Many producers are selling because they have no other alternative given current input costs and drought-stressed resources. Those with the ability to postpone sales for a couple of weeks may find the logistics improved, not to mention a better price.



“It’s hard to say how long the current bulge in cow liquidation will last,” Peel said.

“Most likely it will be a matter of no more than another two to four weeks. Unfortunately, many of the cows are going to slaughter, contributing to additional reductions in America’s already diminished cow herd compared to previous decades.”



Beef cow slaughter in Federal slaughter Region 6 — Oklahoma, Texas, New Mexico, Arkansas and Louisiana — is 16 percent higher for the year-to-date compared to last year.

In the most recent two weeks of data, beef cow slaughter in Region 6 has increased 35 percent compared to the same period last year.



“Drought conditions are having devastating effects on producers in the afflicted region, which in turn are affecting the beef cattle industry nationwide, and will continue to do so for several years,” Peel said.

“Total U.S. beef cow slaughter for the year-to-date is down 2.7 percent but the gap is closing because of large slaughter totals in the drought-afflicted south-central states.”



For most weeks of 2011, the national total beef cow slaughter decreased compared to last year. However, in the last four weeks of slaughter data, the week-to-week totals for beef cow slaughter have exceeded year-ago levels.



“By pushing beef cow slaughter close to last year’s record levels, the drought ensures additional herd liquidation that is deepening the hole from which the industry must start to rebuild,” Peel said.

“That has been a frequently asked and somewhat worrisome question: When is the U.S. beef industry going to rebuild its diminished cow herd?”



The July Cattle Report confirmed that the July 1 beef cow herd was down 1 percent from last year. However, this survey value likely does not reflect the accelerated liquidation that has occurred during the month of July.