Drought has reduced beef-cattle numbers and increased hay prices, according to a preliminary economic impact report released Aug. 24 by the University of Arkansas System Division of Agriculture.
Here’s a synopsis of the state’s forage situation: “The drought’s obliteration of Arkansas’ pasture and hay meadows, coupled with the rising price of corn and hay, forced many ranchers to sell their stock and in some cases, liquidate whole herds, continuing a trend of declining cattle inventory stretching back to 2009.”
All-cattle-and-calf inventory was the lowest in 40 years: 1.67 million in the state, with a 13% drop since 2009. In comparison, hay prices increased 34% since 2009, from a $74.50/ton average to $99.50, according to the report.
“Some farmers are choosing to sell calves early or otherwise trimming the size of their cow herds, which has led to some reductions in cattle prices,” said one of the report authors, Nathan Kemper, Trade Adjustment Assistance program coordinator for the Southern Risk Management Education Center.
While fed-cattle prices have declined more than 15% since May, “the outlook for beef cattle prices is positive given the current supply and demand. With the U.S. herd at its smallest size since the 1950s, high prices could be in store for cattle over the next two to three years,” he adds.