In spite of January rains in South Texas, Texas AgriLife cattle specialist Dr. Joe Paschal says drought conditions remain high and says it’s far too early for producers to start rebuilding cattle herds.

“If you look at the latest drought monitor you will see South Texas is still in the red when it comes to needed moisture and I’m afraid it’s far too early to be thinking about rebuilding herd levels. Even with continued rainfall this month and into the spring season, most producers are going to need to replant forage in their pastures,” he said.

Paschal and other AgriLife officials agree that successfully rebuilding beef production in Texas depends on changes in lending policies that will affect availability of capital to reinvest in cattle; balancing forage recovery with cattle inventory recovery; systematic approach to evaluating options for securing replacement females; and developing a logical and systematic system to evaluate the worth of available replacement females.

“Even in the eastern parts of the state, around College Station for example where they have received greater rainfall, it’s still going to take some time for forage to recover before we can think about rebuilding herds to pre-drought levels,” Paschal adds.

He says producers will have the urge to rebuild as soon as possible, but it will be important to match rebuilding strategies with management of forage resources that allow for pasture recovery. Whatever the source of replacement cattle, he warns pasture recovery will need to be the priority.

Meanwhile, Peel says choice boxed beef has been trapped in a narrow range between $192 and $198 per hundredweight for the past several months. But while retail beef prices were flat to slightly lower through most of 2012, they jumped sharply in November, a trend that will continue this year.

"It is not really a question of whether retail prices will go up but rather a question of how much and how fast," he said. "Beef demand remains the biggest unknown in the beef industry and only time will tell just how severe the squeeze will get.”

In spite of herd production in both states over the last two years, Peel says between Texas and Oklahoma there is still around 5.5 million head of beef cattle.

“I think we will see a day when the beef industry recovers across the region, but there are so many factors involved it’s impossible to say exactly when that will happen. But there is still optimism among producers and when the rains come and forage becomes available again then we will start to see a return of better days,” he predicts.

“There are still a lot of folks out there who think sustained rainfall this year will be forthcoming,” Paschal agrees. “And the sooner the rains come the sooner we can gain a lot of lost ground. But it’s going to take some time to rebuild.”