The smallest cattle herd in 60 years is likely to push the price of beef, already at record levels, even higher.
Last week the U.S. Agriculture Department reported that there were around 91 million head of cattle in the U.S. at the beginning of the year. That number was down 2% from last year and is now at the lowest level since 1952.
It’s all due to the most severe draught in years that has devastated parts of Texas and Oklahoma, especially the supplies of grass and water needed to feed cattle.
Some experts are predicting that beef prices, already near record levels, will increase another 4% to 5%. Others have even predicted a 10% jump. And that’s after a 10% increase last year. Futures markets for live cattle show a gradual increase in prices over the next several months. Besides the poor weather, a spike in beef exports over the last several years has also contributed to the higher prices.
The weather has been so bad across much of Texas that a number of ranchers have moved their entire herd to Nebraska, a state that hasn’t felt the effects of the record dry weather like its neighbors to the south.
“If we’re going to survive, we have to go north,” Dennis Braden, general manager of Swenson Land & Cattle Co., in Stamford, Texas, told Reuters. “We have to go.”
The migration evokes other historic tough times for farmers and ranchers, like the Dust Bowl of the 1930s, when many Texans and Oklahomans were forced to leave their homes by massive dust storms across the Plains states. Texas alone has seen its herd drop 11% over the past year, the biggest decline in 150 years.
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The dwindling supply of beef has forced prices up over the past several years, with retail prices climbing by about 20% since 2009. For U.S. consumers, those rising costs will likely continue through this year.