Drought pushes US beef cow herd inventory below 60 year low

The latest drought monitor (September 7, 2021) shows that 36% of the US is in drought level D2 or higher. Most of this is concentrated in the west with 80% D2 or higher and plains states at 42% D2.

Widespread drought in 2021 has caused another liquidation cycle. Beef cow slaughter year to date is 9% above a year ago. Cow slaughter is now above the 2010-2013 level, the last significant liquidation that brought the US beef cow herd down to a 60-year low in inventory, said John Nalivka, president of Sterling Marketing. “This is serious business; we are liquidating this cattle herd in this country” said Nalivka.

Drought a decade ago resulted in record prices in 2014. Nalivka believes fewer cattle will produce higher prices but not like the levels seen in 2014. There are several factors according to Nalivka. We will not take the total cattle numbers below 88 million head – we have a larger total meat supply – chicken, and pork and we have another protein source. Plant based protein and cell-based protein were not around in 2014. They only occupy 1% to 2% of the protein market but if retail beef prices continue to rise their share may rise, according to Nalivka.

Source:

Drovers June/July 2021

Market Report Northern Ag Network September 13, 2021 6:20 am