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INSIDE MAN

Drought

Aired August 18, 2013 - 22:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


MORGAN SPURLOCK, CNN HOST (voice-over): it is one of the single hottest, driest places in the entire United States. And the people Sheridan are still reeling from the effects of drought.

BRIAN WILLIAMS, NBC NIGHTLY NEWS ANCHOR: We are living in one of the worst droughts of the past 100 years.

UNIDENTIFIED FEMALE REPORTER: Three fifths of the USA from sea to shining sea is dry.

SPURLOCK: You can't deny that our planet is in the midst of a massive climate change. That means more hurricanes, more fires and floods hitting harder and more often with increasingly devastating consequences.

But few natural disasters have more of a global impact than drought. Crops whither, animals starve, food production and distribution becomes strain and prices around the world skyrocket. When that happens, things spin out of control pretty quickly.

Here in the United States and in Sheridan, we are in the middle of a record breaking drought that is affecting everything from how we fill our gas tanks to the price of bowl of cereal. In the face of a rapidly changing climate affecting everyone in the world, can the farmers and ranchers right here in the heartland hang on to their way of life and can we do anything to stop it?

If you live in certain parts of the country, chances are drought is about as unthinkable as a typhoon or a tsunami. It's just happens somewhere else. But if you live in Sheridan County, Nebraska, you are living through one of the costliest natural disasters in U.S. history.

Sheridan is now one of the driest counties and one of the driest states in the entire country and nobody around here knows that better than Kenny Wellnitzs. Along with his wife, Tammy, and son, Cane, Kenny breeds and raises 800 black angus cattle on 11,000 acres of ranchland which he then sells to the beef market.

Now, besides is facing a natural disaster, Kenny is facing a desperate economic crisis and considering if the drought might force him to reduce the size of his herd.

I want to see what drought means to the farmer or rancher suffering through one so this week I will work as a ranch hand for the Wellnitzs'.

Hi, I'm Morgan. How are you?

TAMMY WELLNITZ, KENNY WELLNITZ'S WIFE: Hey, Morgan. Welcome to our ranch.

SPURLOCK: Great.

KENNY WELLNITZ, OWNER: Where we're going today we will try to fit you to a horse.

SPURLOCK: OK. Good luck with that.

(LAUGHTER)

KENNY WELLNITZ: How often have you road before?

SPURLOCK: I grew up riding. But you know, living in New York city, I don't do too much horseback riding . So, we will see where it goes.

KENNY WELLNITZ: You are taller than I thought. We might have to extend the stirrups.

TAMMY WELLNITZ: You will look like a jockey.

SPURLOCK: Yes. Let's go. Where's the horse?

KENNY WELLNITZ: They're out behind the barn. We will go out and catch them. The one over to your right.

SPURLOCK: Yes.

KENNY WELLNITZ: Itching his nose on the fence.

SPURLOCK: Tammy and Kenny have been ranching this land for 20 years.

You took it easy on me didn't you?

KENNY WELLNITZ: You want to trade?

SPURLOCK: And they spent most of their lives working hard to build this business up together.

It's that close.

KENNY WELLNITZ: Ranching has been part of my life since I was very young. My father had a ranch. He would take me everywhere he went and I got a good feel of what ranching was like before I ever even got to school.

Name is tramp?

SPURLOCK: Trump. Perfect horse for me.

(LAUGHTER)

KENNY WELLNITZ: I will put out one more for you.

SPURLOCK: OK.

KENNY WELLNITZ: I'm with Tammy all through high school.

TAMMY WELLNITZ: We started dating when we were seniors. We both lived on ranches. We both liked horses. I thought he was cute.

KENNY WELLNITZ: It wasn't long before we decided that we would spend most of our lives together.

TAMMY WELLNITZ: Obviously because we got married pretty young.

(LAUGHTER)

SPURLOCK: There is not a cloud in the sky.

KENNY WELLNITZ: No.

SPURLOCK: First up, one of the most important jobs on any ranch. We're off to feed the cows.

KENNY WELLNITZ: You can see by the lack of grass, that's drought.

SPURLOCK: And this affects how much of your land?

KENNY WELLNITZ: Everything that we had cows on, the grass would be gone.

SPURLOCK: This drought is the largest in the U.S. in over half a century with more than 80 percent of U.S. farmland being affected. The average cow needs to eat about 30 pounds of grass every day so when the grass dries up, ranchers have to buy more hay to supplement the cow's diet and the price of hay has skyrocketed.

In 2011, Kenny paid $60 a ton but in 2012, the price quadrupled and hay cost $25,000 a ton. And because of the lack of grass, Kenny had to buy twice as much as he normally would, just to keep his cows fed.

KENNY WELLNITZ: I am conservative right now. It's just too much money.

SPURLOCK: It's so dry. There was so much dust. There were dried up slag tight in my nose.

Where we are going next?

KENNY WELLNITZ: We're going to look at some corn.

SPURLOCK: In addition to grass and hay, Kenny feeds his cattle corn, the key ingredient to fatten them up for market. More weight means more money.

So what's this right here?

KENNY WELLNITZ: Corn distillers. They take the corn and they distill what they own and this is what's left.

SPURLOCK: Right.

KENNY WELLNITZ: We fed this for about 12 years now.

SPURLOCK: How has the price of this changed?

KENNY WELLNITZ: This has gone up from $20 a ton to $300 a ton.

TAMMY WELLNITZ: Ron Johnson is going to tell me yesterday that was $435 for a ton.

SPURLOCK: So it's already up another $135?

KENNY WELLNITZ: Yes.

SPURLOCK: That's a lot.

KENNY WELLNITZ: The cows are pretty hungry. The higher the corn market, the less income in our pocket, the less income, high expenses. You are not in business very many years.

SPURLOCK: You see, I'm intimidating. I'm so sort of scary. It's so hot here. How did that affect all the water?

KENNY WELLNITZ: Generally we have dams.

SPURLOCK: OK.

KENNY WELLNITZ: But --

SPURLOCK: Wow.

KENNY WELLNITZ: This year dams were dry, completely dry. Been dry a long time.

SPURLOCK: Right.

KENNY WELLNITZ: We are in the bottom of a man-made dam. You can see the line of dirt up here on the top.

SPURLOCK: Normally is it filled all the way to the top?

KENNY WELLNITZ: Taller than the pickup.

SPURLOCK: Wow.

KENNY WELLNITZ: We should be completely underwater.

SPURLOCK: And how many of these do you have on your property?

KENNY WELLNITZ: Close to 20. They're all dry.

SPURLOCK: Scary?

KENNY WELLNITZ: It is. It is scary. You could dig down -- there is nothing there at all.

SPURLOCK: Wow. Other ranchers you talk to, is everybody in the same boat?

KENNY WELLNITZ: Oh yes. We're all trying to decide what is the best way to make it through the winter? If you put a lot of money into your winter and then it don't rain next year and you have to sell anyway, that's bad news.

SPURLOCK: Yes. That's incredible. As if they didn't have enough to worry about, the Wellnitzs' are dealing with a new problem. And this one is definitely manmade.

TAMMY WELLNITZ: They have been hitting these piles over here.

SPURLOCK: What little hay they do have is being stolen.

TAMMY WELLNITZ: Hay being like gold to people, obviously it's becoming a target.

SPURLOCK: Right. So, how many have been stolen?

TAMMY WELLNITZ: We are thinking close to 20.

SPURLOCK: So, that's a lot of money.

TAMMY WELLNITZ: It's really getting to be a big deal just because hay is so short and it is not like we can just go find some more hay to replace it.

SPURLOCK: Yes. So, this is all part of the sting operation?

TAMMY WELLNITZ: Well, I don't know.

SPURLOCK: Yes.

TAMMY WELLNITZ: I have been putting lines across it so I can tell if a bail is missing or it has been moved.

SPURLOCK: OK.

TAMMY WELLNITZ: So, if you can hop up there and mark them for me?

SPURLOCK: SPURLOCK: Mark these top ones on?

TAMMY WELLNITZ: Yes. I have a hard time jumping up there. You are like tall.

See? Now, you know what I have to go through.

SPURLOCK: You got to bring a ladder over here.

TAMMY WELLNITZ: I would be short. That was perfect.

Our main idea of protecting our hays this year is we are just going to grind it all. If they want to steal it, they are going to have to (INAUDIBLE) at the back of their pickup and obviously, they won't get way make it easy for them, they are going to go to do it. If you make it harder, then maybe they will go to somebody else. SPURLOCK: That's someone else, right?

TAMMY WELLNITZ: You're doing well.

SPURLOCK: Thanks. All of those years being a vandal paid off.

TAMMY WELLNITZ: There you go. Thank you.

SPURLOCK: This one has got horns. Now you know.

You're having too much fun.

TAMMY WELLNITZ: You are just having too much fun.

SPURLOCK: This is el Diablo.

TAMMY WELLNITZ: I'll race you back.

SPURLOCK: Oh yes?

TAMMY WELLNITZ: You have a bigger bike.

SPURLOCK: All right.

The Wellnitz's have been ranching in this part for more nearly a century and they have survived their fair share of disastrous weather. But this drought is different. It's taking its toll on Wellnitz's and their herd leaving them with few options. If things don't improve soon they will have to sell off some of their cows. That's a decision no rancher wants to make. Even if they do decide to sell, whether or not they survive is anyone's guess.

(COMMERCIAL BREAK)

TAMMY WELLNITZ: I got breakfast ready.

SPURLOCK: Kenny Wellnitz and his wife, Tammy, are ranchers in Nebraska currently trying to see their way through one of the worst droughts in U.S. history.

So, were you up at 4:30 as well?

CANE WELLNITZ, KENNY WELLNITZ'S SON: No.

SPURLOCK: What do you have to do before school?

CANE WELLNITZ: Check the calves.

SPURLOCK: How far is your school?

CANE WELLNITZ: About 30 miles.

SPURLOCK: That's how we drive everyday for school.

So Kenny, give me a run through on what is going to happen today.

KENNY WELLNITZ: We're going to go up to the pasture and, you know, get all of the steer calves and bring them back to the corral to sell.

SPURLOCK: OK. I'll get ready.

TAMMY WELLNITZ: You want another egg or are you all right? Don't forget to put gas in.

SPURLOCK: Kenny and Tammy can't afford to feed all of their cows until maturity. So, they decided to sell off part of their herd early. It is a tough decision. Selling early means they will make less money overall, but fewer mouths to feed means a better chance of making it through the dry weather.

KENNY WELLNITZ: If you will hang on to him for me?

SPURLOCK: Got it.

KENNY WELLNITZ: All the cows that we want to gather today should be in this pasture. We just want to get down to the very best that we will keep.

SPURLOCK: Yes.

It's a calculated risk. And in an attempt to cut their losses now, instead of risking their entire herd.

Come winter?

KENNY WELLNITZ: Let's go right down through here. If you can lean forward in your saddle and standup. Just a little tiny dip.

SPURLOCK: Yes. Then I won't bang my ass so much?

KENNY WELLNITZ: Yes.

There should be just grass everywhere. There is just not much less for them to eat.

SPURLOCK: Right. Yes, you hear that?

KENNY WELLNITZ: Yes. Let's move that direction.

SPURLOCK: So is that what they're doing? Are they talking?

KENNY WELLNITZ: Yes. You want to get behind her?

SPURLOCK: Sure. Come on.

KENNY WELLNITZ: OK.

SPURLOCK: Hey. There is two more. Come on.

KENNY WELLNITZ: Good.

SPURLOCK: Six more.

TAMMY WELLNITZ: Hey! Your stirrups are too short. SPURLOCK: My stirrups are a little short.

TAMMY WELLNITZ: Yes.

SPURLOCK: I keep adding length to it.

KENNY WELLNITZ: If the drought continues into next year we will keep selling cattle. We fear that if we have to sell off all of the cattle, it would be our last year.

SPURLOCK: Terrible.

KENNY WELLNITZ: Yes. Makes it an extremely dangerous time for a rancher.

Hey.

SPURLOCK: Come on.

When a drought like this happens, ranchers like Kenny depend on supplemental feeds like corn and hay to get them through the dry spell. Products that sometimes need to travel hundreds of miles from farmers to ranchers in the Midwest. Many of the country's agricultural products move via the Mississippi river, the life blood of commerce in the United States.

But now, even those shipments are in danger as the drought has come to the Mississippi, too where just a few months ago, water levels were so low officials believed they may have to shut the river down all together.

UNIDENTIFIED FEMALE: Good morning. Over the last 24 hours, we have a total of 93 barges and 33 (INAUDIBLE), 59 (INAUDIBLE).

UNIDENTIFIED MALE: A rudder has been.

UNIDENTIFIED MALE: Good morning, everyone.

Presently minus 2.15 and falling. The gauge is 5.1 and a slow fall. There is no rain forecasted for the next ten days north of St. Louis. Of the 21 boats, three are Ingram.

SPURLOCK: Ingram is the largest barge transportation company in the U.S., moving all types of cargo. Thousands of tons of fuel, coal, steel, and cement every day as well as dry goods. In fact, a whopping 60 percent of America's gray next board has to travel down the Mississippi on its way out of the country.

The slow down on the river doesn't just cost money. People's very livelihoods are also on the line. In 2012, the river reached historic lows as much as 20 feet below normal.

UNIDENTIFIED MALE: The dykes, they are all out of water. You can see the flat part of it, we normally can run literally on top of that flat part of the rock. That's a very unusual sight. Something you don't normally see. UNIDENTIFIED MALE: Off to the right here, there is a barge that lifted over. To our left or our port side is a wreck. This is the first time I have seen it. And there are several other. They were known hazards but this is the first time we have seen them. We are passing a business right now where you can see the barge listed over due to the shallow water.

UNIDENTIFIED MALE: The opposite side of our barge is three foot lower than the inside of our barge which is setting on the sloping bank. And as the river falls, we continue to lean more.

SPURLOCK: George Foster is the owner of JB Marine, a barge cleaning repair company that he runs with the help of his two daughters.

UNIDENTIFIED FEMALE: You can't put anything down without it. Everything falls forward.

UNIDENTIFIED FEMALE: JB Marine. OK.

UNIDENTIFIED MALE: We can't move out in the river any further. Normally as the river drops we can move out. We have moved out as far as you can go. It has done some structural damage.

UNIDENTIFIED MALE: The building twisted and there is an inch crack.

UNIDENTIFIED FEMALE: It is a very nostalgic place for me. We are up here so, it's weird.

UNIDENTIFIED MALE: I think we're at mother nature's mercy. Being a small company we're all like family.

UNIDENTIFIED MALE: You doing all right today?

UNIDENTIFIED MALE: Good.

UNIDENTIFIED MALE: One of my major concern is jobs, you know. I have people here that been with me for over 25 year. I never had a lay off.

UNIDENTIFIED MALE: Move up closer to the bridge.

UNIDENTIFIED MALE: That's extremely scary. I absolutely dread if this river shuts down and I have to tell some folks that I have got to lay them off. That is going to be one of my worse days.

UNIDENTIFIED MALE: Oh my God, the whole side of the hill is going.

SPURLOCK: Droughts don't just mean lack of rain. They also mean fire.

Last year saw one of the worst wildfire seasons on record with more than nine million acres burning across the country. It's something Kenny experienced firsthand when a wild fire raged through his property scorching thousands of acres of precious pasture.

UNIDENTIFIED MALE: Standby. UNIDENTIFIED FEMALE: Winds and dry heat helped whip flames of a wildfire in Northwest, Nebraska.

The fire between Shadron and Rushville grew by Saturday to more than 93 square miles, an area bigger than the size of Nebraska's state capital of Lincoln.

KENNY WELLNITZ: We might not gear clear on the other end today, but we will go as far as we can while there is still light.

SPURLOCK: OK.

KENNY WELLNITZ: So, a lot of country to cover. That fire wasn't very nice to anybody.

SPURLOCK: I see a couple of brown patches where it just kind of jumped. That is scary. If you had a great rain in the spring would anything grow here?

KENNY WELLNITZ: Here? No. That's scorch. That ground is sterile down there. It's done.

SPURLOCK: Wow. Look at this. You look like you're on another planet. It looks like Mars.

KENNY WELLNITZ: And when the fires hit instantly, that changed everything. If you thought you had two months left of grass, instantly you had nothing. It's just gone.

SPURLOCK: How did the fire get started?

KENNY WELLNITZ: There was a storm that came through and obviously we weren't getting any rain but we did get lightning. And there was two lightning strikes, then, we know that started fires.

Electricity came on that smoke. It came the direction that we were at. Instantly there was lightning coming out of that smoke cloud. A lot of people seen it come down and hit the ground. And minutes later, there is a column of smoke. And that's what started all of this.

UNIDENTIFIED MALE: Get our truck out of there.

KENNY WELLNITZ: It was kind of eerie to see all of that smoke and hear it's coming this way with no rain and lightning out of it. Yes.

SPURLOCK: Like something out of a horror movie.

KENNY WELLNITZ: Yes. This is something that hasn't happened that I have seen in my lifetime.

SPURLOCK: How much ground did it cover in total?

KENNY WELLNITZ: They said about 100,000 acres.

SPURLOCK: How many acres did you lose in the fire? KENNY WELLNITZ: About 6,000 acres.

SPURLOCK: And how much of that is total land that you use?

KENNY WELLNITZ: About half. We had a lot of grass left in here. It looked like we was going to get by for a while.

SPURLOCK: When you see this land looking like this, it seems like you got be a glass half full kind of guy?

KENNY WELLNITZ: Well, I believe so, yes. You know, it will rain and eventually all of this will see green pastures and everybody will be happy again.

SPURLOCK: Yes.

(COMMERCIAL BREAK)

SPURLOCK: On Kenny's ranch back in Nebraska, the drought has not let up and preparations continue for a potential sell off of the herd. Today, the Wellnitzs call in their vet, help identify the pregnant cows.

KENNY WELLNITZ: You put him in this can right here.

SPURLOCK: So, they can decide how many cows who aren't pregnant can be sold before the winter.

UNIDENTIFIED MALE: Eighty.

SPURLOCK: That one is 80 days?

UNIDENTIFIED MALE: Yes. Eighty-five.

SPURLOCK: What they are doing right now by sorting the cattle, you know. Because even the cows that were already calves and they separated were already pregnant with their next calf.

UNIDENTIFIED MALE: Seventy-five.

Cows that are pregnant, they are sending out the pasture. They are going to keep for a little while longer. The ones that are open they are bringing in here. So, these cattle are separated and they will end up taking these cows to market.

SPURLOCK: So, Doc, when you reach in, what is the road map? Like what are you feeling for?

UNIDENTIFIED MALE: OK. If I'm going in about half way between my wrist and my elbow --

SPURLOCK: Yes.

UNIDENTIFIED MALE: I always find that cervix first so I have my landmarks.

SPURLOCK: OK.

UNIDENTIFIED MALE: Eighty-five.

SPURLOCK: You can tell how many days just by the size?

UNIDENTIFIED MALE: I judge by how big his head is.

SPURLOCK: It seems pretty accurate.

UNIDENTIFIED MALE: That's what my producers tell me. Seventy days.

SPURLOCK: Seventy days. I would be running away that fast, too.

UNIDENTIFIED MALE: All right. Are you ready?

UNIDENTIFIED MALE: Come on cow.

SPURLOCK: Yes.

UNIDENTIFIED MALE: OK. Just grab you one of those green sleeves there.

SPURLOCK: Should I put two gloves on?

UNIDENTIFIED MALE: No.

SPURLOCK: Mom always said this is where I would end up.

TAMMY WELLNITZ: What's going on?

UNIDENTIFIED MALE: Settle down.

SPURLOCK: Has anybody ever broken their arm doing this?

UNIDENTIFIED MALE: Oh yes.

SPURLOCK: All the time.

UNIDENTIFIED MALE: Yes.

SPURLOCK: All right, dock. I think it I'm about ready.

UNIDENTIFIED MALE: OK. There is some liver cut in that. Dip So, dour hand in there.

SPURLOCK: All right.

TAMMY WELLNITZ: Oh my God.

SPURLOCK: All right.

UNIDENTIFIED MALE: All right. Cone your hand like this. Go into the rectum.

SPURLOCK: Straight in?

UNIDENTIFIED MALE: Yes. Keep going.

SPURLOCK: It's warm. It's so warm inside.

UNIDENTIFIED MALE: It's nice on a cold day. So you feel like a water balloon in there.

SPURLOCK: Yes.

UNIDENTIFIED MALE: Run your hand over and you should feel a calf with a head about that long.

SPURLOCK: Yes.

UNIDENTIFIED MALE: Yes. That's it.

SPURLOCK: This is so crazy.

UNIDENTIFIED MALE: That's about a 95 to 100 day pregnancy.

SPURLOCK: Wow. I can feel it right in my hand.

UNIDENTIFIED MALE: Right.

SPURLOCK: Yes. And now I can pull it out.

UNIDENTIFIED MALE: Yes. I'll just go home now. We'll give you a couple more.

SPURLOCK: Yes. That's an experience.

Back on the Mississippi river, the low water levels are making life on the Ingram barge almost impossible.

UNIDENTIFIED MALE: That's south bound vessel. It's our problem to get out of his way. It's more difficult to navigate.

UNIDENTIFIED MALE: We are concerned about one particular shallow area.

UNIDENTIFIED MALE: The grounding problem primarily rock formations like spikes in the bottom of the river.

UNIDENTIFIED MALE: That could sink a barge. The channel is so narrow, you sink a barge, you just shut the river down.

UNIDENTIFIED MALE: That's ten feet of water.

UNIDENTIFIED MALE: Wow.

UNIDENTIFIED MALE: The propellers under this boat are nine feet tall.

UNIDENTIFIED MALE: So those are almost scraping bottom?

UNIDENTIFIED MALE: Exactly. There is simply not enough water for it to clear.

SPURLOCK: But it's not only people living in the heart who are being affected by it. In fact, it's affecting people all over the world.

If you're a rancher like the Wellnitz's, you hope a few months of solid rain will get you through the next season and then everything goes back to normal. But for the rest of the world, it may not be that simple. The same corn that Kenny could barely afford is now seeding the way for potential global catastrophe.

It starts with a failed crop. The smaller corn supply can't meet demand and soon the price of everyday staples which depend on corn as feed like beef, milk, eggs and poultry start to rise. To meet U.S. government requirements, where ethanol-based fuel, the already devastated corn crop is further reduced, the driving prices even higher.

Speculators and commodity traders see an opportunity to make a quick profit and artificially inflate the price of corn even higher. The U.S. is the largest exporter of corn. When price spikes in the U.S. begin to ripple throughout the world, so, too, do prices of the world's other food staples like wheat, rice, and soybeans. Third world countries sees food prices begin to rise rapidly. Meaning protests and increased civil unrest like food riots. Pretty soon the Wellnitz's drought is now the world's.

TAMMY WELLNITZ: A sandwich and a sloppy Joe. Kind of a left over deal here today.

SPURLOCK: I love leftovers. How does Cane say about the decision making process. Do you guys talk about everything in here and absolutely, we talk about everything.

TAMMY WELLNITZ: We don't always agree but usually Ken is right. I mean, when it comes to --

KENNY WELLNITZ: Always.

TAMMY WELLNITZ: No, not always.

CANE WELLNITZ: For some reason they don't take the hired man's opinion.

KENNY WELLNITZ: Who's the hired man?

TAMMY WELLNITZ: That's why we have you.

KENNY WELLNITZ: He will say what happened for years. All the homesteaders would have a dozen kids to work the farms?

TAMMY WELLNITZ: That's the truth.

KENNY WELLNITZ: They made it hard on you.

TAMMY WELLNITZ: Yes. Kind of true, actually. I will take some of the corn salad.

SPURLOCK: You said you were up this morning at 4:00 worrying about things? KENNY WELLNITZ: Well, I -- I guess until we get that first good soaking rain, we are all going to think the same thing. Maybe instead of being dry one year it will be two years.

TAMMY WELLNITZ: It just means everything to us as far as, you know, whether we will be in business next year.

KENNY WELLNITZ: We wouldn't have many cows left this time next year.

SPURLOCK: So Cane, does this make you want to be a rancher?

TAMMY WELLNITZ: Sometimes we kid around and say maybe we should sell out and try doing something else. We have even joked about being a greeter at Walmart. It would be easy and, you know.

SPURLOCK: For one day. You would like that job for one day and then you would be like I have to go outside.

TAMMY WELLNITZ: I think it would be nice to have sometimes just have a nine to five job. You know, you go there. You work, you come home and you forget about it.

SPURLOCK: Right.

TAMMY WELLNITZ: Just the thought of not have to think about is this going to die or this is going to live or, you know.

SPURLOCK: Yes.

KENNY WELLNITZ: It's going back to square one. That's why you wake up at 4:00 in the morning.

SPURLOCK: Right.

(COMMERCIAL BREAK)

SPURLOCK: With no rainfall on the horizon, Ken and Tammy have made a decision, to sell off 200 steer calves. They can only hope it will be enough to get their family through the winter.

SPURLOCK: Keep the steers in and let the cows out?

TAMMY WELLNITZ: Yes.

SPURLOCK: OK.

TAMMY WELLNITZ: I mean, if they are big steers, let them out.

SPURLOCK: OK.

TAMMY WELLNITZ: I guess, it just really dawned on me what has happened to our lives. It's been hard.

KENNY WELLNITZ: Hey. Hey.

SPURLOCK: Come on. Right now we are sorting the calves and the cows. The young steers are what's going to market. So we're basically splitting the babies from their mommies right now.

KENNY WELLNITZ: We are selling off cattle earlier than we normally would. Obviously, we wouldn't like that.

SPURLOCK: Usually we would be waiting another two or three months before this would happen. Normally they would be weighing about 600 pounds. But they are having to take a series in the market early. Today they are going to be averaging around 500 pounds. It's a lot when someone is paying you 1.80 a pound. So, $180 per cow that they are losing there. they normally would have got in a couple more months. So, it is a big hit.

TAMMY WELLNITZ: We got a heifer.

KENNY WELLNITZ: Come on.

SPURLOCK: Come on.

TAMMY WELLNITZ: He has got testicles.

KENNY WELLNITZ: It's hard for Tammy to hold him. Hang on a second, Morgan.

KENNY WELLNITZ: The calves want to go out, too.

SPURLOCK: Two calves got out?

TAMMY WELLNITZ: Yes. Not quite so pushy. A little more patience. You're good.

SPURLOCK: I was a little pushy, finally, with the cows. It is my first time. What do you want?

KENNY WELLNITZ: You were doing good, I'm just saying. Just a little tough.

SPURLOCK: Yes.

TAMMY WELLNITZ: We're just about done here.

SPURLOCK: There he goes.

The steer calves are being bought by a feed lot in Kansas who can afford to feed them in the coming months.

KENNY WELLNITZ: We are here.

UNIDENTIFIED MALE: Hey, Doug. Nice trailer you got. I like that.

UNIDENTIFIED MALE: Thank you.

UNIDENTIFIED MALE: Morning.

UNIDENTIFIED MALE: Allen, you got them coming behind you.

UNIDENTIFIED MALE: Come on cows.

SPURLOCK: These guys all got a reprieve. Three of them is keeping to raise for 4h. Three of those guys get to live a good life for the next year.

UNIDENTIFIED FEMALE: Where is that 827?

UNIDENTIFIED FEMALE: The one with the funny nose.

TAMMY WELLNITZ: We rely a lot of cane. Really trying to make sure that he has a childhood but yet, we're at the point where we need his help.

He has 900?

I thought we put in six more?

UNIDENTIFIED FEMALE: And 949.

TAMMY WELLNITZ: You did, OK.

He's getting big enough and strong enough he's just like our right hand man.

There is 820.

We don't want him to think that he is burdened with this place but we want him to go out and learn how to work and make his way in life. He will do well in whatever he does.

KENNY WELLNITZ: Tammy. You can get me three more of the biggest ones out of here.

TAMMY WELLNITZ: OK. Did Cane get off to school?

KENNY WELLNITZ: I hope so. I told him to.

SPURLOCK: There goes the first batch, 84 head of cattle in that truck.

KENNY WELLNITZ: If the drought continues into next year, we will probably keep selling cattle, but it will be extremely difficult to continue.

SPURLOCK: Worst case scenario is they don't get rain and all the cattle ranchers will be kind of stuck with expenses and no cattle.

UNIDENTIFIED MALE: Hey, hey. Come on. Up there. Hey, hey. Thank you.

SPURLOCK: See all the cows coming over talking to the truck now? Look at all of these poor Mamas. I don't have them. I'm sorry. There they go.

UNIDENTIFIED MALE: We will see you down there in a little bit.

UNIDENTIFIED MALE: OK. Sounds good.

UNIDENTIFIED MALE: See you, Warren.

UNIDENTIFIED MALE: OK.

KENNY WELLNITZ: We got her done.

SPURLOCK: Where we headed to, now?

KENNY WELLNITZ: We're going down to the scales and weighing.

SPURLOCK: So the total number of calves is 200.

KENNY WELLNITZ: Two hundred.

SPURLOCK: That's got to be a hard decision?

KENNY WELLNITZ: Yes. It really is. Very hard. Very difficult.

SPURLOCK: You see their trucks.

Kenny's steers will be weighed in town where he will be paid based on the average weight per animal. This year he is selling two months earlier and hoping to get about 480 pounds per steer. In times like this, every pound and every dollar counts.

(COMMERCIAL BREAK)

SPURLOCK: Kenny Wellnitz is a rancher in Nebraska. To get through the drought he has had to sell off part of his herd early.

KENNY WELLNITZ: What they weigh, Doug?

UNIDENTIFIED MALE: 469, 478 gross.

KENNY WELLNITZ: Not quite as much as we hoped but close.

SPURLOCK: On average, cows weigh in ten pounds short what Kenny was hoping for.

UNIDENTIFIED MALE: I can write you a check.

KENNY WELLNITZ: That would word.

SPURLOCK: Just 470 pounds each.

KENNY WELLNITZ: Thanks, Doug.

UNIDENTIFIED MALE: Thank you.

SPURLOCK: So, how did you do?

KENNY WELLNITZ: We were with close. We had them in at 480. They were 469. It's 140 pounds light for the normal time of year that I would sell them.

SPURLOCK: Yes.

KENNY WELLNITZ: So, that's less money in my pocket but we will take this to the bank and deposit it and give us an opportunity to buy a little more hay and a little more time and decide what we're going to do with everything else.

SPURLOCK: Yes.

Kenny and Tammy will use the money from the sale to payback the loans they took on to get through the summer. While, it's not an ideal circumstance, it's one more step they can take to stay afloat.

KENNY WELLNITZ: We got the check.

TAMMY WELLNITZ: $165,578.

KENNY WELLNITZ: It goes very fast.

TAMMY WELLNITZ: Hey, Red. How are you?

KENNY WELLNITZ: Good to see you.

Hey. It's not everywhere you can get a hug at your bank.

Hi, Joyce.

UNIDENTIFIED FEMALE: Hi. How are you?

KENNY WELLNITZ: We will be doing a bit better after we talk.

UNIDENTIFIED MALE: Well, what is the verdict? What do you think?

KENNY WELLNITZ: We sold some calves.

We obviously didn't have any pastures. We were in a big hurry to do something. Normally we sell one load. We sold two. The drought just killed us.

UNIDENTIFIED MALE: How far ahead?

KENNY WELLNITZ: Two months. I got a $1.80 bid, considerably lighter than normal.

UNIDENTIFIED MALE: Right. I think it's a smart thing to do.

TAMMY WELLNITZ: Well, we didn't have no choice.

UNIDENTIFIED MALE: Exactly.

TAMMY WELLNITZ: We lost so much pasture.

UNIDENTIFIED MALE: Its good management in the drought. You need to not be thinking about how you're going to maximize profit but minimize loss. KENNY WELLNITZ: Right.

UNIDENTIFIED MALE: A severe cull on the cows and keep a smaller portion of your best.

TAMMY WELLNITZ: This is depressing.

UNIDENTIFIED MALE: That's the one thing about drought. It's so exhausting. And it just goes on and on and on.

KENNY WELLNITZ: Have you ever seen a drought in this area this been?

UNIDENTIFIED MALE: No. And I think the fact, our resources are not available from further away to get feed in, that's the saying. It goes back into Iowa, Indiana, Illinois so, it's not a good year. And then how many got worse with the fire. I mean, the fire kind of put the frosting on the cake for you guys. And look for extra cash. Your options keep getting restricted.

TAMMY WELLNITZ: You got to keep praying and hoping.

KENNY WELLNITZ: I don't know what we would do in another year like this.

TAMMY WELLNITZ: I guess I could get a deposit slip going here.

UNIDENTIFIED MALE: There you go. A pen.

There is different options you got for deferring income. If you decide you want to feed cows, you know, keep them and feed, we can term out some debt and get through. We will work with you whichever way you want to go.

KENNY WELLNITZ: Right.

UNIDENTIFIED MALE: So, what are you thinking?

KENNY WELLNITZ: With a loan and to make your payments, do you think the whole investment we will make in feed and everything else all winter, will we feel like idiots next summer if it doesn't rain?

UNIDENTIFIED MALE: I thought about that, too. You know, that's the thing that I think is really tough. You have to decide are we going to invest or, you know, just if you want to liquidate. That's up to you guys.

So, it's a tough decision.

KENNY WELLNITZ: Yes.

UNIDENTIFIED MALE: It's not a good year.

SPURLOCK: For Kenny and Tammy, liquidating the ranch seems unthinkable. They know that the best of what they are doing to just keep on keeping on and pray for rain.

(COMMERCIAL BREAK)

UNIDENTIFIED MALE: Had a leak in a hose.

SPURLOCK: After the talk with their banker, the Wellnitzs cull their herd further.

KENNY WELLNITZ: Ready To go, Morgan?

SPURLOCK: Yes.

So, today they're sending some of their cows to auction.

You're a rancher. You're a big rig driver. You got it all, man.

The older ones, the weaker ones, and cows that are not carrying calves.

SPURLOCK: Thirteen, yes?

KENNY WELLNITZ: Thirteen.

SPURLOCK: OK. Come on, cow. Come on. Come on.

KENNY WELLNITZ: Just give him a little bit of time so they can see where we want to go.

SPURLOCK: All right. Come on.

And who is buying these cattle?

KENNY WELLNITZ: Farmer feeders if they have any feed. A lot of the cattle that are bought right now will be grown over the winter?

SPURLOCK: So they will buy them and try to fatten them up and try to resell in the spring?

KENNY WELLNITZ: That's right.

SPURLOCK: OK.

We are heading to the Crawford live auction market. Cattle auctions that happen every weekend.

Kenny is headed back to the ranch. So, I'm going to stay to see how the auction goes.

Is there a certain number you're looking for, for the cattle?

KENNY WELLNITZ: I just hope the price has not gone down from last week.

SPURLOCK: What was it last week? How much on the cow?

KENNY WELLNITZ: We are on the 70s on this type of cattle.

SPURLOCK: OK. KENNY WELLNITZ: Seventy cents a pound.

SPURLOCK: All right.

KENNY WELLNITZ: All right.

SPURLOCK: See you in a bit.

KENNY WELLNITZ: See you later.

SPURLOCK: Thanks.

If Kenny can get 70 cents per pound per cow, the Wellnitz's will be in a good place to hold to the rest of their herd.

SPURLOCK: Luckily, the Wellnitzs got the price they need, 70 cents a pound.

Hey, man.

KENNY WELLNITZ: Hey, Morgan.

SPURLOCK: We did good today.

KENNY WELLNITZ: Great. How did we do?

SPURLOCK: It came in just over 16 grand.

KENNY WELLNITZ: Awesome.

SPURLOCK: Yes. The bulls did really well.

KENNY WELLNITZ: Yes.

SPURLOCK: And that's enough the hold on to a good chunk of the remaining herd for now. But that doesn't mean they can rest easy. As it turns out, 2012 was the driest and hottest year on record for Nebraska. But even now, the drought is persisting throughout the U.S. and most of the state. It was the worst fire year on record there in almost a century. About half a million acres burn to Nebraska costing at least $12 million.

And while the drought has retreated on the Mississippi, barges are now dealing with another catastrophe, flooding.

UNIDENTIFIED MALE: The forecast is for near record flooding.

SPURLOCK: But West ward the drought is relentless and the Wellnitzs have made more drastic decisions, selling off over 100 more cattle and moving half of the remaining herd to greener pasture in South Dakota.

And phase don't look to be getting better any time soon. Climatologists are predicting that 2013 will be another drought year in the U.S. and Nebraska forest service is preparing for another summer filled with potentially devastating wild fires. Overall, the cost of last year's drought are estimated in 50 to $100 billion nationwide. If it continues, it could become the costliest natural disaster on record in the U.S.

Whether you point the finger at manmade climate change or mother nature, most scientists agree that droughts are likely to continue, if not worsen, in the coming years.

KENNY WELLNITZ: Good to have you, Morgan.

SPURLOCK: Thank you.

I hope I wasn't too much of a burden.

TAMMY WELLNITZ: No.

SPURLOCK: It's been great. Take care, guys.

TAMMY WELLNITZ: Yes.

SPURLOCK: Bye-bye.

Kenny and Tammy and Cane, they are ranchers. It's in their blood. It's what they do. No matter what the future has in store, people like the Wellnitzs will take what comes, work hard and make the best of whatever hand they are dealt.

END