The inventory of heifers for milk-cow replacement totaled 4.53 million on Jan. 1, down 0.9 percent from a year earlier, the USDA said.
BY ELIZABETH CAMPBELL | BLOOMBERG NEWS
The U.S. cattle inventory fell to the smallest size in 60 years as of Jan. 1, dropping more than expected, after a drought in the southern U.S. scorched pastures, spurring ranchers to shrink herds.
Beef and dairy farmers held 90.77 million head of cattle as the year began, down 2.1 percent from a year earlier, the U.S. Department of Agriculture said Friday. That’s the smallest herd since 1952, the USDA said.
“We had one of the biggest droughts in Texas this past year,” Chad Henderson, a market analyst at Prime Agricultural Consultants in Brookfield, Wis., said in telephone interview. “Guys have been ripping up pasture and planting crops. It’ll take years for this thing to build back up.”
Texas, the biggest cattle-producing state, had its driest year on record in 2011. The drought destroyed pastures, forcing ranchers to sell or slaughter animals rather than incur high feed costs. The price of corn, the main ingredient in cattle feed, reached an all-time high in 2011.
The beef-cow herd totaled 29.88 million, down 3.1 percent from 30.85 million a year earlier 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 percent.
“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 from Yates City, Ill. “It gives us the very strong possibility of record-high beef prices.”
The USDA on Jan. 12 forecast total beef output at 25.075 billion pounds this year, down 4.6 percent from 2011.
Before today, wholesale-beef prices rose 6.4 percent in the past 12 months and touched $1.9707 a pound on Nov. 23, the highest since at least 2004, according to the USDA. Retail beef reached an all-time high on an annual basis in 2011 and will climb through next year, according to the Livestock Marketing Information Center in Denver.
The inventory of heifers for milk-cow replacement totaled 4.53 million on Jan. 1, down 0.9 percent from a year earlier, the USDA said.