Too Bad, Too Long

For Jay Anderberg, 40, the gavel-pounding auctioneer and co-owner of Miller Livestock Sales Co. in Miller, S. Dak., business this summer has been altogether too good. Since June, Anderberg has sold nearly 5,000 head of cattle per week to packers, feed-lot owners and out-of-state cattlemen, almost five times the average during a normal summer. But business is not normal anywhere in South Dakota this summer. Parched by the worst drought in 42 years, the prairies are yellow and burnt, and at least half of the state's oats, wheat and barley cash crops have been devastated. In all, the drought could cost the state $1 billion, or half of its annual agricultural output. Since April, less than four inches of rain has fallen in the eastern portion of the state, and, for want of feed and pasturage, cattlemen there have been forced to sell livestock before they became starved and worthless. Says Anderberg: "It's a hell of a deal for me. But it's short-lived--we won't have nothin' next year."

In the eight-county region of eastern South Dakota that is the center of the livestock business, fully 75% of the herd has already been sold off. Although cattlemen have been losing as much as $150 on every head, cash receipts so far have postponed widespread financial disaster. But the three-year dry spell, which has also affected large areas of Minnesota, Wisconsin, northern Michigan, Nebraska and Iowa (TIME, July 26), is now pushing ranchers to the end of their credit lines. Leland Sivertsen, for example, has been trying, without much luck, to get emergency money from the Farmers Home Administration to keep his yearling business going. "To get money," he explains, "you've got to give projections, and without any feed to show, you can't give projections."

Small Help. Primarily through the Federal Disaster Assistance Administration, South Dakota farmers and ranchers stand to receive about $3 million in hay and transportation subsidies. But federal funds can do little to offset the deeper impact of the drought. According to the University of South Dakota's Business Research Bureau, the cash-crop losses could wipe out 47,500 jobs during the next year, as farms and related businesses lose sales or cut back services. If that happens, the state's unemployment rate could jump from 4.7% now to nearly 20%. Local schools may suffer, since they rely heavily on cattle head taxes for income. Numerous banks may be hurt, particularly those that lend almost exclusively on cash crops and cattle. Many banks have also extended car, machinery and disaster loans to farmers who now have little cash to repay them. The light industry that is gradually moving into South Dakota may provide some new sources of revenue, but in two-thirds of the state's counties, agriculture still accounts for more than 50% of total income.

Still, dispirited ranchers continue bringing their cattle to auction each week. As Ron Nelson, a cattleman up from Iowa to look over the South Dakota stock, observed recently in Miller, "If this were the first year of the drought, a lot of these boys would take a loan, buy some hay and hold on. But it's been too bad, too long."

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