Lean Times for U.S. Cattle; Herds have been Reduced to 1952 Levels, and the Price of Beef Is Expected to rrse
The nation's cattle inventory, scorched by a record-breaking drought in Texas, has plummeted to a 60-year low, triggering concerns that beef prices will spiral higher for consumers.
The U.S. Department of Agriculture reported that 90.8 million head of cattle and calves were counted nationwide as of Jan. 1. That's 2 percent less than the count a year earlier and the lowest Jan. 1 inventory since 88.1 million cattle were estimated in 1952.The record low stemmed from several factors - production costs stayed high, as did sales prices for cattle. But a record-breaking drought in Texas and Oklahoma, the nation's two biggest producers of beefcattle, was probably the deciding factor.
John Anderson, senior economist with the American Farm Bureau Federation, said the drought pushed what might have been a minor decline in cattle numbers much deeper.
Texas, Oklahoma and New Mexico, which is where the drought centered most of the year, saw beefcow numbers fall by double-digit rates after ranchers lost their pastures to the dry spell and then their water.
"It's not easy to haul feed, but it's just about impossible to haul water," Anderson said.
Tracking cow numbers
David Anderson, a livestock economist with the Texas AgriLife Extension Service and no relation to John Anderson, said the state lost 660,000 beef cows, according to the USDA estimate.
Cows are a prime measure of the beef industry's health because they are the productive units of the herd and often are the last animals sent to slaughter.
David Anderson said the USDA number amounts to the largest single-year decline in Texas beefcows ever.
On a percentage basis, the 13.1 percent reduction in beef cow numbers ranks second - beaten only by an 18 percent drop in 1934, the Texas economist said.
"It's a big hit," David Anderson said.
Not all the cattle were sent to feedlots and fattened up for slaughter, although USDA numbers show Texas had about 100,000 more head of cattle on feed Jan. 1 than at the same time last year.
David Anderson said more than 1.1 million head of cattle were moved from Texas to other states with greener pastures last year. That's 287,000 more than 2010, including about three times the number of breeding cows leaving the state.
Anderson said those cutbacks are a reflection of how severe the drought was in Texas. He said it could result in more herd reductions this year if rains don't return.
Texas' beefcow count fell to nearly 4.4 million, still more than twice the level of the second-ranked state. Total cattle and calves in Texas fell by 1.4 million to 11.9 million.
Supply vs. demand
The declining cattle count means retail beef prices could continue growing, particularly if export demand stays strong.
Bloomberg News reported last week that wholesale beef prices have risen 6.4 percent in the past 12 months and hit almost $1.98 a pound on Nov. 23, the highest it had been since at least 2004.
The USDA in its most recent Food Price Index report said that meat prices grew by 8.8 percent in 2011, with beef and veal prices jumping by an average of 10.2 percent.
'People do buy less'
Chris Waldrop, director of the Food Policy Institute at the Consumer Federation of America, said with feed prices for livestock so high and beef inventories so low, consumers can expect to pay higher prices for beef and other meats for the foreseeable future.
"That could make it difficult when people are struggling to make ends meet," Waldrop said.
But David Anderson said he does not expect beef prices to jump as rapidly this year as they did last.
"With higher prices, people do buy less," the economist said.
He also said beefexports could slow down some after expanding by more than 20 percent last year.
