The Montana Drought Impact Model quantifies the revenue, cost, and herd-structure effects of mild, moderate, and severe drought on a Montana cow-calf operation. It translates grazing-capacity losses (AUM), calf weight and timing changes, cull and bred-cow liquidation pressure, marketing-channel deductions, and hay procurement cost into dollars per head, per lot, and per cow — so ranchers can plan destocking, hay buying, and calf marketing before the market moves against them.
Overview
Drought on the Northern Plains doesn’t hit a ranch in a single line item. It compounds: grass comes up short, calves wean lighter and earlier, buyers discount the lighter cattle, culls crowd an already-heavy market, hay prices spike with freight, and forced breeding-female sales permanently reduce future calf crops. The model captures each mechanism separately so the operator can see where the damage is actually coming from and where management leverage exists.
Three scenarios are modeled against a normal-year baseline: S1 Mild (USDM D1), S2 Moderate (D2), and S3 Severe (D3+). Each scenario ties AUM capacity, SNOTEL, and USDM DSCI ranges to concrete ranch-level effects.
Drought Scenarios — S1, S2, S3 Defined
| Scenario | AUM capacity | SNOTEL | USDM / DSCI | Grass season impact |
|---|---|---|---|---|
| Normal | 100% | Normal | None (D0) | Full 5-month grazing |
| S1 — Mild (D1) | −15% | 65–75% of median | DSCI 100–150 | Short 3–4 weeks late summer |
| S2 — Moderate (D2) | −30% | 50–65% of median | DSCI 150–250 | Short 6–8 weeks; early wean August |
| S3 — Severe (D3+) | −45% | < 50% of median | DSCI 250+ | Grass fails Jun–Jul; emergency sell |
Ranch and Market Inputs
The Assumptions sheet is the control panel. Every downstream calculation reads from these inputs, and all blue cells are user-editable.
- Ranch parameters (Section A): cow herd size, conception rate, birth-to-wean survival, weaning weights for steers and heifers, replacement retention %, hay on hand, hay consumption per cow-calf pair.
- Price anchors (Section B): current USDA AMS_1778 calf prices by weight class (550 / 600–650 / 700 lb steers and heifers), cull cow and bull prices, bred-cow and bred-heifer values, alfalfa and grass hay prices, CME May Feeder Cattle and June Live Cattle settlements. Defaults reflect the week of March 29–April 4, 2026.
- Marketing channel assumptions (Section C): auction commission, trucking shrink, cattle-buyer bid/ask spread, pencil shrink, gate cut and gate-cut realization, video auction premium and commission, and the % of your calf crop moving through each channel.
Scenario Comparison — What the Model Outputs
The Scenario Comparison sheet shows Normal vs. S1 / S2 / S3 side-by-side for every revenue and cost line an operator needs to plan against:
- Effective AUM capacity and grazing months available under each scenario
- Total calf crop (with scenario-specific weaning % discounts reflecting poor body-condition effects on conception and survival)
- Drought-adjusted calf weights (S1 −3%, S2 −7%, S3 −13%) and drought-adjusted calf prices (S1 −5%, S2 −12%, S3 −20% for steers; deeper for heifers)
- Cull cow and cull bull revenue, with drought price adjustments (S2 −3%, S3 −15% cull-cow price as supply floods the market)
- Forced female liquidation — bred cows and bred heifers sold at drought-discounted prices (S1 −4%, S2 −12%, S3 −28%)
- Summer hay deficit and drought-adjusted hay purchase cost, including freight
- Net operating impact vs. normal and per-cow net impact ($/cow) — the two numbers most useful for deciding between destocking now, buying hay now, or waiting
Marketing Channel Detail — Ring, Buyer, and Video
The Feeder Calf Detail sheet compares net proceeds across the three dominant Montana marketing channels: ring auction (PAYS / BLS / local yard), cattle buyer private treaty, and video/internet auction (NLV / Superior / DVAuction). The per-head calculation runs every buyer-side deduction the operator sees in real life:
- Auction commission (2–3% of gross)
- Trucking shrink to the barn (ring auction only; 2–3% of sale weight)
- Cattle-buyer pencil shrink (standard 2% clip from ranch scale weight)
- Gate cut (buyer rejects at delivery) and gate-cut realization on rejects
- Price slide — modeled as buyer protection only (one-directional): a $/cwt deduction applied when actual delivery weight exceeds estimated weight
- Video auction preconditioning premium (+$8–$25/cwt on documented VAC45+ loads) and video commission
The sheet then maps scenario to preferred channel: ring/auction or private treaty in a normal year, preconditioned-documented video lots in S2, cattle-buyer private treaty dominant in S3 because timing flexibility outweighs price discovery when calves have to move.
Hay Shortage Analysis
The Hay Shortage Analysis sheet sizes winter hay exposure separately from summer supplementation:
- Own-hay production impact (S1 80% of normal, S2 55%, S3 25% of normal yield)
- Winter feeding period (Park County normal = 5.5 months; S3 stretches to 6.5 months)
- Total winter hay required and deficit tons to procure
- Effective $/ton — base price plus drought premium (S1 +15%, S2 +35%, S3 +65%) plus freight
- Buy-by date recommendation (S3 = July; waiting to October can cost 80% more per ton)
- Break-even cull count: how many cows at drought cull prices cover the hay procurement cost. In S3 this often lands at 25–40% of the herd — a hard but clarifying number.
Tuning and Best Practices
The scenario multipliers are calibrated to Montana Northern Plains drought dynamics and can be retuned for a specific operation or sub-region. Drought weight discounts, price discounts, and hay premiums are all isolated in named cells on Scenario Comparison so changes don’t ripple unexpectedly.
- Run all three scenarios every spring when SNOTEL and USDM first signal below-normal — late June is usually too late to act on S2/S3.
- Compare NET per head across channels, not gross $/cwt. Pencil shrink and gate cut can move a $5/cwt “buyer discount” to parity with auction.
- Default gate cut = 0% reflects the tight 2026 market (buyers taking everything). Raise to 3–5% when modeling a softer market.
- Re-run the model whenever the Honest Cattle county conditions dashboard shifts a county into a new USDM class, or when CME May-GF or June-LE futures move more than $5/cwt.
- Treat the break-even cull count as a cash-flow sanity check, not a prescription. Selling breeding females has multi-year consequences the model doesn’t capture.
Sources
- USDA AMS_1778 Wyoming–Nebraska Direct Feeder Cattle Weekly — calf, cull, and bred-cow price anchors (week of March 29–April 4, 2026)
- CME Group — May Feeder Cattle and June Live Cattle futures settlements (April 11, 2026)
- U.S. Drought Monitor & NIDIS SNOTEL — AUM-capacity and scenario triggers
- MSU Extension — cow-calf nutrition and hay consumption benchmarks (0.065 tons/cow/month)
- Superior Livestock Auction research — VAC45+ preconditioning premiums
- Honest Cattle multi-source Montana cattle marketing analysis — channel share (roughly 16% public auction, 19% video auction, 65% private treaty) and basis assumptions (honestcattle.net/understanding-montanas-full-cattle-marketing-picture)