January 31, 2012

US cattle inventory down to smallest in 60 years

After a drought in the southern US scorched pastures and prompted ranchers to shrink herds, the US cattle inventory fell to the smallest size in 60 years as of January 1.

Beef and dairy farmers held 90.77 million head of cattle as the year began, down 2.1% from a year earlier, the Department of Agriculture said Friday (Jan 27).

Texas, the biggest cattle-producing state, had its driest year on record in 2011. The drought destroyed pastures, and ranchers sold or slaughtered animals rather than pay high feed costs. Corn, the main ingredient in cattle feed, reached an all-time high in 2011.

The beef cow herd totalled 29.88 million, down 3.1% from 30.85 million in 2011 and the lowest figure in 50 years, the USDA said. The number of young, female cattle for beef cow replacement rose to 5.21 million, up 1.4%.

"Beef tonnage is just going to stay tight and low with this kind of a beef-cow herd," Lawrence Kane, a market adviser at Stewart-Peterson, said. "It gives us the very strong possibility of record-high beef prices." The USDA on January 12 forecast total beef output at 25.075 billion pounds this year, down 4.6% from 2011.