The shifting production of corn for ethanol, the drought and wildfires are having an effect on cattle producers:
The U.S. cattle herd, including dairy cows and beef animals on feedlots and ranches, totaled 100 million head as of July 1, the fewest at that time of year since at least 1973, the USDA said July 22. As of July 1, the U.S. feedlot herd of beef cattle totaled 10.451 million head, up 3.8 percent from a year earlier, the USDA said in a report July 22, as drought forced ranchers to sell more livestock. Beef producers are culling cows and young females, which means smaller supplies for the next two years or longer, according to Steve Kay, the publisher of Cattle Buyers Weekly, a trade magazine based in Petaluma, California. The cattle and calf herd next year may fall to the lowest since 1952, increasing costs for meat processors including Tyson Foods Inc. and Cargill Inc., he said. “The drought has dried up any hopes for rebuilding the beef herd this year or next year,” Kay said in a telephone interview. “Hay is getting shorter in supply and prices are running higher. The herd liquidation is increasing. The falling cattle herd is going to put more stress on the cattle-processing industry. Beef is going to continue to be more expensive for U.S. consumers.” Feedlots also are accelerating sales to meatpackers, which will ultimately result in lower beef supplies and may send cattle to a record by the fourth quarter, said Don Close, a market director with the Texas Cattle Feeders Association in Amarillo.