August 30, 2022

Texas ranchers forced to slaughter cattle due to dry pastures

Ranchers in Texas state, US, are sending more cattle to slaughter as a result of the drought, which will likely lead to an increase in beef prices in the long run as a result of a decreasing supply from the largest cattle region in the country, Nasdaq reported.

According to the United States Drought Monitor, more than 93% of Texas has been experiencing drought since mid-July. More than 26% of Texas was experiencing the worst conditions as of mid-August, which were characterised by widespread loss of pastures and crops as well as water shortages.

Approximately 54% of all US cattle were experiencing some form of drought as of August 16, up from 36% a year earlier, even though conditions were particularly severe in Texas. Nationwide cattle slaughter is high, which temporarily boosts supply but foretells tighter supplies in coming years.

Paul Craycraft, co-owner of the East Texas Livestock Auction in Crockett, said dry pastures deprive cattle of a crucial food source, and make it more expensive for ranchers to supplement their herds' diets with hay and feed.

Craycraft said about 75% of the cows sold at auction in the last two months were slaughtered, up from 30% to 40% in typical years.

As the drought got worse, Wesley Ratcliff, the owner of Caney Creek Ranch in Oakwood, said he started off this year by selling 50 of his 500 cows.

David Anderson, an agricultural economist at Texas A&M University, said consumers can anticipate long-term price increases as a result of what is occurring in Texas, which, according to the US Department of Agriculture, is home to more than 4.5 million beef cows, or 14% of the country's stock.

He said over the next several years as the effects of this are felt, the pressure will be on for higher prices, higher cattle prices, and higher beef prices. He also said beef supplies are going to be more scarce. Without any other factors, lower supplies of beef translate into higher prices.

-      Nasdaq