According to the U.S. Department of Agriculture data, the U.S. beef cow herd dropped to its lowest level since 1962.
Ranchers increasingly sent cows to slaughter last year, instead of keeping them to reproduce, as dry weather reduced the amount of pasture available for grazing in the western United States and on the Plains. At the same time, a tight labor market limited slaughtering at meatpacking plants.
Declining supplies of cattle are expected to keep meat prices high for consumers, analysts said. Some analysts are predicting record high prices for cattle in 2023.
"We're going to be dealing with some sharp beef-supply declines for the next three years straight and therefore higher beef prices," said Rich Nelson, Chief Strategist for commodity broker Allendale. "There will be no help in the coming years for the consumer."
There were 28.9 million beef cows as of January 1, down 3.6% from a year earlier. It was the smallest herd size for that date in 61 years. Overall, the total number of cattle and calves across the country fell 3% from a year ago to 89.3 million, the lowest since 2015.
According to Rabobank, a significant shift toward wetter weather will help break the trend of liquidating cow herds. Last year, nearly 13.4% of the cow herd was culled - a record. Cattle producers will not make "meaningful progress" in rebuilding the U.S. herd until 2025 at the earliest, says Rabobank. Meanwhile, restaurants, retailers, and importers will increasingly compete for limited supplies of U.S. beef.
EDITOR’S TAKE:
These same predictions were echoed last week at the National Cattleman’s Beef Association meeting in New Orleans. The tremendous amount of culling, especially heifers, reduced the ability to quickly replenish the overall herd. That is simply a function of the reproductive cycle and feed out period required to bring cattle to market weight.
That said, this equates to great news for both cattle producers and dealers selling trucks to cattle feeders! We are all well aware that rising input costs will lower margins some for these cattle producers, despite the higher selling price. A perfect setup for a CAD member to shout about AgPack® from the roof top. Let them know about the exclusive rebates and discounts only available through you, a CAD member, which, of course, helps maintain better margins and profitability for everyone.
