What is in this article?:
- Beef shortage means hold on to the cows
- Has taken long time
The clear message for beef producers is to hold on to cows as the beef industry has a positive outlook for a number of years to come.
The quantity of beef available to consumers in the United States has declined a startling amount in recent years, and that trend is going to continue.
Unfortunately, even higher retail beef prices can be expected for consumers, said Chris Hurt, a Purdue University Extension economist.
"The declining supplies are related to continuing liquidation of the cow herd in the past few years due to high feed prices, a weak U.S. dollar that is spurring beef exports, and, of course, drought in the Southwest and Southeast.
“Declining supplies will support prices across the cattle complex at new record highs in 2011 and again in 2012," he said.
The USDA estimate of the inventory of beef cows on July 1 showed a further decline of 1 percent in the past year. Since 2007, when feed prices were still moderate, beef cow numbers have dropped 5 percent.
More alarming is the decline in beef available to U.S. consumers as cow numbers were dropping and foreign consumers have been buying much more of the U.S. production.
In 2006 and 2007, before feed prices surged, U.S. consumers had over 65 pounds of beef available per person. This year, USDA analysts expect that to be down to 57.9 pounds and to drop again to only 55.6 pounds per person in 2012.
"This represents a 15 percent reduction in available supplies during the high-feed price era. The drought in the Southern Plains and Southeast this year is continuing the herd reduction due to extreme shortages and high prices of forages. In addition, recent heat stress is thought to be causing higher death losses that will also contribute to smaller supplies," he said.
Beef trade is back as a contributor to beef prices as well. In 2003, beef exports reached a record, representing 9.6 percent of domestic production. The discovery of a BSE cow late that year caused most buyers to shun U.S. beef with exports dropping to just 2.3 percent of production in 2004.