Is Slump over for US Beef Sector?

Could the slump that has hit US beef production over the last couple of years be turning?

The problems for the US beef sector started in 2011 with a drought that hit Texas. This saw cattle moved from Texas to more central areas and large cattle areas of Oklahoma.

However, a year later these region too were hit by drought which continued into 2013.

Last year, California, another major cattle producing region was also hit by drought together with some of the regions of Texas again.

According to Prof Chris Calkins from the University of Nebraska-Lincoln, during the drought herds were reduced or liquidated and cattle numbers dropped to their lowest number since 1951.

Texas lost 24 per cent from 2010 to 2014. Oklahoma lost 13 per cent and US beef production was down by five per cent in 2014.

However, the latest reports from the USDA show that the number of cattle and calves have risen by one per cent.

All Cattle and Calves were estimated at 89.8 million head, 1.274 million head or 1.4 per cent more than one year ago.

The industry had expected the number to be lower than a year ago in spite of huge incentives to retain beef cows and heifers and generally good pasture conditions to support that incentive.

The actual increase is well above the highest of the trade estimates, according to economist Steve Meyer.

Cows that have calved were also larger than the top of the trade estimates at 39.0 million, over 707,000 or 1.8 per cent higher than one year ago and the beef cow herd was the big contributor to that growth, increasing by 2.1 per cent or 608,000 head.

Heifers held for beef cow replacements numbered 5.777 million, 271,000 or 4.1 per cent higher than one year ago.

The number of beef heifers expected to calve in the coming year is up seven per cent.

According the Mr Meyer, the figures suggest larger beef supplies in 2016 and beyond.