U.S. cattle supply lowest in 60 years, USDA reports - East Valley Tribune: Business

U.S. cattle supply lowest in 60 years, USDA reports

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Posted: Thursday, February 3, 2011 3:30 pm

OKLAHOMA CITY - The country's calf crop has been depleted to its lowest level in 60 years, according to the U.S. Department of Agriculture, and it could take several years to replenish supply.

Industry experts say high market prices for cattle have persuaded many ranchers to sell rather than maintain heifers for breeding. The 2010 calf crop was estimated at 35.7 million head, 99 percent of 2009 and the smallest since 1950.

"Cattle are bringing more money on the market than they ever have before. It has created an incentive to sell," said Jack Carson, spokesman for the state Department of Agriculture, Food and Forestry. "The good news is they (ranchers) are getting more money for their cattle today. But tomorrow, they won't have any to sell."

Derrell Peel, an Oklahoma State University agricultural economics professor, said U.S. cattle ranchers have been liquidating since about 2006 and are at a point where they critically need to rebuild inventories. "The industry really has no choice now but to save some animals in order to maintain production," he said.

Consumers haven't yet felt the pinch at the meat counter, but they will, he said. Starting this year, the retail price of beef could increase 4 to 5 percent depending on consumers' willingness to pay higher prices.

Difficult decision

Blackwell rancher Harold Wooderson said many factors are weighed when deciding whether to sell or keep a heifer, but it boils down to money.

Cattle prices rose 37 cents to settle at $109.37 Tuesday on the Chicago Mercantile Exchange.

Selling could give ranchers a chance to catch up on debts, but holding onto it could pay off in the future, he said.

Ranchers may also consider whether they have the resources, such as land, feed and water, to invest in a heifer, said Scott Dewald, executive vice president of the Oklahoma Cattlemen's Association.

Current statistics show ranchers have not begun saving animals for replacement.

As of Jan. 1, there were 92.6 million head of cattle and calves in the U.S., the lowest Jan. 1 inventory since 1958, according to the USDA. There were 5.2 million head of beef replacement heifers, 95 percent of one year ago.

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