National Cattlemen's Beef Association  |   August 25, 2011

Drought conditions throughout the South and even Midwest regions of the United States have taken a toll on the U.S. cattle inventory. Lack of forage and pasture has forced ranchers to cut their cattle numbers and, in some cases, liquidate entire herds. National Cattlemen‟s Beef Association (NCBA) Executive Director of Producer Education Tom Field said drought eliminates management options for cattlemen.

“Drought on a widespread scale does two things,” said Field. “One, it limits the opportunity for producers to have choices on how they manage their cattle. Secondly, at some point and time, it creates a cost structure where breakevens aren‟t even possible in these historic high markets and liquidation becomes an option.”

According to the U.S. Department of Agriculture‟s most recent Cattle on Feed Report, cattle and calves on feed for slaughter in the United States for feedlots with capacity of 1,000 or more head totaled 10.6 million head on Aug. 1, 2011, which was 8 percent above Aug. 1, 2010. This is the third highest August 1 inventory since the series began in 1996. The report emphasizes the seriousness of the drought situation.

Field said drought is not the only reason cattlemen are reducing numbers. He says producers liquidate when the “burden of accumulated aggravation” becomes too heavy. He said the sources of aggravation are many, including the current unfriendly regulatory environment, ethanol policy, high feed costs and a government that seems intent on creating barriers to free enterprise.

Field said the situation cannot be downplayed but noted the consumer impact has been minimal due to the efficiency of modern beef production.

“Producers have done very well at creating higher per animal productivity levels, which has offset herd losses. For example, over the past two decades, we have increased carcass weights by an average of six pounds per year,” said Field.

He also believes that the impact of drought will likely be a short-term dilemma for cattlemen and the entire industry.

“I believe herd expansion will occur in regions not affected by drought, which will also offset herd losses in drought inflicted areas. Once conditions improve, I am hopeful producers who were forced to liquidate will return to the business,” said Field. “We will lose some producers and capacity in the short-term but I believe many of them will be back. At NCBA, our producer education team is ready and available to help producers with important management decisions and we take that role very seriously.”