Drought Ramifications
Drought to have multiyear effect on rebuilding of the U.S. cow herd.
Ongoing drought conditions in the Southern Great Plains states make it increasingly likely the rebuilding of the U.S. cow herd will take four years or more.
For the year to date, beef cow slaughter decreased 4.4% nationally, while beef cow slaughter in Region 6, which closely corresponds to the drought area, increased 11.7%.
Derrell Peel, Oklahoma State University (OSU) Cooperative Extension livestock marketing specialist, said the contrast between beef cow slaughter nationally, and in the drought region clearly indicates that the effects are significant.
"At a minimum, Region 6 beef cow slaughter at the same rate relative to the cow herd as last year — which implies additional herd liquidation — would suggest about 49,000 fewer head than last year," he said. "Without the drought the national slaughter rate would be down 7.7% compared to the observed rate of 4.4% for the year to date."
Moreover, a Region 6 slaughter rate closer to the long-term average regional rate would suggest that an additional 100,000 head of cows have been added to total beef cow slaughter so far this year because of the drought.
For the entire year of 2011, it appears that beef cow slaughter could have decreased approximately 10% year over year in the absence of drought, a value that is consistent with herd expansion.
"The additional 100,000 head of culling already estimated implies that the annual beef cow slaughter rate would be limited to a decrease of 7% to 8%, and that assumes no additional drought-induced culling for the remainder of the year," Peel said.
However, the drought is still very much in place and more culling is likely.
"Projecting the current rate of slaughter for the Southern Great Plains states for the rest of 2011 would result in a national beef cow slaughter rate that decreases only 3%," Peel said.
Peel's analysis indicates the resulting drought impacts are likely to have implications on the cow herd for several years.
"My early projections showed that it might have been possible to stabilize the beef herd this year but only under the most favorable circumstances," he said. "Even without a drought it was likely that the U.S. cow herd could easily decrease another 0.5% to 1% in 2011. Depending on how much additional drought liquidation occurs, beef herd liquidation upwards of 2% is increasingly likely."
Doing the math indicates that if the effects of the drought were to stop now, the additional cow slaughter that has already occurred would likely result in beef herd liquidation of close to 1.5% for the year.
"However, the additional herd liquidation will extend and exaggerate the current reduced animal inventories by at least another year," Peel said.
In short, herd growth rates will be limited when they finally do start. Peel said that makes it increasingly likely that any significant herd rebuilding will take at least four years to six years.
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