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American cattle herds smallest since 1951, says USDA

By Kitty So , 05-Feb-2014

Related topics: Industry & Markets, Environment, Livestock, Beef, United States

The USA continues to face drought and declining cattle herds, according to recent US Department of Agriculture (USDA) reports, although the industry says ranchers could begin rebuilding herds soon.

US sees cattle herds declining further

US sees cattle herds declining further

An annual cattle report, released on Friday (31 January), shows there were 87.7m head of cattle and calves in the USA on 1 January this year, down 2% from the previous year – “the lowest 1 January inventory of all cattle and calves since...1951”. Beef cows, at 29m, were down 1% from last year. However, beef replacement heifers, at 5.5m, were up 2%.

This follows a 24 January report noting that, as of 1 January, cattle and calves being finished for slaughter in the USA in feedlots with capacity of 1,000 or more head (totalling 10.6m head) was down 5% from last year. Meanwhile, inventory was 5% down in the same period.

 
“It’s pretty darn significant,” said James Robb, director of the Livestock Marketing Information Centre whose associate members include the National Cattlemen’s Beef Association and the Texas Cattle Feeders Association.

Kenneth Mathews, USDA cattle and beef economist, noted the scarcity had driven beef prices to record levels. For instance, the five-day moving average for wholesale choice and select cutout values was US$196.69/100lb just before Christmas, and exploded to about US$240.05/100lb as of 22 January. Prices had dropped as of 31 January to US$230/100lb.

US cattle producers have struggled with years of drought, currently in the country’s west and south west. As a result, producers have reduced the size of herds, especially in the past few years, added Mathews. Robb said imports of cattle from Mexico – also struggling with drought – have been low.

Rising feed prices have further exacerbated the situation, driven by the recession and the US renewable fuels mandate that has diverted 40% of corn since 2007 to produce ethanol, said Professor C Wilson Gray, economist at the University of Idaho.

He noted the US’ large corn crop last year has reduced feed costs, prompting ranchers to hold back heifers from the market to rebuild herds – although Robb added this would take a couple years to reach the market.

Gray added the lack of cattle had led to closures of feed yards and packaging plants – for instance, the National Beef Packing Company announced on Friday (31 January) that it will close its California beef processing facility in April, impacting about 1,300 employees, according to a company communiqué.

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