PUEBLO, Colo. (AP) - Ranchers faced with drought and high feed costs are culling their herds deeper and selling off lighter cattle.

While demand and prices for beef are high, the number of cattle in the United States is at the lowest point in 50 years. In southeastern Colorado, some ranchers who began building up their herds in the last two years are again downsizing.

The glut of cattle on the market is starting to drive down prices ranchers get, even though hamburger and steaks sell for more in the stores.

Prices for hay and corn are also high, and without grass on much of the grazing land in this corner of the state, there is little choice other than to reduce the size of herds.

"The biggest part of it in our area is that there's no water," said Dan Henrichs, president of the Pueblo County Stockman's Association. "A little bit of rain will grow grass, but you need a lot of rain to fill up a dugout dirt pond."

One rancher was pa ying $70 per 1,000 gallons to haul water - about 10 times the going rate for the upper end of urban water costs - to what remained of her herd before she finally sold off the rest, he said.

"This spring we sold off 60 head of cows because the price was good," Henrichs said. "I didn't want to get behind the curve like we did in 2002."

The last big sell-off of cattle came during the historic drought of 2002. This year, much of the state saw near-record snowpack and ample summer rains.

Although a few people are buying cattle, even those who were building herds last year are selling because of the tough conditions. Older cows, in particular, are most likely bound for slaughter.

In the Arkansas River basin, a drought that began a year ago still persists. While there have been some storms, precipitation remains below normal and the lack of moisture over the winter months was devastating to grasslands.

"The further south you go, the worse it is," said T im Turpin, whose Lamar trucking company's 25 trucks have been hauling loads of cattle from Texas and Oklahoma to northern states, where precipitation has been plentiful. The current drought has been most severe in Texas, but stretches into Baca, Las Animas and Huerfano counties in Southeastern Colorado.

"We've been taking a lot of cattle up to Montana and South Dakota," he said. "I don't know if they're taking them there to slaughter or to other pastures."

With cattle being sold, slaughtered or moved by the thousands, the impact could be dramatic next year. If ranchers severely reduce the number of cow-calf pairs, it could take years to rebuild herds.

"It's going to be a domino effect, when you see all these cows being taken out," Turpin said. "The cuts are deeper this year. Usually, we have a big spring, and then it tapers off. But it's been busy all through the summer."

Small patches of the Arkansas Valley may be unaffected.

Dale Mauch, who far ms and ranches near Lamar, said the grassland in that area has been holding up well.

"You go 25 miles south of here and they're hurting, though," he said.

After drought emergencies were declared, some conservation reserve land was opened to grazing. The lack of moisture, however, has made it difficult to find suitable pastures in the region.

It will take a while to measure the impact of the drought, said Tom Sabel, a statistician for the U.S. Department of Agriculture in Denver.

"I've just heard the anecdotal part of it. It appears they are culling cows normally in the northeastern part of the state," he said. "I was just down in the southeast, and things aren't that good."

Sabel said Colorado bucked a steady national trend to reduce the size of cattle herds by adding more calf-cow pairs in 2010. The total number of cattle in the state in January, when statewide totals are finalized, was 2.65 million, about 2 percent above the previous year.

That could decrease next January, with sell-offs from the Arkansas Valley.

"You have an unusual situation with the cattle prices so high, and the price of grain and hay also up. On top of that, hay is hard to find," Sabel said.

Ranchers don't need statistics to know it's bad.

Doug Hasser, who ranches south of Lamar, moved some cattle 200 miles east to Pratt, Kan., only to find that lack of rain had dried up pastures there, as well.

"I sold them at Pratt because there was nothing here to move them back to," Hasser said.

Farmers in Nebraska are selling hay in Texas for more than twice the price of a year ago - up to $330 a ton.

"There's no feed to be bought," Hasser said. "From Pratt, Kansas, south to Dallas, Texas, north to Nebraska there have been record sales for the past 75 days. ... We're looking for the market to get worse."

Copyright 2011 The Associated Press.