BLOOMING GROVE, Texas » Gary Price is a rarity among cattle ranchers these days. He’s making money on his herd of 200 cows in this tiny town about an hour south of Dallas-Fort Worth.

"The market is very good, and we’ve been able to keep what we’ve needed to buy, feed and such, to a minimum," Price said, as he strolled in a pasture on his 77 Ranch, which is planted in native grasses, stands of mesquite and a fair number of what most people would call weeds. "That’s benefited us during this drought that has pushed prices higher."

More typical are Don and Marilyn Smith, proprietors of the Starridge Land and Cattle Co. about 100 miles northeast in Sulphur Springs. Don Smith has hung in, paring just 10 to 15 percent of his herd over the three years that drought has severely damaged this state, but it has not been easy.

"If we don’t get a normal rain this year, we will have to make some decisions," Don Smith said.

The persistence of the drought here has forced ranchers to use all the creative techniques they can muster to survive. For some, it has meant knowing as much about land management and grass as they know about the bloodlines of their herds. King Ranch Blue Stem, for example, makes for great grazing but is invasive; Snow on the Prairie aerates the land but cattle will not eat it.

As Price put it, "You’re now marketing the grass through the cow."

For others, it is knowing the right moment to sell calves or to gamble on something called "rain insurance."

The cattle herd nationwide is at its lowest level in 60 years, and nowhere is that more apparent than in Texas, the nation’s largest cattle-producing state. The Texas inventory of cattle and calves was 11.3 million on Jan. 1, a decline of 5 percent from a year earlier and the lowest level since 1967, according to the Agriculture Department.

The state’s beef cattle inventory fell even more, to 4.02 million head, down 12 percent from 2012, when similarly precipitous declines occurred. The sharp contraction, brought on by two years of drought in Texas followed by a year of drought across the Great Plains that drove feed prices sky high, has left some wondering if the state will ever again have herds as large as it once boasted.

Last year, when the Texas A&M University extension service offered a series of educational programs called "Rebuilding the Beef Herd," it had trouble attracting any interest. "It just kind of stagnated because it never did rain," said Ron Gill, a professor and extension service specialist. "It was all about preparing for when things got better, and they just haven’t."

The situation is so dire that several times during a drive around his ranch, tears sprang to Don Smith’s eyes as he spoke about the challenges he has faced maintaining not only his beef herd, which now stands at roughly 130 cows, but also some remaining dairy cows. That business, too, is no longer profitable.

"We can get two inches of rain and, in 24 hours, it’s all dry again," he said.

Don Smith needs 45 to 50 inches of rain a year to have enough forage to feed his herds and fill the "tanks," as ponds in this part of Texas are called, from which the animals drink. In 2010, his 450-acre ranch got 16 inches of rain; the next year, it got 12 to 14 inches. Half of the 200 trees on Starridge Ranch when the drought started have died.

Before the drought, he made as many as 1,500 round bales of hay off his property, about a third of which he sold at a profit. He made just 46 bales in 2011 and had to buy the rest at $60 to $80 a bale.

Water, piped in from the municipal system, added $200 to $300 a month to the Smiths’ bills.

The higher costs of maintaining the herd forced Don Smith, like other ranchers, to sell his calves to feedlots at lower weights, which pinched profits but meant he spent less on feed and water.

The upshot? "We’re not doing any better now with $1,000 calves than we were at $600, " Don Smith said.

This year, the Smiths did something they had never done before. "We bought rainfall insurance," Don Smith said. Such insurance, which pays out based on expected rainfalls plotted over a grid, may not help him this year. Starridge has received more than six inches of rain, which is about normal for the time of the year.

Price and his wife, Sue, in Blooming Grove, said they would not count on normal rainfalls ever again. The Prices run fewer cattle on their 2,500-acre ranch than they could, with roughly 12 acres for each animal, and they look for ways to manage their land that will help them avoid buying food and water for their cattle.

"I almost think of Gary as more of a land manager than a rancher," said Gill, who is himself a rancher with 300 head of cattle on a 3,000-acre ranch.

Most ranchers, Gill said, focus on the lineage of their animals and their weight. "The glitz and glamour is in the genetics," he said. "The value they see in what they sell is in the calf, not their forage."

But with land these days commanding heady prices as financial investors snap it up to plant high-value crops like corn and owners put more into conservation easements, finding land cheap enough to simply raise forage for cattle is hard.

A parcel that the Prices would have liked to add to their ranch, for instance, recently was bought by a Florida couple as a retirement home. "What I could pay to use it for our cattle wasn’t close to what they could pay to make a vacation home work," he said.

Still, the Prices have had to buy hay to feed their cows during only two weeks in the last three years. Their animals graze the "bunch grasses" that were native throughout the prairie when the buffalo roamed and that Price reintroduced on his ranch after admiring their resilience on a small patch of virgin prairie left on his property.

Those grasses, which grow to 5 or 6 feet tall, have long roots that can tap into water far underground. Though they live a long time, when such grasses die, the roots deteriorate, helping to aerate the land for better water penetration. The thicker, taller grasses also create a kind of webbing that slows runoff, keeps sediment out of lakes and tanks, and creates shade that protects lower growing grasses and helps the ground retain water.

At times, Price rotates his cattle twice a day to give the grasses a chance to recover. He has not had to cull his herd, maintaining about 200 head throughout the drought, though he has not replaced cows as quickly as he would have if rainfall patterns were more normal.

He also has developed another source of revenue: hunters from Dallas and Fort Worth who pay to shoot the quail that like to nest in the bunch grasses on his land.

The Prices have won several awards for their land management practices. "I believe this is the best way to do it, not just for profit but also for sustainability," Price said. "But every ranch is a specific entity with its own resources — its own shade, its own water."

Asked whether he thought the Texas cattle industry would ever recover its former glory, Price thought for a moment. "We’re all very concerned about the decline in cattle numbers and also about the losses of infrastructure, feedlots and slaughtering facilities," he said.

Smith expressed sadness at what had happened to the business he loves. The Smiths have no children to take over Starridge, and Smith, who is 69 and has walked with the help of a cane since a battle with polio in 1949, worries about what will happen to it when he can no longer do the work to keep it going.

"Beef will come back," Smith said. "But who’s going to be left to produce it?"

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