Cattle ranchers are left with no choice but to shrink their herds due to drought and the increasing costs of beef production. Beef prices in the U.S. are likely to climb, and there may be a shortage of beef in the near future.
The Wall Street Journal reported that the U.S. beef production will suffer more in the following months now that farmers are reducing their herd sizes.
The federal government’s data shows that the growing production costs and other related expenses are forcing the ranchers to sell their calves to feedlots, as a result fewer cows are left behind for slaughter.
It is being expected that the situation will get even more worse by the end of this year and early 2023, that America might have to face a severe beef shortage.
Moreover, grazing pastures all over the U.S. have been ruined because of continuous drought, due to which farmers are being compelled to spend more on supplemental feed.
It is being forecasted that by next year, there will be a 7% reduction in beef production and the prices of cattle will also increase. This spells trouble for meat packing businesses like Cargill Inc., Tyson Foods Inc., JBS USA holdings Inc., and National Beef Packing Co.
Many believe that American consumers are already suffering as the growing production costs are already being passed on to them.
As cattle rearing gets more expensive, less cows are raised for slaughter, as a result less meat will be produced and beef prices will likely go up. Prices for ground beef and chicken are already much higher than ever before.
A fourth-generation rancher, Jeanie Alderson from Burney, Montana, claimed that in the last few months, she had to sell around 75 aging female cows from the herd of 250 cows that she owns.
Usually, she used to purchase new cows in order to replace the ones that she sold but this year the cost of maintaining cows has increased so much that she can’t afford to get more cows in her herd.
Alderson also highlighted that wildfires are destroying the pastures in southern Montana and as a result many ranchers have to rely on the expensive supplemental feed. She added that ranchers are left with no option but to decrease the size of their herds because of these expenses.
The U.S. Department of Agriculture reported that many ranchers reduced the number of beef cows from their herds during the current year’s first quarter because of higher costs and drought.