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DROUGHT’S LASTING previous year. The Midwest Cattleman · August 10, 2023 · P24
continued from page 9 “I suspect that the ongoing
drought is masking continued though declining. Heifer increases for beef will lead to
But the El Niño impact is liquidation in some areas up to slaughter through May was more substitution.
likely negligible until late this this point,” says Derrell Peel, fractionally higher year-over- “When prices for meats get
year. Oklahoma State University year on top of the large heifer far enough apart, we will see
“In the past we assumed livestock economist. “While slaughter last year. restaurants adjusting their
producers would respond with signs are encouraging that the “Heifer slaughter in 2022 menus to feature lower priced
expansion,” says Scott Brown, drought will continue to fade was 30.6% of total cattle products,” Brown says. “When
University of Missouri live- through the year, more beef slaughter, the highest propor- they do, it’s often hard for
stock economist. cowherd liquidation is likely tion since 2005,” Peel says. them to switch back, and that
“That may happen, but in 2023.” “Heifer slaughter is expected could be problematic for beef.”
drought has expansion sty- USDA’s Jan. 1, cattle inven- to decrease through the year Regarding wholesale beef
mied for now.” tory put supplies of bred heif- but, like beef cow slaughter, at prices, Brown says they
As of May, cow slaughter ers at 5.16 million head, down a relatively slow rate. Heifer reached their highest June
was down about 11% from the 6% to the lowest inventory retention likely will begin in price level on record last
previous year, not enough of since 2011. earnest this fall and heifers to month, excluding the 2020
a decrease to ensure the end “The low bred heifer in- be bred in 2024.” COVID-19-influenced market.
of liquidation. In 2014, for ventory combined with the DEMAND REMAINS KEY “I don’t know where the top
instance, beef cow slaughter relatively slow reduction in While producers fret over is, but we’re not done. It’s only
dropped over 18% from the beef cow slaughter makes ad- rain and forage supplies, re- going to get tighter,” he says.
ditional beef cow liqui- tailers and food services worry USDA’s forecast for beef
dation this year proba- about inflation. Beef has been calls for a 2-billion-pound de-
bly unavoidable,” Peel a main attraction but rising cline, which is “territory we’ve
says. “In other words, if prices and a widening spread never seen in terms of consec-
drought conditions con- between beef and both pork utive years with significant
tinue to improve, 2024 and chicken are concerning. decline.” Brown says.
will probably be the low For instance, Brown says con- While much uncertainty
point of the herd simi- sumer demand could become a remains over when and if ex-
larly to 2014, albeit at significant concern if smaller pansion will begin, it appears
even lower beef cow in- beef supplies remain an issue likely that the overall indus-
ventories.” for too long. While he sees less try will be smaller.
Additionally, the in- substitution by consumers for Drovers
ventory of heifers in meats today than 20 years ago,
feedlots remains high, he’s concerned continued price