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Texas Feeder Says U. S. Cattle Herd May Shrink Further

The U. S. cattle herd may shr ink further from its current 50-year low before it starts to recover from the effects of recession, poor credit markets and in some places searing drought, a top cattleman said March 19.

“It could shrink further, I think it can absolutely shrink,” said Jon Means, president of the Texas and Southwestern Cattle Raisers Association (TSCRA), when asked if the national herd had hit bottom yet.

Speaking to Reuters on the sidelines of its annual convention, he went through a litany of woes affecting the cattle industry in Texas which he said could easily cost it over $1 billion before the year is out.

One recent estimate by the Texas AgriLi fe Extension Service puts the economic impact of drought on Texas livestock at $569 million alone over the four months from the start of November 2008 until the start of March 2009.

Parts of the state are being scorched by an historic drought, while hard economic times are turning American consumers away from high-priced steak toward low-priced hamburger.

“We have the erosion of our markets and the erosion of our credit. And then you have the time on a cow herd that it actually takes to get a calf. So you have a lot of time built into this equation (to rebuild the herd),” Means said.

“People don’t have the ability to borrow money and then when you sell in this kind of a market, you don’t have anything to come back with,” he said, referring to low beef prices.

U. S. government data shows the U. S. cattle herd to be at its smallest level in 50 years and the calf herd was at a 57-year low. Texas has the largest herd in the nation.

Means said high feed costs continued to weigh on the industry especially in drought-stricken parts of Texas, as farmers with grazing herds were forced to supplement their diet with expensive feed pellets.

Texas Governor Rick Perry has asked for disaster relief assistance from the federal government for drought-stricken farmers across the state.

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