy and how much we’re going to hang ourselves out there to buy more feed.”
Another prominent Fallon dairyman, Pete Olsen, has also hit pause on expansion plans that would have doubled his operation. “You certainly alter what you’re doing in these situations,” said Olsen, who is on the DFA board and championed the construction of the new plant. “You don’t decide to add an extra thousand cows at a time like this. As it is, we will take a loss at times to maintain the herd.”
To many, it may seem strange to contemplate ranching and farming in the Nevada desert, let alone encourage expansion by erecting an expensive, high-tech plant. But under normal circumstances the snowfall in the Sierra Nevada and other parts of the region provide, thanks to a century-old, federally managed network of dams and reservoirs, a consistent means of irrigation.
What’s more, milk demand, particularly overseas, has skyrocketed in recent years as high-density, upwardly mobile nations like China and India strive to improve their diets. Chinese milk-powder imports rose 28 percent in 2013 and were projected to go up another 25 percent this year as baby formula and yogurt makers there seek sources, according to the U.S. Department of Agriculture’s Beijing bureau.
The 2008 scandal in which thousands of babies were hospitalized and six died after consuming Chinese-made baby formula and other products laced with melamine continues to prompt Chinese parents to seek milk products made from imported components, experts say. “Traceability from one end of supply chain to the other is very important,” Olsen said.
The Fallon plant was specifically designed to compete with milk-powder exporters in places like New Zealand, which Olsen said is “at the forefront of the market.”
Every drop of milk taken to the Fallon plant, which can handle as much as 2 million pounds a day, will be converted into powder, trucked to the Port of Oakland and exported to Asian markets, DFA officials say. In response, the dairies here, which have averaged about 800,000 pounds of milk production a day, sought to ramp up.
“There’s a big market out there for powdered milk,” said Kelly Redmond, deputy director and regional climatologist for the Western Regional Climate Center at the Desert Research Institute in Reno. “It’s just unfortunate they started in a kind of a crummy year.”
For their part, the Perazzos are fascinated by the connection between their operation and an international market fueled by demographic and consumer changes thousands of miles away.
Back when they went to college, David Perazzo said, “it was discussed in the fact that global markets were the future. But that’s now where we’re living. Especially our kids, they’re going to watch the foreign markets closer than we ever did because that’s going to be their bread and butter.”
The DFA, for its part, has spent the past few years promoting such growth with a public information campaign that lists the reasons Nevada is ideal for dairy production. The northern part of the state has, according to DFA literature, “excellent forages (average of four cuttings of alfalfa per year),” “ample water” and “low feed costs.”
Except when it doesn’t.
On a normal mid-June afternoon, Bingo Wesner would usually be tending to his land, checking the progress of his thousand acres of alfalfa and wheat and the nutrients in his soil. Instead, he sits in a white undershirt in the kitchen of his little yellow house in Lovelock, having just bidden farewell to a crop insurance agent who was surveying damage to assess a payout.
“Oh, they’ll give us a percentage,” said a grumpy Wesner, 79. “It’s enough to get by, I guess. It doesn’t make you whole. It’s another bunch of paperwork. They’re going to pay after you jump through all the hoops. You have to have 15 letters. It’s crazy.”
If snow was severely below average for the Sierras, rain was virtually nonexistent along the Humboldt River, which winds from the northeast reaches of Nevada to the nearby Rye Patch Reservoir.
“This is the worst drought we’ve had,” Wesner said. “We’ve never had a zero allotment that I know of. Everybody’s slowing down their operations. Nobody’s buying no equipment, nothing.”
The fields surrounding the house are deceptively lush. Alfalfa requires no water for a first reaping, Wesner said, because it stores nutrients in its roots during the winter. But a normal year yields four harvests, and Wesner expects the land to turn as brown as the cinnamon-hued mountains in the distance very soon. Already, the wheat fields are dead.
The aim, of course, is to survive and hope that the drought breaks this winter. The fear, though, is that long-fallow fields will require longer to recover, and another year as severe as this one could force ranchers to sell off heifers rather than pay escalating hay prices or resort to other, less effective feeds. The overseas demand for milk is so strong, though, that Olsen says the DFA is confident milk will flow to the Fallon dairy plant even if it must be produced farther away or at higher costs to ranchers.
“People keep asking, ‘Why did you build the plant in the middle of the drought?’” Alan Perazzo said as he welded a metal arm to a forklift. “But that’s the one thing you have no control over. We have a secure market for our milk. That’s the advantage of having that plant here. So we felt comfortable about building. And banks felt comfortable about lending us money to build. Why? Because there’s a plant five miles away. Now we just need rain.”
Error
Sorry, your comment was not saved due to a technical problem. Please try again later or using a different browser.