In 2011, it was centered primarily in the Southern Plains. But this year, 70 percent of the US cattle inventory is located in regions of drought, claims Kevin Good, senior market analyst for CattleFax during the recently held National Cattlemen’s Beef Association summer conference in Denver.
“The widespread drought has ultimately led to the worst pasture conditions in the past 15 years,” he said. “The US calf crop is down 800,000 head. The bottom-line, when all is said and done, the cattle herd will decrease by about 500,000 head. This is compared to a 900,000 decrease a year ago, so we are seeing a liquidation, but at a slower pace than last year.”
Although the ongoing drought has the US beef industry concerned, there is reason for optimism, Good said. To date, consumer demand for US beef is still strong with solid retail and foodservice sales. As long as consumers continue to demand beef, cattlemen are given reason to remain in the cattle business and avoid liquidation.
Cattlemen are facing serious challenges, however NCBA is encouraging them to trust market signals and maintain cowherds if possible, said Forrest Roberts, NCBA CEO.
“Consumers are sending very clear signs to cattlemen to hang tough and continue producing the protein they prefer most,” Roberts continued. “There is no doubt this will be tough. But cattlemen are tough people and I am confident we will weather this storm and rebuild the US cowherd once weather conditions improve.”
